Luis Pazos 
If you follow the news, you’ve probably seen some wild headlines about NFTs. For instance, CNBC had a story about a 12-year-old coder earning over $400,000 selling NFTs of "weird whales." Then, there was a Fortune piece about a teenager with an NFT empire worth $26 million. It’s mind-blowing, especially if you don’t even know what an NFT is. So, what are NFTs exactly? How do they work, and how can you make money with them? And how are kids as young as 12 profiting from them?
I’m really into crypto investing, but NFTs—Non-Fungible Tokens—are pretty new territory for me. To get a grip, I talked to NFT pro Robert Farrington, who runs The College Investor and Cult of Money, which focuses on crypto and NFTs. If you’re looking to understand NFTs and how to start investing, you’re in the right place.
What Is an NFT?
Before jumping into NFT investments, it’s essential to know what NFTs are. According to Farrington, NFTs are more than just .jpeg images. They’re blockchain-based digital representations of smart contracts. They can be collectibles, digital art, or even passes that grant access to specific communities, like a digital ticket. NFTs are also popular in play-to-earn gaming, allowing users to earn crypto by playing. Some NFTs have even been auctioned at Sotheby’s like traditional art.
Another type of NFT is NBA Top Shots, where you can buy digital videos of iconic basketball moments, like LeBron James dunking. These are limited edition, making them similar to rare art pieces. Farrington explains that people have always loved collecting unique items, and NFTs are just the digital version. NFTs are also great for proving ownership and authenticity, similar to traditional artwork provenance.
Other Ways NFTs Are Used
NFTs can also serve as tickets to events. For example, Gary Vaynerchuk sold about 10,000 tickets to his conference as NFTs, which could increase in value over time. This setup benefits content creators because they can include royalties in the digital contract. Vaynerchuk, for instance, makes a 5% cut from every resold ticket. This approach could also apply to season tickets for sports games.
In summary, NFTs have various uses, making them more popular. They’re unique and multifaceted, and their applications will only grow.
Where Do You Buy NFTs?
If you’re interested in buying NFTs, you’ll need to know where to find them. When I started with crypto, I had to figure out which platforms offered it, and the same goes for NFTs. You need to move your funds to the right platform.
"It’s definitely a process, and it starts with where you keep your crypto," says Robert. Cryptocurrency is decentralized, but platforms like Coinbase hold your crypto for you. To invest in NFTs, you need to move your crypto to a hardware wallet. Farrington uses a Ledger hardware wallet and a platform called Metamask. This setup helps protect your assets from hacking, a significant risk in the crypto world.
You can buy NFTs on platforms like OpenSea and Rarible, which are like the eBay of NFTs, offering both "buy now" options and auctions.
The Popularity of NFTs Explained
Currently, the top NFT collections include CryptoPunks and Bored Ape Yacht Club. These collections feature quirky digital images, but they’re more than just pictures. Farrington explains that popular NFT collections are often built around communities. Buying an NFT is like joining a club of like-minded people, and these communities can add value through meet-ups and collaborations. For example, Bored Ape Yacht Club recently partnered with Adidas.
Understanding NFTs is like understanding valuable baseball cards. A rare card might be priceless to a fan but meaningless to others. Farrington’s NFT holdings reflect his interests, and he suggests investing in NFTs that align with what you love.
The Takeaway
For those curious about NFTs, Farrington’s advice is straightforward: you need to dive in to understand it. Start by browsing platforms like OpenSea and Rarible, compare projects, and learn about their origins. After buying your first NFT, join platforms like Discord to engage with the NFT community.
NFTs are far more than .jpeg images and might even be the future of art as we know it.
