The NFT on-ramp is still too steep

Years and years ago, to get a better handle on the then-nascent crypto economy, I bought some bitcoin. About $50 worth, if memory serves. And then I moved it to BTC-E, at which point I bought some random coins to see how that would go.

BTC-E eventually closed after a massive money-laundering fine, so I presume that whatever coins I bought back then are lost to the void. That’s why I haven’t had any disclosures in anything I’ve written about crypto since — I don’t own any that I can access, which is the same thing as not owning any crypto at all.

That’s no longer the case. After chatting about the NFT craze once or twice on the podcast, I realized that the trend wasn’t going away, which meant that I needed to give it a try. Most folks who write about football have thrown a football. It seemed pretty reasonable to dip a single toe into the NFT waters if I was going to keep covering them.

After doing a little playing around, my impressions are that NFTs are neat and fun and silly — and that their on-ramp is still far too steep for most folks.

Hello, I’m Alex and I am an NFT noob

To get into the NFT game, I opened a Coinbase account and bought $50 worth of ether. My goal was not to buy lots of crypto, use it to purchase NFTs and reap stonk-like gains. I just wanted to run the process and figured I could find some sort of unloved NFT for $50 worth of Ethereum’s token. I even considered buying a piece from an artist I like, whose physical art I own and who makes NFTs.

So, I moved the funds from Coinbase to NFT market OpenSea, where I also had a wallet. The exact linkage between OpenSea and MetaMask wasn’t 100% clear during the process, but, hey, I’m here for a good time, so I rolled with it.

Sadly, fees from Coinbase and transferring my pittance of ether quickly ate into my crypto wealth:

From this point, I figured I had paid the piper and was ready to buy something worth as little as possible, closing this chapter on my NFT mess-around.

Regular crypto users and traders know what’s coming, but let me explain for the rest of the crew. There’s a thing called gas fees in the ether ecosystem, the price that you pay to have your transaction executed. And it turned out that the gas fee alone for the purchase of an NFT that cost as close to zero as possible was more than the total ETH that I had in my account.

So, what I had done was turn $50 into less than $50 and locked the funds in an account on an art marketplace where I couldn’t afford to buy something that cost nothing.

Thankfully, someone sent me a pity NFT for my live-tweeted troubles, so I now own this. Which I can’t sell because I don’t really want to get into the tax issues and because receiving a gift is against journalistic ethics.

At some point, I guess I’ll sell the NFT, explain to my spouse why our taxes are more complicated than usual, and donate whatever money it is worth at the time to charity. I’ve received a few offers for my free NFT for around $300, which is weird. It’s like someone handing you a small plastic chit that has a pretty color and then having folks queue up to offer you several hundred dollars for it.

I also minted my own NFT of a Twitter thread discussing NFTs with a friend. No one wants to buy that one, but, again, it’s good to experiment.

This little saga closes with Thugbirdz, an NFT project that sports highly pixelated images of birds. I looked these up on OpenSea and found one that had a bird smoking a cigarette for a very low priceAnd it featured a “buy with card” option.

Bingo, I thought. I can just use one of my fiat cards to buy this bird, and then I will have actually managed my original goal of purchasing — as opposed to minting or receiving — an NFT. But after mucking around with the service to use a card — MoonPay — and verifying that I am in fact who I am, two of my cards hit fraud barriers.

No smoking Thugbird for Alex.

Anyway, all this is to say that I like buying art and I think NFTs are good fun. But the on-ramp to actually getting one is too high. Perhaps that’s why OpenSea has added 107,000 active users in the last week, per DappRadar, instead of, say, a few million. Folks who want to eventually climb through the software web required, and the huge fees that must be paid, will manage. But if NFTs want the more regular types like yours truly, the barriers need to come down a little. Or at least the fees.

Perhaps proof-of-stake will fix this. Or Solana. Regardless, here’s to tinkering. And helping Coinbase’s next-quarter earnings report by a few dollars.