Recently, some friends asked me what NFT is again, and I found that quite a few people still have a fairly vague understanding of this concept. Actually, put simply, an NFT is a non-fungible token—each one is unique—which is completely different from tokens like Bitcoin that can be exchanged for one another. You can think of it this way: Bitcoin is like Chinese yuan—one bill for another is interchangeable—but NFTs are more like art pieces or limited-edition collectibles, and each one has its own characteristics.

When it comes to NFT development, I still remember how popular CryptoKitties was in 2017. At that time, it even clogged up the Ethereum network badly. The CryptoKitty named Dragon sold for $110,000, and looking back, it still feels pretty crazy. Later, although the hype cooled down, NFTs did not disappear—instead, they gradually made their way into art, gaming, sports, and other fields.

The real boom came in 2021. After projects like CryptoPunks, Bored Apes, and Art Blocks appeared, the whole market basically exploded. Large numbers of well-known artists and celebrities flooded into this space. But I noticed a phenomenon: early NFTs had extremely strong speculative attributes, and only in the past two years have they gradually started to integrate with the real economy—for example, avatar NFTs supporting their value through brand empowerment.

That said, to be honest, the current NFT market situation isn’t very optimistic. According to data, the total market capitalization is falling, trading volume is shrinking, and the floor prices of many blue-chip projects are hitting new lows. This is completely different from the crazy atmosphere of 2021. But the direction worth paying attention to is tokenizing real-world assets—things like paintings and calligraphy, real estate, and more are being explored—which could be the next round of development opportunity.

As for how to choose an NFT project, my experience is: never focus only on whether the team is strong or whether there are celebrities backing it. Jay Chou’s endorsement of Fantasy Bears was a brutal lesson—it ended in chaos and left people with nothing but losses. The reason Bored Apes has managed to survive is that they continuously create value with their IP, have real business models, and the ability to generate “cash flow.” So the first step in investing in NFTs is to judge whether the project has a business model—whether it can truly make money.

If a project is backed by a real business model, you can consider holding it long-term, but be mentally prepared—projects like that need time to develop. If not, then it’s only suitable for short-term speculation: within half a year. Never hold it long-term, because the project team’s goal is to quickly take a cut and then run. My advice is to check the official website, Telegram, Discord, and other communities to see what people are discussing. The more you look, the more you’ll naturally be able to recognize what’s real. Also, be sure to check whether the contract has any signs of minting or scams—if it does, just stay far away.

As for trading platforms, the main ones are now Blur, Opensea, and X2Y2. Blur focuses on artwork quality and doesn’t charge trading fees, but its liquidity is generally only average. Opensea is the oldest and most established; it has more users and higher trading volume, but the drawback is that the fees are relatively high. X2Y2 is decentralized, and offers better privacy protection, but like many new platforms, it has limited users and limited liquidity. Choose based on your own needs.

Finally, let me point out a few important pitfalls. The first is the liquidity issue—buying an NFT isn’t always easy to sell, especially for non-blue-chip projects, where there may be nobody willing to take it off your hands. The second is blind-box risk: many fake projects can show up at the right moment. For example, Cool Cat’s counterfeit version has trapped quite a few people. Make sure to verify the contract address through official channels. The third is wallet security—don’t casually grant signing authorization to third-party websites, and don’t easily use NFTFi products either. Once your assets are transferred away, you’ll never be able to get them back. After all this, I think I’ve made it clear what an NFT is—the key is to stay rational and not let FOMO cloud your judgment.