[Investing in NFTs] What problems are NFTs solving? Who is NFT suitable for? Six reasons to consider investing in NFTs

foreword

Recently, even friends who are not very familiar with cryptocurrencies are talking about whether he can get rich overnight by taking a picture every day through NFT, and there are also many friends who are not involved in cryptocurrencies themselves who are interested in NFT, which makes the author think through The reason why NFT can cause a boom, whether it is the right time to participate, etc.

Definition of NFT

The full name of NFT is Non-Fungible Token, "non-fungible token". Contrary to the concept of homogenized tokens (such as bitcoin/fiat currency), each NFT has a code, which is irreplaceable and irreplaceable. Divided, unique features.

The point is non-homogenization .

NFT concept example

For example, you and I both have HK$100, which is homogeneous. But if you have Mirror's signature on your HK$100, it is no longer homogeneous. This is a concept similar to NFT. The 100 Hong Kong dollars signed by Mirror is unique and unique. Even if there is a second Mirror signature, it cannot be the same.

Practical example of NFT

Take Huang Mingzhi's glass heart song as an example, which is limited to 100 pieces. Yes, you can hear a song on Youtube (own), but the following people are the ones who actually own (own) the metadata of the song.

And the song is divided into 100 parts, so each song is non-homogeneous , and each song has a code.

What is the purpose of NFTs?

• Proof Of Original Work or Copy of Work
• Ownership Right
• Ownership of a metadata file

The reason for the craze for NFTs?

NFTs are indeed easier to understand than cryptocurrencies because they are visible. Usually visible avatars, such as Mirror Ian's head of a horse, Huang Mingzhi's glass heart, etc. Another example is the Logo of Adidas, etc. in the Metaverse, etc.

Cryptocurrencies have never been widely used for payments, which are relatively intangible and invisible. Therefore, it is relatively easy to understand and get started for those who are not familiar with the cryptocurrency market.

https://opensea.io/assets?search[query]=Fragile

There is a reason for the boom, coupled with the Mingren effect and the media chase.

Mingren effect: For example, Shawn Yue buys and sells NFTs, and Jay Chou sells NFTs.

The media reported who got rich overnight through NFTs, etc.

For example, a boy in Indonesia.

In addition, when people on Social Media have changed to NFT avatars, sometimes it may be FOMO, Fear of missing off, people want to have one of their own.

What problem are NFTs solving?

The problem that NFTs solve is to provide authentication for content. In simple terms, the establishment of copyright through the blockchain proves that it is issued by an institution/group and that the content is unique.

Who is NFT suitable for?

Depends if you are the seller or the buyer.

seller

Suitable for those who own the copyright (picture/song)

Suitable for educational institutions

For content creators

Suitable for people who have a community

Suitable for game makers

suitable for fundraisers

buyer

• For those who want to support creators
• It is suitable for those who want to prove that they are participating in the currency circle and metaverse projects through this
• Suitable for those who want to participate in the DAO group through this NFT
• It is suitable for people who want to meet fellow travelers through this (Special Identity, such as yacht club/Golf Club need to pay membership fee to enter the Club to meet people)
• For those who want to participate in GameFi PlaytoEarn
• For those who want to have a domain in the cryptocurrency world (ENS)
• Suitable for those who want to invest together

What factors should be considered to buy or not to buy NFT?

Generally, NFTs will say how many are only issued, such as 900. Because it is rare, it makes people want it.

If the support angle does not consider investment, just like it.

6 major factors

First-hand or second-hand market?

The investment angle needs to be distinguished first

Primary market:

Generally, the official website will have a Presale link, which is equal to the IPO/ICO price, which is usually the cheapest, abbreviated as Mint.

In addition, the publisher will have a Whitelist for some early Mint supporters.

There is also the Public Sale Price, which will be higher than the Mint Price.

For some highly competitive projects, robots are basically grabbing, not people.

second-hand market:

Usually, the buyer gets it at Mint Price in the first-hand market and then puts it in the second-hand market, so the price is generally higher.

As for whether there is investment value (pictures/GameFi pictures, etc.), after my research, I believe that the following fundamentals need to be considered:

Background of the project

• Project issuer
• Long-term development of the project (Product Road Map)
• Item Marketing Means: This will affect the popularity of the second-hand market.
• For example, is there celebrity/KOL support
• Are there activities such as Giveaway to let more people know, etc.

Who is the audience?

• What is the main market? Hongkong? Asia? Or global? Affect the number of buyers

Image rarity and general familiarity?

• image rarity (very important)
• Wide familiarity of images
• For example, Keroro, many people are familiar with, and naturally some people buy it because they want Keroro.

Is there a community and what is the consensus of the community?

• Community's Stickiness (Those who want to let go after buying/loyal supporters)

Can I participate in community activities?

• What will happen after the purchase? (There will be some online/physical events/Metaverse events to meet)
• Who are the main participants?
• Is there any place I can be privileged after participating?

Example: Whoisthisboy Project Analysis

Take one of the recent projects, Whoisthisboy , for example.

I have doubts about whether it is Scam, because it has less background to check, and Social Media such as Twitter was only established in January. Later, I learned from the report that it is a project under the artist Lin Shengbin Bob , and Bob and other stars have publicity on IG, which is more credible.

First-hand or second-hand market?

Whoisthisboy only has 999.

Whoisthisboy has 2 rounds of Presale, one on January 25th and the other on January 26th. The Presale Price is 0.05ETH, while the Public Sale is January 31st, starting at 0.1ETH.

Background of the project

Projects owned by Bob

Product Road Map:

Basically, the homepage has a timetable. For example, there will be the next NFT project in May, but the specific content is not very specific, but it is written that there will be developments related to DAO and METAVERSE, etc.

Project marketing tools:

• Through Giveaway, users are forwarded and shared, and users can then tag 3 friends, fission marketing.
• In addition, the celebrity effect is added, and celebrities are invited to hold it, which arouses the hearts of the masses who want one. For example, Lin Zuo and Fang Lishen both hold it.
• From the Presale to the completion of the Aftersale, there is a continuous sharing of Posts to indicate the progress (such as when is the Presale, and all 120 Presale are completed within 8 minutes, etc.)
• There are Discord, Telegram, Twitter to keep the project updated and interact with the community

Who is the audience?

At present, there are more Hong Kong people.

Image rarity and general familiarity?

• Image rarity: requires more data to analyze
• Wide familiarity of images
• There are avatars of the keroro Gunsao series, squid games, etc.

Is there a community and what is the consensus of the community?

For the time being, some people have joined Discord one after another, but there is not much interaction, and I don't know what the consensus and common values are.

Can I participate in community activities?

Can. But the specific activities are yet to be confirmed.

It is worth noting that

• NFT authenticity

The threshold for NFT is relatively low, everyone can Mint with pictures, and pay attention to prevent fake goods.

For example, Jay Chou's NFT has been imitated by multiple Accounts. Pay attention to whether the account has a Get verified pattern.

• NFT liquidity is currently relatively low

In addition, the liquidity of NFTs is lower than that of cryptocurrencies, so it is really best to only invest the amount you can lose, and choose projects with relatively large trading volume (there are tools to track, which will be explained in another article). Although Fragmentation is emerging now, Pooling can be done, but only for popular projects.

• NFT fake link

It is easy to find fake links in Google Search, remember to go to the official Account and then link to reduce this risk

When is it worth buying NFTs?

Assuming that the NFT price remains unchanged, in fact, when the currency price falls, it is one of the good times. Because the purchase price and Gas Fee are relatively cheaper than before. (Written on January 26, 2022, the current currency circle is much cheaper than a few months ago)

Did I participate in NFTs?

I have research but I haven't bought it yet, because I think it's better to choose a tool that I'm more familiar with.

But I have Mint my NFT, and if there is a suitable community Pass, I think I will participate.

In addition, when NFT develops to a more mature stage, I will measure the value at that time.

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