Why Invest In NFTs + The Basic Method

Why Invest In NFTs?

We probably should have mentioned this earlier. But I decided, better late than never.

Ok, so….NFTs (non-fungible tokens) are digital assets that are unique and cannot be replaced or exchanged for other assets on a one-to-one basis. They are often used to represent ownership of digital items such as art, music, videos, and other types of media.

Ok so what does that mean?”

Well…every time I talk about NFTs to a person who doesn’t fully understand crypto, they say things like:

“I don’t get it. Couldn’t someone just screenshot your NFT and they would have the same image? Wouldn’t the copied image have the same value as your NFT?”

Let’s start with the first question. Sure. Anyone could screenshot, take a picture or right-click and ‘save image as’ on your NFT.

But they wouldn’t own it.

It would be like if you posted an image of your car online with the caption that read: “This is my car”.

Someone could (in theory) copy that image and even post it online with the same caption (“This is my car”) . However, only YOU have the title that ties you to the real ownership of that car. Only YOU have the physical keys to the car that allows you to drive it.

Well, it works the same way with NFTs. With your NFTs, there is a type of key that you own. There are also official records that certifiably ties you to the ownership of that NFT.

Here’s something else to keep in mind.

A car can go up in value. An NFT can go up in value.
A car can go down in value. An NFT can go down in value.

If you are interested in investing in NFTs, here are a few things to consider:

1. Understand the risks: NFTs are a relatively new and untested asset class, and they come with their own set of risks. It is important to understand these risks and be prepared for the possibility of significant price fluctuations.

2. It is also a good idea to consult with a financial advisor or professional before making any investment decisions.

3. Research the market: It is important to familiarize yourself with the NFT market and understand the trends and factors that can impact the value of NFTs.

i. Go to websites like opensea.io, magiceden.io and other sites that show the value of NFT collections.
ii. Study the NFTs that go up in value. Look for patterns. Study the NFTs that go down. Look for patterns.
iii. Based on those patterns, you can make assumptions and then test those assumptions on a small scale.

You could even pretend that you’ve purchased and NFT and then watch it on an ongoing basis to see how the value changes.

What you’re looking for are assumptions that are so strong, they work at least 7 out of 10 times. At least, that’s the approach I take.

In conclusion, investing in NFTs can be a viable option for a side income, but it is important to understand the risks and to approach it with caution.

Careful research is the key to minimizing the risks and maximizing the potential rewards with NFTs.