In this video clip from "The Crypto Show" on Motley Fool Live, recorded on Feb. 2, Fool contributors Jon Quast, Travis Hoium, and Chris MacDonald discuss the two different ways that investors can buy NFTs.
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Jon Quast: If somebody was interested in buying an NFT, there's two ways to do that, right? You can either buy it on the drop, when the project goes forward, the mint, or you can buy it on the secondary market. I don't know if you just want to speak to that really quickly. Maybe the basic process somebody will go through and what would influence that decision?
Travis Hoium: Yes. On a basic level, the mint is the first sale of the NFT. Let's go with our Bored Ape Yacht Club. Those minted for .08 Ethereum (ETH 0.93%), so about $200.
Quast: Right. Yes. Not very much.
Hoium: [laughs] Just to give you an idea of how far that has gone up. There's typically a website, sometimes they're moving out to marketplaces where you connect your wallet. That's another topic we can dive into another day if people would like, but you connect your wallet, you buy with whatever cryptocurrency they're using Ethereum, Solana (SOL 2.21%) are two of the most popular right now.
You basically just buy it there, and you're the first one to own the NFT, and then it just goes in your wallet. The other way to do it is on the secondary market, which is just buying from a marketplace, just like you would stock on a stock exchange. There are a number of different marketplaces that are typically dedicated to a single blockchain.
OpenSea is the biggest, they're on Ethereum, they'll do some stuff with Polygon (MATIC -0.79%). Then there are a number of others on Solana. There are others like LooksRare (LOOKS) on Ethereum as well. A number of different secondary marketplaces, they all effectively do the same thing. It's just a matter of where stuff is posted and where you prefer to do your NFT shopping.
But those are the two options. Minting can be a really great way to get into really successful projects early. It can be really hard to be able to mint. There are different lists that you might have to get on or NFTs that give you access. The risk is that it drops immediately too, so that can happen pretty regularly. It can also bounce. It's a little bit risky doing the mint, but that is something that a lot of people who are actively involved in NFTs are getting into a lot more.
Chris MacDonald: Travis, do you mint or do you buy on the secondary market? Or do you do a bit of both?
Hoium: I do a bit of both. I try to do the research ahead of time so that I know if it's something that I want to mint. I really dove into this over the last three months. Which ironically makes me an [laughs] OG in the NFT space somehow.
But this is something that can be more risky, especially now as more and more projects reach the market. Like Jon said, a lot of them are cut and paste. I'm a little bit more leery about minting today because I like to see that they're actually building something in a week or two after mint. But it really depends on case-by-case.
