Here at Altercap, we specialise in helping private individuals and companies get started with cryptocurrencies and other digital assets. Over the last few days, following Facebook's announcement, we have received numerous inquiries regarding NFTs and the ecosystems that surround them. In response to this growing interest, we have prepared this list of three key principles that investors might want to consider as they evaluate potential opportunities in this space: Principle 1:
Value lies in the basic infrastructure
At this early date, the greatest amount of value for investors may not be in the NFTs, but instead in the basic infrastructure that will make up the growing Web 3.0 ecosystem. This includes the blockchain networks themselves, DeFi protocols, and NFT marketplaces.
If one were to think of these opportunities as a pyramid, the foundation would without a doubt be the blockchain networks on which NFTs are issued. The logic, here, is simple: The more NFTs issued on a blockchain, the more that network's native token is likely to be worth. As of the writing of this article, Ethereum dominates in terms of NFT issuance.
One should also keep an eye on other networks, including Cardano, Solana, and Polkadot. Each of these blockchains offers certain technological advantages over Ethereum that may grow in impact as the networks become larger.
The next layers in our pyramid are the marketplaces and NFT tools. Many of these companies and organisations offer utility tokens for purchase on cryptocurrency exchanges. Further, the tokens issued by large decentralized multiverse and gaming platforms like Decentraland, The Sandbox, and Axie Infinity may be of interest.
It may also be worthwhile paying attention to DeFi protocols, which have already begun to provide the decentralised financial systems on which the metaverse is beginning to operate. These range from stablecoins, to lending platforms where NFTs can be put up as collateral.
Invest in what you know
In crypto, there is an entire metaverse
of opportunity for investors. This means that you don't
need to jump in headfirst. We're still early, and there is plenty of time to find the very best returns on investment for your portfolio.
We recommend going slow for now. Follow a bit of the investing advice given to us by the Oracle of Omaha himself, Warren Buffett: "Never invest in a business you cannot understand." Take your time and look for projects connected to your field of specialization or training. If you can't find one yet, it'll be sure to arrive soon.
For example, if you work in IT, you may be interested to know that NFTs are already being issued that represent domain names. This, of course, is a major step towards the development of a truly decentralised web. If you're more legally- or business-minded, check out the projects that are minting NFTs that represent intellectual property, real estate, and even things like concert tickets. Financial specialists might want to look into tokenized yield-bearing assets and derivatives. These things, too, are being transformed by NFT technology. Principle 3:
Learn the basics of crypto
The difference between holding cryptoassets (including cryptocurrencies, utility tokens, and NFTs) and other forms of property like bank deposits and stocks is the responsibility it places on the owner. Assets issued using a blockchain are by definition sovereign.
This means you need to be prepared to look out for their security, whether this be by setting up your own custody strategy or by entrusting them to a trustworthy third party.
Before you get started investing in any kind of crypto, it is essential that you get informed as much as possible. Our goal at Altercap has been, since our founding, to streamline this process for busy individuals and companies.
To this end, we regularly publish FAQs, guides, and articles like this one to our Knowledge Base
. If you are ready to get started, feel free to contact our team of crypto-financial specialists
, who will guide you through the entire process.