What is needed to get started with NFTs? I sat down and asked Hosts Sabretooth and Kizu to try and answer some questions that had been lingering in my mind. Here are the highlights:
Should I use a rarity ranking website in order to determine NFT value?
RaritySniper is a site that provides rankings of the individual NFTs within a 10k generative project. It is also valuable to note that projects have to pay to be listed on the site. Sabretooth says that, if you need to use these sites to understand the value of your NFT, then you probably don’t know enough to invest in that project. Kizu finds that these sites can be useful for an objective comparison.
Better than using sites like RaritySniper, the best way to gather information (besides listening to this podcast) is to check the wallets of established collectors, or those who have invested in blue-chip projects. By seeing what else they’ve invested in you can get a good idea of successful patterns and transactions.
What is the difference between NFT marketplaces?
It is helpful to break down NFT marketplaces in to categories of primary and secondary sale. Primary examples would be; SuperRare, NiftyGateway, Foundation, async.art, NewWorld, etc. In these cases the artist is minting a particular work and you buy directly from them via listing or auction. Secondary sale sites include; OpenSea, Rarible, Zora, and you would buy from collectors.
These previously mentioned pertain to Ethereum. Hic et Nunc is different, it is on Tezos. Every blockchain (Solana, Terra, Dfinity) has an NFT ecosystem and thus its own marketplace. Most NFTs are on Ethereum but Tezos and Solana would be the next up.
For a more curated experience it is nice to check out some of the NFT gallery spaces such as FeralFile.
Can I get hacked by connecting my Metamask wallet to a website?
The word wallet often leads to confusion regarding security and safe-keeping. The reason being is that people hear the word wallet and feel that it is something that holds your assets, something that needs to be protected.
Despite this, the wallet itself carries very little security threats. There may be privacy risks in syncing your wallet but there are no cryptographic risks. Your NFT is not held in your wallet, it is held on the blockchain. The wallet is really better understood as a way to interact.
The element in the equation that deserves more attention is the seed phrase. This is how you prove that you own what you do. Moreover, if you loose or leak your seed phrase there is no way of recovering it.
How do you protect your seed phrase?
One thing you can do to protect your seed phrase is get a hardware wallet.This has a benefit as opposed to a hot wallet (such as MetaMask) because the information is generated on your computer and harder to crack. Examples of hardware wallets would be Ledger & Trezor.
The question then moves to, how to store your seed phrase. The first level is a password manager. Once you have more capital, then you move to breaking up your seed phrase into different parts.
Why is the difference between Binance Smart Chain and Ethereum?
Binance Smart Chain is an EVM (Ethereum Virtual Machine). Similar to producing PCs that were compatible with IBM but could be made cheaper, we have EVMs so as to produce more affordable options for Ethereum transactions. Binance Smart Chain is just the most popular one currently.
Why is everyone talking about
Big companies struck a Faustian bargain harvesting your data and 3.0 is about overturning that trend. In the case of NFTs, the idea is that direct buying happens between creators and collectors so that artists get more money.
Sabertooth finds that web 3.0 and DAOs are the biggest terms getting thrown around right now. DAOs are simply co-ops and there are the obvious problems of bureaucracy. Sabertooth thinks they’re kind of overrated.
What are smart contracts?
Smart contracts are an autonomous running software on a blockchain. It is autonomous because it is running on the blockchain and unlike software on an AWS server, it can’t be shut down.
A NFT is a smart contract, namely ERC 721 (if dealing with Ethereum). You can also find ERC 1155 which is newer, but still less popular.