The Quick Guide to Buying NFTs (Tokens, Arts, Collectibles)
You’ve heard everyone talking about how much money you might make from non-fungible tokens (NFTs), and you’re wondering whether it’s worth it.
Like all investment opportunities, NFTs are not without risk. There are pros and cons to investing in these digital assets, but more importantly, this article will explain where and how you can buy them.
Let’s begin with the big question you should ask yourself before you invest in non-fungible tokens (NFTs).
Are NFTs a good investment?
Digital assets that aren’t fungible are non-fungible tokens. NFTs are best thought of as digital collectibles if you’ve ever owned a collectible before. Among the examples are art, in-game items, historical objects, music albums, and virtual representations of real-world assets such as real estate.
Over $40 billion of NFTs were bought and sold in 2021, according to some estimates.
Is there a catch?
You are the only person who can ever own any piece of NFT that you purchase, since these tokens are unique and can easily be verified on the blockchain. A single NFT cannot belong to more than one person.
A NFT isn’t directly exchangeable for a bitcoin or any other cryptocurrency. In the event that there is another buyer willing to pay and wants the same item, a price tag for each asset may allow you to sell it to someone for a higher price.
Another reason to buy a NFT is an emotional attachment to the item or the issuer. Fans could, for example, purchase NFTs of pictures and albums sold by their favourite artists and athletes. In this case, keeping the item in the collection is more important than reselling it.
So, either you want to acquire an item that you consider valuable or you want to resell NFTs, you probably should invest in them. NFTs may not be for you if none of these make sense to you.
Where to buy NFTs?
With the explosion of non-fiat currencies, there are a variety of online applications that you can use to purchase these items. There are no traditional cryptocurrency exchanges such as Coinbase, Binance, or any other that lists it.
Instead, sellers can list their items on open and decentralised marketplaces. There are open marketplaces in the sense that you only need a crypto wallet on your computer or smartphone to buy and sell.
Most often, the seller fixes the price of the item while interested buyers bid on it. By sending the payment directly to the seller, the highest bidder is able to trigger the transfer of the token to the buyer.
Places You Can Buy NFTs
The largest NFT marketplace today is OpenSea.io. A variety of categories are offered, including trading cards, collectibles, utility cards, virtual words, sports cards, and more.
Since everything on the platform is priced in ETH, the platform is built on the Ethereum network. To be able to trade assets and pay transaction fees, creators and buyers must spend ETH.
As with crypto tracking websites, OpenSea lists top-selling NFTs, daily and weekly volumes, average prices, owners, and the number of assets.
The company claims to be the first community-owned NFT marketplace. Rarible differs from other platforms, which require creators to meet specific criteria or pay royalties to list their items.
The platform allows anyone to create and sell products, provided they find buyers. Artists can add art, images, short video clips, and other creative elements to their NFTs or collectables on Rarible. Each NFT is priced in ETH.
Unlike other platforms, Rarible offers a project governance token called RARI.
Another NFT platform that focuses on art is Super Rare. Rare art pieces are listed on Super Rare and made available to buyers via limited-time auctions. A number of tags are used to categorize items such as surreal, colour, 3D, illustration, space, abstract, etc.
The most expensive item is priced in Ethereum ETH, and the highest bidder claims the token by signing a transfer contract to transfer the ETH to the artist. Once the contract is activated, the NFT is transferred to the wallet’s address.
A marketplace for buying NFTs was launched by Nifty Gateway in 2018. Gemini, one of the world’s leading cryptocurrency companies, co-owns the platform.
Nifty Gateway is known for its fixed-priced limited-edition artwork and paintings. Market data provides information on the resale and appreciation values of non-financial instruments in the collection.
Even so, buyers can use cash to pay for items listed on the Nifty gateway, even though the art is exchanged on the blockchain. After confirmation, the token will be transferred to their Nifty account or blockchain address.
A step-by-step guide to buying NFT art
- Create an Ethereum wallet, such as Ether Wallet or Metamask. Install a wallet native to the project’s blockchain if the token you want to purchase is not on the Ethereum network. (See this Metamask setup guide for details).
- Go to your NFT marketplace of choice. SuperRare is the marketplace used here because it is focused on rare art pieces.
- Connect your wallet by clicking the Sign Up button.
- Give a username and email address after you approve the signature transaction.
- Select an art piece from the collection by clicking on Market.
- To buy it now or to make an offer, click on the art.
- Please enter the amount you wish to bid and approve the transaction.
- You will not be able to withdraw ETH until your bid has been approved as the winning bid. When you click Proceed to Payment, the trade is settled if the item has a fixed price.
- View the item you purchased by going to My Items.
When you buy a NFT, how can you be sure it’s genuine?
It is easy to verify that the item you purchase is genuine since NFTs are on the blockchain and the items are digital goods. Purchases are identified by a transaction hash, which contains the creator’s address, that of the buyer, and the address of bidders.
It is possible to trace NFTs that have been resold several times back to their original creator with tools like Etherscan or native blockchain explorers.
Frequently Asked Questions
Is it possible to make money with NFTs?
Collectibles, including NFT art, are bought for emotional reasons. Quite simply, people buy them because they feel good after purchasing them. Thus, most buyers do not resell what they buy, and whoever issued the item keeps the money they received.
NFTs can be lucrative for artists and influencers who have loyal audiences willing to buy their tokens. It is also possible to investigate and purchase certain NFTs that may become increasingly valuable in the future. Then you can resell them for a profit.
Is there a connection between NFTs and coins?
In short, yes. In spite of the lack of direct exchangeability, some blockchain projects have native tokens or coins tying them to their platforms.
This is why buying these coins could be seen as a way to bet on the future of the industry. A few of the coins in this category are Enjin (ENJ), Decentraland (MANA), Rarible (RARI), and Chiliz (CHZ).
The market for traditional collectibles will probably be affected by non-fungible tokens (NFTs).
Several types of NFT are discussed in this article, including tokens, artwork, and collectibles. This article also answered frequently asked questions about this emerging market area of cryptocurrency and blockchain technology.
It would be a good idea for every prospective investor to spend some time understanding the NFT landscape before investing. The only way to avoid losing money is to do your research carefully. There is a lot of money to be made and lost.
Categories NFT Guide