Thread by @jnordvig

Here is a thread about getting involved with NFTs...

It is not about whether NFTs are inherently valuable (it seems like an unresolved philosophical question). But simply about observing the process for the first time, and the FEES, which can be rather wild!

here we go...

It is hard to have an opinion about a new market / asset until you have actually been directly involved in some form...

...I bought my first Bitcoin many years ago, to experience the process. And I did the same with ETH too, quite a few years back. It was pretty simple, although the identification process involved a bit of a lag on some platforms at the time.

The NFT market is the new ‘hot thing’. Hence I wanted to experience the NFT buying process first hand, by simply just following the steps that pop up from simple google searches.

(as an aside: to illustrate how hot the NFT market is, we sometimes encounter developers who say they have stopped working/coding, because they simply make much more money trading NFTs)

One of the most popular NFT sites seem to be OpenSea, so that was my starting point. It is funny, that the domain is not OpenSea.com, so if you type that in, it will not work (it is io domain)

Once you are logged on, and try to make a bid (if you find something you like!), you realize that you have to have a so-called MetaMask wallet. It is not hard to set up, but you do have to download an extension to your Chrome browser.

If you do not own any crypto currencies already (or are not comfortable with the security aspects of linking accounts), you can add funds using a debit/credit card. If you are new to crypto, and getting in via NFTs, this is the obvious path.

(ps: they forgot NY in menu, odd)

Using a credit card will be expensive, however:

The exchange rate quoted on the ETH was about 6% above the market (as quoted by @tradingview )

But the all in cost of the transaction is much further off than that, as there is also a $5 transaction fee, and a $10.1 network fee.

The effective ETF rate ended up being $4831 vs a market rate of $3940 (or a 22% premium to the market rate).

Now I was (almost) ready to shop

But not quite, as there are transactions (gas fees) too, to actually do the buying .

It turned out the 'gas fee' at the time was about $60.

Hence, there was not much left for actual shopping.

(ikke tilstrakkelige midler = insufficient funds)

Even if I had paid in $115bn, the fees and the bad exchange rate mean that I had less than $40 to actually show for. (= a 65% loss of purchasing power...)

Hence, i had to lower my bids to actually do a test (down to 0.005 ETH)

So what to buy? Initially, I tried to find something that was sold for charity. But I could not find anything. So I thought, why not a Danish flag (that is unique?).

There was no minimum bid, and the cost of producing the NFT was probably near zero (although there may be fees on that end too?). So I gave it a go. And offered 0.005 ETH (or WETH I guess, to be specific).

And then I waited.

After three days, my offer expired (and there was no notification of success or failure). But I went to check on OpenSea (io not com), and it was still for auction, with the original owner still listing it (and my bid just listed as expired).

Hence, I failed to buy my first NFT, although I tried hard (for my standards). But I did learn that 65% of your fiat purchasing power can be eaten up in fees and bad exchange rates in the process (admittedly for a small transaction).

I am sure there are better paths to buy than the one that pops up in the first google search. And maybe I will try a smarter path in the 2nd attempt. But those getting into crypto/blockchain via NFT purchases do need to keep their eyes open for fees in the process.

'Service providers' can get away with huge transaction fees on speculative assets that are moving up fast enough that the transaction cost ends up being small relative to gains. But it is still a cost.

I will leave it at that. The NFT buying process is still a bit mysterious (and costly it seems). And I have still yet to experience the joy of actually owning my very own Non-Fungible Token.

Maybe this thread will generate some tips for my next (more serious) attempt.

END

(ups not $115bn but simply $115)