I Bought This Image For $1,500 (and I sold it for +50% in two weeks) Using NFTs

If a year ago someone told me that they bought an image, a simple file that is trivial to download for $1,500, I would think that they are idiots. But as it happens with all new opportunities, the line between idiots and informed investors is blurred.

In January 2021 I decided to dance on that line.

Blockchain

I've been a huge supporter of blockchain technology mostly because I am a huge geek. Surprisingly this worked really well for me at a time where Ethereum was $8 - $12 (now it is $1,500 - $2,000). I kept following very closely all the new trends and trying to figure out what is "the next big thing". 

If you are following the crypto space (Ethereum, Bitcoin, Doge, etc) you know that every week there is a new "next big thing". Finding whether this is an unstoppable Tsunami or not is how fortunes are made... or lost. 

The only real metric that works is: 

"Do people use it RIGHT now?"

I don't care if it is great on paper, if the price is high, or if Elon Musk is pushing it. Do people actually use it? Is there a community around it building software and new tools? Is there a future?

NFT: Non-fungible tokens

NFTs are the newest hype. Millions of dollars in transactions and to tell you the truth, I love how they disrupted the art gallery space. Anyone can buy and sell art while sitting at home, drinking kombucha, and watching Netflix. 

The easiest way to get what NFTs are is to understand that they represent ownership. An NFT is used mostly for digital items but there are tons of other use cases that I'll explore in another post. Let's see an example:

I am an artist and I digitize my work (I take a photo) and I upload it to one of the current trading platforms for NFTs (like Opensea or Rarible). The process of converting my art to NFT is called minting. During that extremely simple process, I can also add some properties to my NFT (we call them metadata). 

For example, this is an NFT that just got sold $215k as I was writing this post.

It has some properties (Accessories and Type) and it is unique, meaning that whoever bought this, is the unique owner of this image.

Wait? Why is it unique? I can download it for free

This is the argument that I keep hearing about NFTs. Why would I buy it if I can get it for free? 

It all comes down to perceived value.

There are literally thousands of copies of the Mona Lisa. But only the original one can capture all the value. NFTs are on the blockchain so you can always know whether this is the original or not. 

But I cannot have it on my wall and enjoy it!

I don't have my Tesla stocks on the wall. And (sadly) the vast amount of expensive art is locked up inside vaults and sometimes even at the museums you don't see the original. 

Art can be enjoyed and also be traded for money. You can have a piece of art that is not enjoyable but worth millions of dollars and art that is a masterpiece but worth less than a Dogecoin ($0.005). 

NFTs create new, efficient, and fast marketplaces for anyone to upload their art, purchase, speculate, and invest in it. 

How big is the NFT space right now?

I've been buying and selling since 2018 (the Cryptokitties days) but now it is out of control. We are talking about buying something for $50 and selling it for $30k in less than a month. The NBA started their own NFTs, celebrities are printing money and more and more and more companies jump into the game. 

On top of that, a myriad of companies are building tools and making sure everything is faster, cheaper, and more accessible for everyone. 

Should I spend all my money buying NFTs?

The NFT market is very volatile and moves extremely fast. It is the definition of FOMO and hypecoaster (hype going on a rollercoaster). Read as much as you can, research the hell out of it and understand that whenever you think it is a smart investment, it probably is a stupid one. 

Hey, you didn't tell me the story of how you made 50%

Oh yes! I hate click-baiting, so here is the story.

First of all, use a new wallet for any big transactions that you are planning to do. If you don't know the reasons then you probably haven't done any big transactions, so you are ok for now (hint: security).

Then, join as many discord channels as you can and read about the company that has issued that NFT.

Is the NFT stored on IPFS? Is the NFT using a non-audited smart contract? Is the NFT actually real?

If your due-diligence is legit then you have to assess whether this is a speculation game or a long-term investment.

My goal with Hashmasks was to buy as many entry levels Hashmasks as I could (the cost was 1-2 ETH etc) and keep them for 2-3 weeks.

As the average price started going up (by 50% to 4x), the same thing happened to my hashmasks. I was getting offers without having my mask on sale - a sign that the market is super hot.

The NFT is a brand new space and every investor should know about it.

Or every fool.

Also published at https://jon.io/i-bought-this-image-for-1500-and-i-sold-it-for-50-in-two-weeks