NFT On-Ramp: Why It's Still Difficult to Enter

Early Experiences with Cryptocurrency

Many years ago, seeking to understand the emerging cryptocurrency landscape, I initially purchased a small amount of bitcoin. The investment totaled approximately $50, as I recall.

Subsequently, I transferred these funds to the BTC-E exchange, where I experimented with acquiring various other digital currencies to observe their performance.

The Loss of Initial Investments

BTC-E ultimately ceased operations following a substantial penalty related to money laundering. Consequently, the coins I had purchased through that platform are likely irrecoverable.

This experience explains why I have refrained from making any disclosures regarding cryptocurrency holdings in my subsequent writings. I possess no accessible crypto assets, effectively meaning I do not own any.

Re-engagement with Digital Assets: NFTs

This situation has recently changed. Following discussions about the growing popularity of NFTs on the podcast, I recognized the trend's persistence.

Therefore, I decided to personally explore this new area. Just as most sports journalists have experience playing their sport, it seemed logical to gain firsthand experience with NFTs if I intended to continue reporting on them.

Initial Impressions of NFTs

My initial exploration of NFTs has led me to believe they are interesting, enjoyable, and somewhat whimsical.

However, I also observed that the process of entering the NFT space remains overly complex for the average user. The barrier to entry is still significantly high.

My Initial Foray into the World of NFTs

As a relative newcomer to the NFT space, I initiated my exploration by establishing a Coinbase account and acquiring $50 worth of ether. My intention wasn’t extensive cryptocurrency investment, but rather to experience the NFT purchasing process. I aimed to locate a modestly priced NFT, potentially around $50 in Ethereum, and even considered acquiring a digital artwork from an artist whose physical pieces I already own.

I subsequently transferred the funds from Coinbase to OpenSea, an NFT marketplace where I also possessed a digital wallet. While the precise connection between OpenSea and MetaMask wasn’t immediately apparent, I proceeded with the process.

Unfortunately, transaction fees levied by Coinbase and the transfer of my limited ether significantly diminished my available cryptocurrency:

At this juncture, I anticipated being able to acquire a low-value item, effectively concluding my initial NFT experiment.

Experienced cryptocurrency users are familiar with gas fees within the Ethereum network – the cost associated with transaction execution. I discovered that even for an NFT priced near zero, the gas fee exceeded my remaining ETH balance.

Consequently, my $50 had been reduced to less than $50, with the funds remaining inaccessible for purchasing even a nominally priced NFT on the art marketplace.

Fortunately, a kind individual sent me a complimentary NFT in response to my publicly shared experiences. I now possess this digital asset, though I am hesitant to sell it due to potential tax implications and ethical considerations as a journalist.

I anticipate eventually selling the NFT, disclosing the transaction to my spouse for tax purposes, and donating the proceeds to a charitable organization. I have received unsolicited offers of approximately $300 for this gifted NFT, which is rather unexpected. It’s akin to being presented with a colorful token and then receiving substantial offers for it.

I also created my own NFT representing a Twitter conversation about NFTs with a colleague. However, there has been no interest in purchasing this particular piece, which is acceptable as it was primarily an exploratory exercise.

This experience culminated with Thugbirdz, an NFT collection featuring pixelated bird imagery. I located a bird smoking a cigarette on OpenSea, offered at a low price, and it included a “buy with card” option.

I believed this would allow me to directly purchase an NFT using a traditional credit card, fulfilling my original objective. However, after attempting to utilize the MoonPay service and verifying my identity, two of my cards were flagged for potential fraud.

Therefore, acquiring the smoking Thugbird proved unsuccessful.

In conclusion, I enjoy art and find NFTs intriguing. However, the initial barriers to entry are substantial. This may explain why OpenSea has only seen an increase of 107,000 active users in the past week, according to DappRadar, rather than a much larger number. Those willing to navigate the complex software and absorb the significant fees will succeed. But for broader adoption, the obstacles must be lowered, or at least the fees reduced.

Perhaps the transition to proof-of-stake will alleviate these issues, or perhaps Solana offers a viable alternative. Regardless, I remain enthusiastic about experimentation and contributing to Coinbase’s quarterly earnings, even if only by a small amount.