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Ultimate NFT Gift Guide

Ultimate NFT Gift Guide
Written by publisher team

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If you are considering buying an NFT as a Christmas gift, read this first.

the main points

  • NFTs are digital holdings that live on the blockchain. Its popularity has grown significantly this year.
  • NFTs can have monetary and sentimental value, but there is a risk that their value may not last.

NFTs are up this year. Blockchain data platform Chainalysis estimates that at least $26 billion has been spent on NFTs so far in 2021. Their growing popularity means that many people are considering giving away NFTs this holiday season.

But what exactly are NFTs? Should you get it for your nearest and dearest? If so, how do you do that? We spoke to six experts in cryptocurrency and NFT to find out. If you’re thinking of making it an NFT birthday, our NFT gift guide has all the info you need.

What are NFTs?

NFTs (non-fungible tokens) are digital holdings that live on the blockchain. They can be just about anything, from pieces of digital art to gaming assets to music to sports trading cards.

Pamela Drake, Professor of Financial and Commercial Law at James Madison University, explains that NFTs are private because authorship and proprietary information is hidden in the token. “What makes NFTs different from other collectibles is that there is a system in place to verify the identity of the seller and to authenticate each NFT through the use of the blockchain,” she said.

Think of it as the difference between buying a print of a piece of art versus a signed print or even an original. There may be hundreds of thousands of prints, but the original and signed copies are unique. Moreover, since the basic information is stored on the blockchain, there will be no questions about its reliability in the future.

Is NFT a good gift?

It can be hard to find something special for someone who has everything. Not only are NFTs one of the biggest phenomena of the year, they are also unusual, and their value may increase over time. In addition, there are no supply chain issues when purchasing these digital items.

The big benefit of NFT gifts lies in the potential growth in monetary and sentimental value, says Vivian Fang, associate professor in the accounting department at the University of Minnesota Carlson School of Management. “If someone happens to pick a currency with high growth potential, the value of the NFT gift can continue to rise for years,” she said.

“NFTs are also quite new to most people, so they make unique gifts, especially for those who are tech savvy. The sentimental value of gifts like these will only multiply over time as people still remember their first few NFT gifts after decades of the line.”

However, Fang warned that many NFT projects may fail, making the market very speculative. The concern is that the gift you are buying may become worthless in a few years.

Professor Drake agrees. “While there is a lot of excitement (and the press) regarding NFTs, it remains to be seen whether the phenomenon has lasting power as an investable asset, or whether pet rock syndrome or tulip mania,” she said.

Some people have compared gifting an NFT to giving someone a lottery ticket or scratch card. But it could be more than that. As long as the NFT has a value to the recipient, it won’t be very significant if it subsequently drops in value. For example, if you buy a Michael Jordan NFT for a lifelong fan, they might be happy to own it no matter what happens to the price.

What you need to know before gifting an NFT this holiday season

Before you dive into NFTs and buy them for all your nearest and dearest, be aware that they won’t be for everyone. We’ve touched on the possibility that they may lose their value, but there are a few other factors to consider.

1. Gas and transaction fees

You should be aware of the fees, says Himang Subramanian, associate professor of information systems and business analytics at Florida International University. A lot of NFTs are minted on the Ethereum (ETH) network, which is struggling with high gas fees.

Subramanian points out that there are ways to reduce gas charges, but he also says that it’s not the only additional costs involved. “In addition, NFT platforms charge between 2% and 12% in technical and platform fees for listing NFTs,” Subramanian warns.

2. The recipient will need a wallet

As Dan Hunnewell, founder of Crypto Baristas and Coffee Bros told us, it’s a good idea to make sure the recipient has a wallet and will understand the value of what they’re receiving. Crypto Baristas are hand-drawn characters that support the world’s first NFT-funded coffee shop.

“You certainly wouldn’t want your gift to fall on her face if she tried to give something to someone they knew nothing about,” he said. “If someone is already passionate about NFT or understands the concept, they might be an ideal candidate for NFT.”

Not only will the recipient need a wallet, but there are a lot of different NFT platforms and it can be difficult to move your assets from one platform to another. Finally, be aware that some wallets have age restrictions, so it can be difficult to give an NFT to someone under 18.

3. Not all NFTs are created equal

There is a whole host of different NFTs, from videos of sports moments to plots of land in the metaverse. You will need to find the right NFT for each of your loved ones. For example, there’s no point in giving the NFT of a Whitney Houston song to someone who doesn’t like its music.

Personalizing NFT gifts is a great opportunity, said Alex Salnikov, co-founder and chief product officer of popular NFT platform, Rarible. You can choose a digital set that aligns with the recipient’s favorite hobby or creator. “If you really want to get personal, a PFP avatar (profile picture) that matches the recipient’s personality or style is a thoughtful gift that they can flaunt on social media like Twitter,” he says.

There are two types of copyright issues to consider. First, when you buy NFT, you are not buying the copyright. This is still up to the creator, who may continue to sell other similar works in different formats.

Moreover, there have been cases of NFT scams where unscrupulous players mint and sell NFTs for an artist’s work without their permission. A spokesperson told us,

“When individuals purchase NFTs, they should carefully research the artist and the art itself as there can be situations where the NFT may not be original.”

5. NFTs have a bad reputation for environmental issues

These digital collectibles can come with a significant carbon footprint. So much so, that one artist on Twitter called it an “environmental nightmare pyramid scheme”. Be careful if you’re buying for someone concerned about their carbon footprint.

It is possible to find more environmentally friendly NFTs, Salnikov points out. “There are existing solutions to help significantly reduce energy emissions related to minting, and Rarible is at the forefront of creating a sustainable digital future for users.”

For example, Rarible has partnered with more energy-efficient blockchain networks to reduce its footprint. It is also working with a blockchain-powered decarbonization marketplace so that users can offset carbon costs.

How to gift an NFT

Buying an NFT as a gift is not as simple as heading to the store and picking up a scented candle. Just as you wouldn’t buy a random piece of art because you wanted to own “art”, you’ll need to find the right NFT.

  1. Find the NFT you want to buy and create an account. There are many NFT platforms, including Rarible, OpenSea, Nifty Gateway, and Mintable. It can be a little daunting when you first log in, so try to search for specific topics that reflect the interests of your recipients.
  2. Buy Ethereum (or the cryptocurrency NFT is trading in). Most cryptocurrency exchanges sell Ethereum and make it easy to deposit regular funds like USD.
  3. Set up a crypto wallet. There are a number of external cryptocurrency wallets out there, but Metamask is the most popular. Transfer your crypto from the exchange to your wallet. Then you can connect it to the NFT platform and purchase the NFT of your choice.
  4. Transfer the NFT to the recipient. You will need to ask them for their wallet address, which will be either a long string of letters and numbers or a QR code. If they don’t have a wallet, you may need to set one up for them.

learn more: Best NFT Markets

If the idea of ​​wallets and asset transfers seems overwhelming, you could instead give someone their cryptocurrency so they can simply buy the NFT themselves. If you’re shopping for an NFT fan, but don’t know much about the NFT market, there are other options. For example, they may appreciate having a digital frame to display their NFT set. Or a hardware wallet to securely store their assets.

Overall, NFTs can make great gifts this holiday season that people will remember for years. Buying one as a gift could also be the start of your own journey into digital collectibles. Beware – As Crypto Baristas’ Hunnewell tells us, it can be addictive: “Once you’re in the NFT world, it’s hard to get out, and that’s OK!”

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