NFT purchase experience… Nightmare to buy a pink cat
The power of the hype surrounding non-fungible tokens (NFTs), a technique for verifying ownership with a blockchain, was considerable.
Who wouldn’t be fascinated by the bright, colorful, digital-only art that sells for millions of dollars?
But my first NFT investment experience wasted a lot of time and money and was stressful… Well, I guess it wasn’t a lot.
Because NFTs do not have a physical shape like a painting (artwork), they exist only as digital assets.
So the only thing I paid for was a record of ownership of this digital asset. In other words, basically, my number on the website was displayed next to the cat cartoon character.
I used ‘Opensea’, one of NFT’s major trading platforms, to find my first purchase target. It was a light gift to give to a colleague who was changing jobs.
OpenSea offers a variety of content, from classic art adaptations to album covers for duo rock band ‘The White Stripes’.
My former boss and I loved cats, so I decided to buy a CryptoKitty, a virtual cat that you can collect and trade like a digital Pokemon card.
Some of the ‘CryptoKitties’ released in 2017 currently sell for millions of dollars, but the average price is around £175.
These cats have different characteristics such as pattern, color, and “firstige” (the personality of each picture of Cryptokitties in a limited time).
Due to my limited budget, I had only very small kittens to choose from.
In the end, I chose ‘Kim Catdarshian’, a pink cat with diamonds all over its fur.
Kim Katdashian’s profile states that she has a mouth “confused about what it means” and can act quickly, so it takes 10 minutes to “calm down”. Considering that the name Katdashian is derived from the name of actress Kim Kardashian, it makes sense.
change in the value of a currency
NFTs are sold in cryptocurrency. I traded with Ether (ETH) stored on the Ethereum blockchain.
Like Bitcoin, Ethereum is a highly volatile currency, and transactions are verified through a computer. This process, which is called ‘mining’, meaning buying money, uses huge amounts of energy, mainly from fossil fuels.
Kim Katdashian sold for 0.006 ETH, which was around £13 at the time.
I installed a digital wallet to convert money in my bank account into cryptocurrency using a chrome extension called metamask.
It also paid miners (those who mined cryptocurrencies or companies) running the network a minimum amount of £30 plus a “gas fee” for all ETH transactions. It was similar to tipping a restaurant employee.
After the first payment, I had nothing left to pay for less than half of the recommended gas cost.
It would have cost more if I had transferred the ETH back to my bank account. So, I had no choice but to proceed. I wanted the miners to process my NFT bids for a low fee with sympathy for me.
After that, I had to wait for approval to sell on Ether.
As the value of my ETH skyrocketed and fell, I thought about spending more money to speed up my transactions. But I did not spend any more money, and after three days I finally got Kim Katdashian in my hands.
All of this experience absorbed all the fun elements of my fluffy pink friend Katdashian. If I try to sell Katdashian in the future, it will cost me.
I should have known a little more about all the extra costs associated with trading ETH. But I was just trying to make a whimsical and fun gift.
It’s hard to imagine making money with NFTs unless you’re prepared to spend a lot of money and time learning the market.
Although I am a tech journalist (though I am not a cryptocurrency journalist), I was puzzled by how complicated this process was, and realized that I was not the only one who felt this way.
“I don’t know what to do”
Numerous users have complained on various online bulletin boards that transactions are “blocked” after demand has arisen and high gas costs clogging the network.
A user on the online forum Reddit said that he lost more than $150 while trying to buy Kings of Leon’s latest album NFT, which was worth about $53.
Many users have lost money looking for gas bills and system delay issues.
There was also a post saying “I don’t know what to do”. “Whatever is behind the technology, I hate it,” the author wrote. “I will never forget the feeling of this exhausting and exhausting experience.”
The author added, “The amount I mention is nothing to anyone, but hard-earned money for me.”
In 2017, when Cryptokitties demand increased, the network was paralyzed for a while.
David Gerrard, author of ‘Attack of the 50 Foot Blockchain’, said, “The Ethereum network is literally not good enough for a cat picture.” Ethereum has been struggling with this network problem for years He said he was trying to solve it.
Apart from blockchain, where transaction history is tied into blocks, there are other problems here.
- If someone pays more for gas than you at an NFT auction and their trades are approved before yours, you could lose money.
- Digital assets can be deleted from the Internet, just like the recent NFT video ‘Charlie Bites My Finger Again’ sold for £500,000.
- Websites that display your wallet number on the blockchain can go offline.
- It is difficult to determine whether an NFT seller owns the copyright.
‘Purchase a receipt’
“NFTs are just a new type of magic bean that crypto enthusiasts can sell for money, but all you buy is receipts,” Gerrard said. “This market is completely fake.”
Some experts have warned that this vague and complex technology is being used as a veil to exploit those who do not understand it.
Artists also complained about the fees involved in creating NFTs. Because “gas” is also used to approve tenders and transfer ownership of artwork.
One artist posted on Reddit that he lost $200 in commissions after selling NFTs for $1.
The artists also wrote, “If it doesn’t sell at a price enough to cover the miners’ fees, it’s not worth it.”
“Maybe some sites are taking advantage of the recent public interest in NFTs to make small miners rich with huge fees? How are so many things being sold so cheaply? Because of fees, fees, and higher fees.”
Graphic designer Mike Winkelman (stage name Beeple) sold $69 million worth of NFT art and reserved a private plane to celebrate.
However, cryptocurrency journalist Amy Caster said the success story could “seduce” artists with smaller trades to a loss.
“All these scams are trying to get money from artists,” Caster said. “NFTs have absolutely no intrinsic value.”
“You’re using all the patience of gullible artists,” Caster said. “They’re defending this because they put their money into this dream come true. As long as the market remains volatile, everything can go away.” .