- If you have purchased an NFT on OpenSea, you know that the process of buying NFTs is not the most consumer-friendly. In fact, if you’ve never done it before, you probably will need to watch some YouTube video explaining the steps involved.
- First, you need to get or buy some ETH cryptocurrency unless you’re lucky enough to have some already.
- Second, you need to set up a hot wallet such as Metamask to deposit your ETH and use that hot wallet to set up an account on OpenSea (or other NFT platform, such as LooksRare). And, if you are using a crypto exchange using dollars to buy the crypto, you may face wait times of 6 days to 10 days before you can even withdraw your ETH. Yeah, could be almost 2 weeks–far from frictionless payment system!
- Third, when you are ready to make your purchase of an NFT, you will see a hidden expense called “gas fees” to complete the purchase (paying the person who mines the transaction on blockchain). On OpenSea, gas fees can be several hundred dollars even if you don’t like gas!
- OK, now just imagine your non-techie family and friends buying an NFT. Right. No chance.
- Enter Coinbase. It’s developing an NFT platform to compete with OpenSea and just announced you won’t need to use cryptocurrency at all. You can use a MasterCard credit card! Hoila.
- Coinbase explained on its blog:
- “Our mission at Coinbase is to increase economic freedom in the world. By enabling more people to join the creator economy and profit from their work, NFTs (Non-Fungible Tokens) have an important role to play in this mission. However, the experience of purchasing an NFT remains complex for many users.
- “Coinbase wants to simplify the user experience to allow more people to join the NFTs community. Just as we helped millions of people access Bitcoin for the first time in an easy and trusted way, we want to do the same for NFTs.
- “That’s why we’re working with Mastercard to classify NFTs as “digital goods”, allowing a broader group of consumers to purchase NFTs. And, coming soon we’ll “unlock” a new way to pay using Mastercard cards.”
- Of course, allowing consumers to use credit cards to buy NFTs, which can be hundreds of thousands of dollars in price (some even millions of dollars) presents risks of its own. People might be charging beyond their budget and rack up credit card debt! Of course, that’s not good. We will have to see what limits Coinbase and Mastercard put into place to avoid this problem.