If you are a complete newcomer to collecting NFT’s but want to learn more about how to start collecting them then read on. One thing to note, as per our site name, this guide will be focused on NFT’s on the Cardano blockchain (CNFT’s).
We are going to go ahead and assume that you know how to buy cryptocurrency, specifically in this case ADA.
That being the case the first thing you need to do is make sure your ADA is in a wallet and not sat in an exchange like Coinbase or Binance.
If you try to buy CNFT’s from an exchange you’re going to have a bad time, you’ll likely lose your ADA and lose the NFT forever.
So what wallet?
There are a few to choose from depending on whether you will be mostly buying/selling from your phone or computer. The choices are:
OK, before we get into it here are two key points, in bold. If you take nothing else away from this post please remember these:
Never invest more than you can afford to lose!
Always do your own research before investing your money into anything!
Always double check the wallet address you are sending to before hitting send. If you’re copy/pasting sometimes things can go wrong so it always pays to double check.
What NFT Should I Buy?
This is a very important step so I want you to read the next section carefully and then come back and read it again.
The most important thing is to Do Your Own Research.
Don’t buy into a project because someone on Twitter or Discord told you it’s the next big thing. It may be that it is the next big thing but you can’t take that risk with your ADA, put the time in and research the project on your own terms.
Don’t just read through our CNFT drop calendar and jump into every project on there. Do some research if a project takes your fancy and make your own decisions on whether it is right for you or not.
A listing in our calendar doesn’t mean we endorse the project, it doesn’t necessarily mean we will be buying into the project, it’s there to show a drop date, mint cost and brief description of the project. DYOR
All of the above said, I have personally bought into projects with very little research purely down to FOMO (Fear of Missing Out) and on most occasions I have come to regret buying in.
How do I research an NFT?
So how do you know if an NFT project is worth buying into?
There is no sure fire way of guaranteeing that the project you are looking at is going to be worth buying into but there are steps you can take to limit your risk.
The first way, as sure fire as you are going to get, is to buy into an established project like Spacebudz, Clay Mates or Unsigs. You will need a decent supply of ADA to do that though.
First things first you need to be honest with yourself about the reasons behind buying the NFT, are you looking to buy into something that you intend to hold long term or are looking for a quick flip to make some money?
If it’s the latter then i’m afraid risk comes with the territory, flipping is a numbers game and you’re gambling on landing rare NFT’s in decent projects and hoping these outweigh the rug pulls and projects that sink.
If it’s the former then obviously the art itself needs to speak to you, it needs to be something you enjoy owning and looking at or the community around the project needs to be something you want to be a part of.
Here are a few potential red flags to look out for.
The project has been on the scene (Twitter, Discord) a week or two and is already minting. This smacks of a quick cash grab, not always the case but be wary.
1. They’re very aggressive at building their Twitter and/or Discord followings, usually with giveaways. Giveaways are not always a bad sign and growing a community is never a bad thing but it can be a sign of a project attempting to build a hype train for a very quick sale. This inevitably is followed by a flood of NFT’s on the secondary market as people with no interest in the project attempt a quick flip, leaving those who were interested holding bags of unwanted NFT’s.
2. Is there a plan or a roadmap for the project? Now, not every NFT project needs a detailed roadmap, sometimes it’s just about the art (like DeepVision). If the project is a 10k drop of PFP style NFT’s then really you want to know there is some sort of plan for after the mint. This doesn’t mean every project has to promise a game, because lets face it 99% of those games aren’t coming, but what is the plan down the road?
3. How open and visible are the team behind the project? Do a little digging on Twitter, Discord, their website etc. and see how visible the team are, what are their backgrounds, what are their plans for the project etc. If there is no interaction with the team anywhere it would worry me.
4. What about the community surrounding the project? Join the discord server and observe the conversations, a project with a solid community will be quickly apparent. If the discussions mainly centre around what the project can be flipped for after it mints i’d be a little concerned.
5. The art itself. Do you like it? If not, why buy it (unless you’re looking for a quick flip)? Not everything has to be unique but if something is clearly a quick copy/paste job it’s unlikely to retain much value. Look for art that clearly shows that love and effort has gone into the project.
My new approach to projects is that if the artwork itself looks easy to make or cheap to outsource the riskier the project is to me. Conversely if a project looks like it has taken a lot of time, money and effort to produce the chances of a quick cash grab and rug pull diminish. The risk never completely goes away though!
Buying Your NFT
There are 2 main times you can buy an NFT.
You either mint the NFT when it is launched (or at pre-sale) or,
You pick one up on the secondary market.
Let’s start with the first option, minting. There are numerous different ways a project will mint but most of them will involve disclosing a wallet address and a specific ADA amount to send. I won’t go into the intricacies of minting as this will vary from project to project, a good project will have a detailed description of the minting process on their website and/or Discord.
Scammer Alert. Be very careful about where you are copying a wallet address from. If the project says they will announce the address on their discord make sure you only copy it from someone associated with the project, usually a server admin and usually on a locked channel so nobody else can post there. Scammers will target Discord users and drop fake addresses into Discord chats or DM’s.
Minting can be a very exciting process, some might even go so far as calling it addictive. With the secondary market you choose the exact NFT you want to buy, with minting it is random. You send your ADA in and wait to see what you get. You might strike it lucky and land an ultra rare NFT, more likely you won’t but the anticipation as you wait for it to arrive is exciting I won’t lie.
Now the stressful side of minting is you may miss out completely. If the project is popular, like Yummi Universe for example, you will probably find that there are so many transactions being attempted that wallets will crash, the Blockchain will slow to a crawl and you’ll be left wondering if your transaction went through. If it didn’t go through in time before the project sold out you will get your ADA back eventually (minus a transaction fee). Scant consolation at times, i’d much rather have received my Yummi than a refund but that’s the life.
Buying a CNFT on the secondary market
Now, if you missed out on the mint you can always look to buy on the secondary.
The good news is there is usually a good number of CNFT’s listed after mint as flippers look to sell quickly. Most of the time it will cost you a little more than mint cost but you may get lucky and find someone selling under mint price (no idea why people do that but they do!).
When buying on the secondary market you need to tread a little carefully. Scammers will try to relieve you of your precious ADA by minting copies and listing them for sale.
Always check that the policy ID of the NFT you are buying matches the policy ID of the project, this is the safest way.
So where can you buy?
There are a number of marketplaces available, check out the page here that lists CNFT Marketplaces.
You can also purchase a CNFT through an escrow service whereby you send your ADA to a 3rd party, the seller sends the NFT to the same 3rd party who then completes the exchange after checking everything is in order. Obviously for a fee. You need to be very careful that the escrow you are using is legit. If a seller DM’s you to sell something and suggests using a specific escrow you may very well be about to get scammed.
I personally stick to marketplaces for my trades.
Where can I see my CNFT?
Ok, so you managed to mint or buy a CNFT, you can see the transaction in your wallet but how do you view your NFT?
The best way to do this is head over to pool.pm, hit the search icon and paste your wallet address into the search field.
This will open up your wallet in the browser and you will be able to view all of your NFT’s.
That should be enough to get you started on the journey to CNFT addiction 🙂
If you take your time, do your research and treat every interaction with a healthy amount of scepticism you’ll do just fine. As you get deeper into NFT’s you’ll find people you can trust, communities worth being a part of and projects worth your ADA.
2 thoughts on “Getting Started with Collecting NFT’s”
What a wonderful article to read!! This will definitely help newcomers to understand what they are getting themselves into! Thank you for writing such a spectacular article!!
Thank you so much for this. Im dying to get into NFTs so i can grab a Good Charlotte and Clay collab. This helps massively.