Getting into NFT's or exploring them was one of my New Year's Resolutions and has been a whirlwind of experience. I didn't know where to begin but figured it out as the year went on. I've compiled my experiences and am sharing a quick start guide to help get you set up in a day or two rather than the weeks it took me.
I. Get a Wallet
First, to get started with NFT's and crypto in general you will need to have a wallet. The one I both recommend and use is the MetaMask wallet (MM). MM is an Ethereum Browser and Ether wallet that allows you to interact with smart contracts. Smart contracts are the central mechanism that distinguishes the Ethereum blockchain from the Bitcoin blockchain because it allows for the ability to build Decentralized apps (DApps).
DApps are basically decentralized web applications like YouTube, FaceBook, Google, Twitter, and others that are centralized.
DApps are fundamentally different from non DApps because every interaction with the Ethereum Blockchain requires Ether (you to pay). Now, that we sort of understand why MM is needed let's go ahead and install it.
How to set up a MetaMask Wallet
1.) Enable it in your browsers extensions after downloading it
2.) Click the 'MetaMask' icon in the extensions section of the browser
3.) Select create new wallet
4.) Write down the passphrase that is generated (should be 12 or 24 phrases)
- Write it on a piece of paper and put it in your safe
- Write it in a digital file and encrypt it so it is not viewable in plaintext
5.) Write down the password if provided one or generate a new one
Lastly, make sure to download the MetaMask mobile wallet so that you can purchase NFT's while on the go– trust me artists drop things at all times of the day.
II. Use a Crypto Exchange to Purchase Ether
1.) Create an account
2.) Buy Ether
Purchase, an amount of Ether that you're comfortable through the exchange and then you'll be able to send it directly to your MetaMask wallet. Some exchanges will not let you send more than a certain amount on same day purchase. As of writing for Coinbase the limit is 500 USD. Meaning, if you buy 550 USD you can only send 500 USD, right away. The other 50 USD can be sent the next day.
III. Send Coin to MetaMask
Now, that you own some Ether navigate to the Send Ether option in on Coinbase or Gemini and press send Ether.
It will ask you for an address.
Open your MM wallet and copy your address– it should be right below your Profile Pic.
Once, copied paste your wallet address into the receiver field and in the sender field select the amount of Ether you want to send.
It will cost you gwei or gas to send the Ether so for example if you want to send 500 USD, maybe 10 to 30 USD will go towards gas.
MUST DO: Send a test amount of Ether first like 0.001 Ether to verify that the send function works and that the wallet is set up correctly.
Tip I recommend adding the Ether Gas now extension to your browser so that you can see when the cheapest time of the day is to send gas.
Ethereum is a decentralized computer that you can interact with through smart contracts. Because it is a computer your interactions are consuming compute. So to consume compute you pay gas. The gas goes to miners.
Miners are other people's computers that have been set up as nodes to process your interactions with the blockchain. Hence, gas is their reward for offering up their hardware.
Otherwise they wouldn't lend you their compute power.
IV. Use a Marketplace to buy NFT's
There are plenty of places to buy NFT's, but my favorite one, and currently the most popular one is OpenSea.io.
Whenever, you click the link you should be taken to the homepage. On it you can search for projects to buy or bid for.
Here's an example project that you can find items to buy or bid on; Official MoonCats - Acclimated.
When you go to bid or buy, then you'll notice MM wallet asking you to connect. Say 'yes'. This is necessary so that you can send Ether to pay for the item. If you wanna see what NFT's I have then check out my OS Profile.
How do I know what NFT's to buy?
I have purchased a few successful NFT's in the past months and have developed a rough set of questions to help decide whether or not to buy in:
Q1.) Does the project have a website?
A project that is serious should at the bare minimum have a website detailing the goals of the project and why you should consider buying.
Here are two examples of projects with websites;
Notice, that they go in detail in explaining what it is they're doing and how it is being done.
Q2.) Does the project have a public Discord?
Any serious project should also have a discord (often linked on their website or social). Most, are open for all to join, so I recommend joining the Discord and getting a read of the Community.
Q3.) Does it have a community?
After joining the Discord check to see who's doing the talking and who has the power (moderators). If it is only the Project creators with power and doing the talking and the project isn't brand new then that is a red flag. Something, else to look for is how does the Discord Admins handle people voicing reasonable objections. If they typically utilize Bans then it is also a red Flag.
- Additionally, how are purchasers of the NFT on Twitter or other Social media places?
- If the accounts seem like bots then it's also a red flag
Q4.) Do the creators care about the community and its wants?
This is my biggest red flag. If the creators do not listen to the community and do not interact with it then chances are they are only there for the money.
And if they're only there for the money then the project is probably not going to last through the initial hype (if there's any).
Q5.) Is it novel?
Is the project doing something that hasn't been done before like 3D pieces that move around in Decentraland? Or is it a subject that hasn't been done before. For example one of the most successful projects to date is CryptoPunks, but that doesn't mean a spin-off project CryptoSkaPunks is worth purchasing.
Why is that in my Wallet?
*not financial advice
They allowed you to mint the art yourself on their website. Meaning you connected to the site with MM, payed your Ether, and got your Art.
I consider this to be one of my biggest buy signals because it means the creators are invested enough to figure out how to create smart contracts and spend the time to do so.
Also, they were not overtly expensive like other projects. I like projects that aren't overly expensive because that means it is not just a cash grab. Be wary of new projects that start out with high prices ( greater than 1-2 Ether per piece).
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