Whitelists in Crypto

NFTs had their first big hype in 2021 and it seems like their growth can not be stopped. Many people want to “mint“ them, meaning signing up on a whitelist and getting their wallet (address) pre-approved for this task (with a specific time and date). It is basically an early access event in the crypto space. This article will explain how it works exactly. But first it should be clear what NFTs actually are.

What is a NFT?

The word NFT is short for „Non Fungible Token“. First of all we need to clarify the term “token“. A cryptocurrency that is operating on an existing blockchain is called a “token“. A cryptocurrency that has its own Blockchain is a “coin“. Therefore, Bitcoin is a coin for example, as its Blockchain is running on its own. Then there are cryptocurrencies like Loopring for example, which operate on the Ethereum Blockchain, therefore they are tokens. If you have traded NFTs before, you would know how you pay a specific cryptocurrency for it, most likely ETH or SOL. That is because these NFTs are simply Tokens on the Ethereum or Solana Blockchain (Or other platforms), but there is a key difference between these types of tokens and regular ones.

That is where the term „Non fungible“ comes in. A token can be both fungible (exchangeable) and non-fungible (non-exchangeable). Basically, “non-exchangeable” in this regard simply means that it is a unique digital asset that cannot be exchanged one-for-one for another. Maybe you have heard of the mis-stamping/printing of coins or banknotes before. Basically, they are still normal FIAT currencies. However, due to their uniqueness thanks to their factory flaw, they are much rarer and valuable. A collector will not value a normal $100 bill the same way as a $100 bill with factory flaws, most of the time they are truly unique. The normal bill is therefore “fungible“ as it can be replaced 1:1 by another $100 bill, the misprinted one can not. To be honest, it is kind of wrong to compare FIAT currencies to cryptocurrencies, but hopefully you understood the comparison more easily that way.

A more correct comparison would be Bitcoin: 1 Bitcoin will always equal 1 Bitcoin. There are no rarer or one of a kind Bitcoins that are more valuable. NFTs are unique assets that have been brought onto the blockchain, mostly drawings, digital art, music or video clips.

The NFT whitelist – your ticket to success

Since so many people are getting interested in NFTs, creators found a fair way to select whoever gets the right to mint new NFTs. But what is minting? It is simply the process of digital files (pictures or videos for example) getting tokenized on the blockchain. The digital file turns into a unique Non-Fungible Token (NFT), which is stored on the blockchain. The term whitelist comes from the technology space and means something like “allowed list“. In the NFT world, you have to imagine a whitelist like a guest list for a club, where only the people on the list are allowed to enter, but at the same time who gets in the club is randomly selected in the end. Playing the lottery to enter the exclusive party so to say. Many people really want to get on a whitelist, since new NFTs can be minted for a fair price. To make profit trading NFTs, you of course want to buy at the lowest price possible. By randomly selecting who gets a chance through a raffle, the creators avoid spam and give everyone a fair chance of getting their favorite NFT. Keep in mind that whitelists have a lot of benefits, but also come with some problems.

Problems with a whitelist

Keep in mind that it is not set in stone that you can buy a NFT when you get selected. Chances are that everything will be sold out before you get a chance to buy. Also, with so many people trying to mint the NFTs, they all go for the fastest way: By increasing the amount of gas fees that they are willing to spend. As you may know, transitions on a blockchain get processed faster if you are willing to spend more on the transaction. Depending on the transaction size this can get quite expensive. Also, joining whitelists and engaging with the communities to get better chances of being selected can be really time consuming. At the end of the day, nobody also knows if the returns are guaranteed. New people can also easily get scammed. Beware of messages with unsolicited offers or scam links.

Joining a whitelist in three steps

Finding a project (before launch)

Find good projects before they launch. It helps here if you are well connected into the NFT space to always know the newest and best opportunities on the market.

Join the community

Mostly Discord, but also on Twitter.

Apply

Fill out the form or in other words, join the whitelist.

If you are one of the lucky winners (and fast), you can mint the NFT of your choice. It also helps if you stay engaged with the community.

Benefits

Besides earning the right to mint the NFT, selected people also get other benefits like exclusive content or a special NFT for being early on top. Sometimes there are also real life parties/exclusive events being held by the community where only people with the NFT can join.

On the other hand, if you are a creator, whitelists have a lot of benefits. A whitelist boosts your social media presence, therefore creating more hype around the project. Depending on how hyped it gets, the whitelist will spread like a wildfire among the NFT community. Last but not least, you are giving the community a fair chance of getting their NFT, while also preventing GAS wars and spam.