How to Build the Right Mindset in the NFT Space

Posted On: 11 Sep 2023

A digital landscape that is much similar to the wild west, venturing in the NFT space sure has its ups and downs. But doesn’t every new space come with new challenges?

Where there are countless new opportunities, there are countless possibilities of going through challenges that you’ve never faced before. And, how can one ignore the possibility of being scammed. 

But, let’s get into how you can build the right mindset in the space after you’ve got a thorough idea of what NFTs are. 

What’s an NFT? 

Before getting into the dictionary definition of what an NFT is, I’d like to explain what NFTs are through an analogy. 

So, take a $10 bill and try exchanging it with someone else for another $10 bill. Now, after exchanging the $10 bill, ask yourself, was there any difference in value of both these bills? No, there isn’t! They’re the same in value, no matter how many times you exchange it with other people. 

What I just explained in the para above is the concept of fungibility. 

So, now let’s get down to breaking the term NFT down into bits for better understandability. The term NFT is an abbreviation for “non-fungible token”.

Now, the literal meaning of fungible is replaceable with another identical item, which makes non-fungible that’s something irreplaceable with identical items.

In simple words, a non-fungible item can be something that is unique and cannot be replaceable with any item that may be identical. 

Now, what’s left in the term is token? See, a token is a blockchain based way of representing a unique digital or even physical asset (for example: a piece of digital or physical art) by giving certificate of ownership.

So, a non-fungible token (NFT) can be defined as a unique digital/physical asset that can be owned by a person on the blockchain.       

Defining the NFT Space 

Now, let’s get down to what NFT space is, the space that everyone’s been talking about lately. 

To put it simply, anything/everything and everyone that has anything to do with NFTs makes up the so called NFT space. 

It isn’t really a tangible space but an imaginary one, where a group of people, across the world, are bound together by their love and interest in NFTs.

From creating NFTs to collecting them and trading them, everything that’s happening comes under the umbrella of this space.   

Growth of NFTs in the world 

In 2009, the world was somewhat taken by surprise by the blockchain technology. No one thought that something like this would come forward.

Yes, the first use case was a currency, Bitcoin, but it opened the door towards endless new possibilities that this technology could lead to.  

The concept of representing ownership of assets on blockchain existed way before the first NFT ever came out. In fact, the idea was present even before the creation of Ethereum. 

This concept made its way with the name of colored coins, which was introduced by Meni Rosenfield in a paper released in 2012. 

In 2013, the idea of Ethereum was conceived and soon after the work started on developing the Ethereum chain. By July 2015, Ethereum blockchain went live. 

Now, most of the world knows Ethereum as not only a currency but also a major blockchain for NFTs as well. However, the first ever NFT to be minted was known as “Quantum” by Kevin McCoy, a digital artist, on Namecoin Blockchain.

With time, what started as an industry that was purely based on passion, the NFT space grew leaps and bound. After 2017 NFT gaming and many metaverse projects also started coming forward, which boosted the space even further. 

2021 is considered as the first year in the NFT space due the explosive surge in both the demand and supply of NFTs. Where the total sales volume was around $95 million in 2020, it boosted up to a staggering number of $25 billion in 2021.     

Reasons for the Rise in Demand for NFTs 

The recent rise in the total sales volume of NFTs clearly shows a massive increase in its demand globally. 

But, why is it so? Why has the demand for NFTs risen so much? 

Understanding this may also help in understanding the mindset of many people in the overall space. 

The massive rise in the demand for NFTs can be due to a variety of factors. Let’s first look at this scenario as how it appears to be. Apparently, the global demand for digital collectibles and art has risen considerably, which has made quite an impact on the overall demand for NFTs as well. Other factors may also include the rising popularity of blockchain based games.  

Over the years, it has been observed that people have acquired a taste for not only digital art but also for digital items and/or characters that can be used in blockchain based games as well. 

However, these are not the only reasons for the rising demand for NFTs. Here are some other factors that contribute largely to the increasing demand for NFTs:

• Acceptance and trade of cryptocurrencies.
• NFTs make it possible to trace the original owners quite easily.
• The ownership records of NFTs cannot be changed, deleted or copied.
• NFT ownership isn’t only traceable easily but doesn’t require any third-party verification either.
• NFTs can be divided in smaller quantities/denominations just like cryptocurrencies.  

How to Develop the Right Mindset in the NFT Space 

While the NFT space is growing exponentially, it can still be considered in its early phase. There are many things happening in the space that are questionable. 

From rug pulls to an NFT being sold for millions of dollars, what drives the value of NFTs and how can a person, who doesn’t know anything about this space gain benefits from it?

Well, it all comes down to having the right mindset. 

The Right Mindset for Collectors & Traders 

The NFT space is new and nobody knows everything about it. Even the leaders in the NFT space are still learning about it by experimenting for innovation. 

While high monetary returns/benefits may sound quite alluring for freshers, there is a predominant requirement of being open to learn at all times, which is the foundation of building the right mindset in the NFT space.

Here are a few tips that can help newbies in space to build the right mindset. 

The Need for Constant Skill Development 

While, the comprehension of the NFT basics is a fundamental requirement for understanding NFTs but unfortunately it’s not enough for building a career in the space. 

Keeping an eye on market statistics can also only help you so much, ultimately a person needs to discover all the courses and study material online and chug them down. Learning as much as possible about blockchain and NFTs is the only way forward in this space.

Moreover, since the NFT space is new and finding authentic courses and study material is difficult, gelling in the NFT communities on Discord and following the space leaders on Twitter is extremely important. 

DYOR (Do Your OWN Research)

Almost over 80% of the NFT space consists of collectors and traders, who are just in it for the monetary benefits. 

Now, there’s nothing wrong in minting NFTs with the intent of collecting and/or trading for a profit. However, where most collectors and traders make a mistake is not to research a project or collection thoroughly. 

Every seasoned collector or trader will always research each aspect of the project or collection being launched. From the team behind the project or collection to its future planning, artwork and overall roadmap, each aspect of the project/collection carries considerable weightage when making a decision to mint or not?!

Say No to FOMO (Fear of Missing Out)

Most collectors and traders tend to lose sight of their goals by giving into FOMO. Being in the NFT space as a collector and/or trader, you must realize that there will always be more legit projects and collections, backed by authentic teams and VCs, for you to mint. 

So, patience and keen analytical skills are the key components to becoming a successful collector/trader in the NFT space. In addition, this also decreases your chances of loss as FOMO increases the possibility of you investing into rug pull projects.    

The Right Mindset for Creators 

It won’t be absolutely false to say that most creators in the space aren’t experimenting for innovation. See, initially the creators in the space were experimenting and exploring to come up with something innovative. 

However, with the success of collections such as cryptopunnks and BAYC (bored ape yacht club), most creators started to mimic the same style. 

For two to three years, thousands of PFP based collections copying the successful collections were seen to emerge in the space. And to everyone’s surprise most of these collections were even somewhat successful. 

But, why were most of these copycats successful? Doesn’t make sense, does it now? 

See, most creators were cleverly using collector’s and trader’s FOMO to sell out their own collections and projects. 

Now, it’s not as if good projects, which were bringing innovation and creativity to the space weren’t there at all, they were emerging in the space too however, not in the quantities as the mimicked projects. 

So, based on the behavior of creators in the space so far, here are some tips that can help in building the right mindset for creators.  

Be in it for Sheer Passion

If you’re a creator then the first and most important thing for you to grow and be successful in this space is to be passionate about creating something new in the NFT space. 

See, there have been countless creators and rug pullers, who have been in the space just for the short term and only looking at monetary benefits. 

However, if you’re a creator then the driving force behind your work should be your passion to create rather than monetary benefits alone.

Being a creator just for the sheer passion of creating NFTs will help you bring originality to the space, not to mention it’ll also help you bring innovation to the space.   

Be Open to Change

Being a creator, you must be open to the idea of failure. Free yourself from fear of failure because when you’re looking to create something new, unknown challenges will make their way towards you. 

You should constantly persevere to evolve with the space and understand the dynamic needs of the future space. For this, you must be open to change because a rigid and fixed mindset means death in this fast paced and ever-evolving NFT space.

Bring Something New to the Space 

It’s extremely important for you, as a creator, to work on something that the space hasn’t seen before. While, creating innovative projects will require a lot of work, creativity & experimentation but this is the only way that you can bring an original idea into the space.

Inducing FOMO and simply selling out your project or collection should not be your end goal. In fact, you must look to the future, create a solid roadmap for your projects, which will help keep your audience interested in the long run.   

Wrap up 

Whether you’re a creator or a collector/trader, success in the NFT space is dependent on the right mindset because that’s the only thing standing between you and your growth. Understanding how the space works, facing challenges head on, learning from mistakes, setting long-term goals and completely immersing yourself in the craft is the only way to move forward.