How to get access to NFT drops
31st August 2021 |
It’s pretty much all anyone can talk, think, tweet about in crypto.
If you’re not neck deep in NFTs (non-fungible tokens) at this point, then I shall ask…
Do you even crypto?
Jokes aside, you can’t help but sit back in awe as the NFT market grabs everyone by the [insert relevant body part here] and takes us all for a ride.
Frankly I didn’t see the market surging in the way that it is currently. Having known about, owned (never sold I might add) NFTs for years now, the hype around this crypto sector now is palpable.
It’s also attracting a lot of attention, both good and bad.
I believe it’s also going to make some people stupidly wealthy, and many lose money.
But of course, it is absolutely something you need to know more about, understand and if you so choose, get involved in.
So here’s how…
NFTs for beginners
What is an NFT?
The first thing to know is an NFT is a unique piece of data. It’s represented often then by some kind of asset attached to that data.
Take, for example, a piece of art – which is the most common representation of an NFT at the moment.
If you were to take a photograph of your family, and mint it as an NFT, then forever (on whichever blockchain you use) that data (the photo of your family) will exist as that NFT. You can store it, send it, sell it even.
Either way, while the photo may be copied, the underlying data will show that any copy is not the original. The data itself proves the uniqueness of the NFT itself.
This makes NFTs excellent when it does come to art, unique piece, one-of-a-kinds, as they can be produced with rarity and the provenance can forever be tracked.
And at the moment, there’s an explosion of art being minted as NFTs.
In addition to that, there’s also an explosion of gaming assets being minted as NFTs. That is because, in online gaming, there’s also huge potential for NFT value.
Take a look for instance at the new online digital card game, Parallel.
The most expensive cards in the world?
When I was a kid, at school the “in” game to play was Magic: The Gathering. It was a card-based fantasy game. Particular cards would hold certain powers, features and functions when used in a game.
Magic is still a huge game, and I expect that it will also make quite a dent on the NFT world. But the one that’s hit the market in a big way is Parallel.
It is a similar concept in that it’s a card-based game, but here each card is an NFT. They are digital collectible cards based around the story of the game (which I won’t go into because it’s a lot to cover).
The artwork on the cards is glorious – and the cards and the card pack are in hot demand. In fact, if you go to the Parallel Alpha marketplace on Opensea you will find that some Parallel cards have sold for more than 100 ETH ($317,000). One card last sold for 360 ETH (over $1.1 million).
This is how wild the NFT market can get.
It’s why people are flocking like crazy to get “drops” of new NFT packs from games and projects like Parallel.
However, because the demand is so hot, the question is, how do you get to the drop? How do you find out when a new NFT project is launching? How can you get your hands on some of these NFTs?
Looking for Frens
To give you some idea of the weirdness and wildness of an NFT drop, here’s some personal experience.
I follow a few accounts on Twitter that led me to a new NFT drop, “Non-Fungible Frens”.
This would be a collection of “Frens” which took the Pepe the Frog meme and made a unique set of randomly generated images, minted as NFTs, each with certain elements that added to their rarity.
Yes, it is as weird as it sounds.
Anyway, I was there for the first drop of these NFTs. Ready with 0.5 ETH to cover the cost of minting and the transaction fee on the Ethereum blockchain. That would have let me mint two Frens. Note also that I was prepared to pay as much as $500 in transaction fees to do it.
The very second the drop launched I activated the minting and transaction, and then waited.
And waited…
And waited for my transaction to process.
It failed.
My transaction was dropped because I hadn’t paid enough gas fees to compete with everyone else trying to mint some Frens.
When I looked through the transaction record of those who did manage to mint some Frens, it blew me away.
Some transactions were spending as much as 1.5-2ETH in transaction fees. Yes, that’s over $6,000 in transaction fees, plus the cost to mint (which was around 0.03 ETH I think).
That is too expensive for me. But this is how many of these drops happen on Ethereum. There’s a “gas war” that you have to be ready for. And then you’re no certainty of even being able to then flip or sell the NFT afterwards.
Make sure they look nice
Remember that every NFT is unique: if there are many unique NFTs of a collection, then you’re actually in a very illiquid market.
And that’s the trap with NFTs people fall into. It’s one thing to buy an NFT on a drop.
It’s another thing to actually sell it. Not only that, when listing an NFT you can put it up for whatever price you like. You can list your NFT for 1,000 ETH, but that doesn’t mean you’ll ever find a buyer for it.
The truth is unless you’re given early access by some of these NFT communities, most of the time you’ll get dumped on and left with an illiquid asset you’ve overpaid for, if you’re buying on the secondary market.
The trick is to stay rational and reasonable with it.
Follow a load of different NFT artists and accounts on Twitter. See what they’re doing, what they’re buying and taking part in.
Try to get in on a drop yourself. But be prepared to pay a lot in transaction fees. As for the secondary market, I’d stay away from that altogether.
And then of course, Ethereum isn’t the only blockchain with NFTs.
Tezos has a fast growing, thriving NFT scene, where prices and access to new drops aren’t crazy (yet) and the Hicetnunc and Kalamint markets are full of great, interesting artwork that you just might like anyway.
Solana is also starting to get more into NFTs with some hype around drops there like the Degenerate Ape Academy.
The point is, Ethereum isn’t the only place to get into NFTs to experiment and try and see how this market works.
The truth is that it’s very unlikely that you’ll get near an early drop for a “millionaire maker” NFT project. I’ve been trying for months, and still can’t get near them. If you do, good luck to you… I hope it works out.
But most people in NFTs are going to be left with illiquid, untradeable NFTs.
So I’d suggest if you do start to get your “NFT game” on, make sure it’s one you like to look at or may even display. Good chance you’ll get to look at them for a very long time!
Crypto to Know
Below is our “Crypto to Know” list where you’ll find several cryptos that we think you should be taking the time to learn and understand.
They each form an important part of the burgeoning crypto ecosystem.
Several of these cryptos are doing very different things to others.
What’s key is to learn that every crypto has its own use cases, its own guiding principles and its own particular potential.
Each crypto is to be judged and assessed on its own merits.
Our aim here is to help you understand these cryptos and the wider crypto world.
These aren’t specific recommendations but a guide to help you learn and build your confidence in operating in this space.
We will add more names to this list over time. However, if you’re new to the world of crypto, these are the names where we think you should start your education and learning.
We’ve also added links to each one.
The links are to what we believe, in each case, is the best resource for learning about that crypto.
“Crypto to Know” watchlist
- Bitcoin – bitcoin.it/wiki/Main_Page
- Ethereum – ethereum.org/en/what-is-ethereum
- IOTA – docs.iota.org
- Tezos – https://tezos.com/learn/getting-started
- Uniswap & 1inch – uniswap.org/faq & help.1inch.exchange/en
- Filecoin – docs.filecoin.io
- Cosmos – v1.cosmos.network/intro
- Binance – binance.com/en/about & research.binance.com/en/projects/bnb
- FTX – ftx.com & help.ftx.com/hc/en-us
Sam Volkering
Editor, Sam Volkering’s Crypto Network
