So, you probably saw a photo of a banana sold online for tens of thousands of dollars and thought, “I can do that! It’s easy money, and it sure beats working.” Afterward, you did some digging and discovered the growing world of NFTs.
To get a little more technical, NFTs (Non-fungible tokens) are digitally encrypted files that can be bought and sold online. A digital public ledger called Blockchain (I’ll cover that one sometime down the line) encrypts the NFT data about the ownership and authenticity. The encryption is tamper-proof, so it serves as proof that the NFT is truly one of a kind. Nothing else could have that unique digital signature. Its “market value” is driven by the rarity and demand: in essence, how much someone is willing to pay for it.
Remember that word “non-fungible”? It sounds like “fungi” but has nothing to do with mushrooms. That just means the seller sets the price for each item instead of a “fungible” currency (or cryptocurrency) where the price per unit is uniform.
Great! So, now we know what an NFT is, how can we sell them and become independently wealthy?
Let’s say you just bought a digital masterpiece. You went through a ton of hoops to make your cryptocurrency wallet. You made or acquired an NFT. Now, you have to connect your wallet to an NFT platform and set up an auction. Do you see a common theme bubbling up in all of these steps?
Let me give you a hint: It’s about your personal information and banking data.
If you are going to enter this world, be sure to research the best type of crypto wallet for you (there are several different kinds). Possibly consider a managed wallet for starters (think of companies like Coinbase). Other types of wallets will lock you out permanently if you forget your password. In fact, there is a programmer in San Francisco with $250 million in Bitcoin, but he cannot access it because he forgot his password and only has two password attempts left. Ensure that the wallet you are using is from a reputable company. NFT and cryptocurrency are a growing new frontier, and countless scammers are cashing in by appearing as a crypto wallet company, or hacking and ransomware.
As you get older, you need to take more responsibility for your private data, such as your social security number, name and address, and medical records. Never turn your critical personal information over to anyone (inside or outside of the cryptocurrency/NFT world) without knowing what they will do with your information. As attackers and hackers become more vicious, the damage they can do with your information can have significantly higher impacts. And, in the event you are one of the lucky few who become rich, your account becomes the target of hackers.
Last thought: Never invest more than you are comfortable losing.
If you take part in trading NFTs, understand that the Internet community could move on, and these become worthless. It’s happened to COUNTLESS collectibles in the past. Do not put yourself and your loved ones in hardship by gambling on these. I urge you to be smart, be safe, and even wait until you are ready to invest with advice from a professional or with oversight by your parent or guardian.
Good luck, and I wish you many great returns on a JPG of a Banana.
GG
-Pete