Non-fungible tokens (NFT) are all over the news right now. NFTs include digital assets like digital artwork, music, videos, collectibles, or in-game assets that are unique and irreplaceable and fast becoming sought after as collectibles. These digital assets have seen growth in trading through the use of cryptocurrencies such as Bitcoin or Ethereum. Most users buy NFTs on dedicated marketplaces, similar to how they might buy cryptocurrencies. There are millions of Non-Fungible Tokens in the various NFT marketplaces and if one or two catch your eye and if the price is right, why not put in a bid or buy it? Do you want to know how to buy an NFT? If you do, there is a process that involves several steps, and here is how you can get started.
Here is another resource on how to Sell an NFT.
Why You Should Buy NFTs
The rising popularity of Non-Fungible Tokens stems from their nature as digital assets that include identifying information about their owners, which is recorded in smart contracts. This specific information ensures that each NFT is unique and irreplaceable by any other token, making it easily verifiable and traceable back to its original issuer, akin to having certificates of originality. For NFT owners, the value of these tokens is derived from their scarcity, similar to that of fine art in the physical world, and they also hold the potential for appreciation over time. Additionally, owners can program NFTs to generate royalties for themselves. In summary, NFTs offer:
- Scarcity: Their scarcity defines the value of the NFT and has the potential to appreciate in value over time.
- Collectability: like baseball cards, art, and antiques NFTs are popular digital collectibles offering a unique niche for collectors.
- Provide utility: Certain types of NFTs offer utility, including in-game items like avatars, weapons, and trinkets, as well as virtual real estate.
- Investment: NFTs are the craze in the digital economy offering money-making opportunities when they get traded.
Exactly How to Buy an NFT
Though the NFT market is still quite new, purchasing your first digital collectible is not difficult. Below, you’ll find our step-by-step guide on how to buy an nft.
1. Set Up a Crypto wallet
For you to buy an NFT you will need to first purchase some cryptocurrency and link it to your funded cryptocurrency wallet. You can buy cryptocurrencies like Bitcoin and Dogecoin Ethereum from the Ethereum blockchain. Essentially, your digital wallet is the place where you can keep your cryptocurrency, a place to send or receive it, and your funds to purchase crypto apps and services. Once you set up and funded your digital wallet then it becomes an easy process to buy an NFT. Later on, when you’ve collected some NFTs, they will be stored inside your metamask wallet or digital wallet. There are several digital wallets out there, such as the Coinbase wallet, the Ethereum network, and others.
2. Choose an NFT Marketplace
Once you have established your digital wallet, you’ll need to choose an NFT marketplace to purchase your NFTs. Several leading NFT marketplaces, such as OpenSea, Rarible, Mintable, Axie Marketplace, and NBA Top Shot Marketplace, offer a variety of NFTs. These marketplaces typically sell digital art, music, collectibles, virtual assets, in-game items, and more. Additionally, most marketplaces facilitate the process for users to create, sell, and buy NFTs with ease. However, before you begin making purchases, it is essential to conduct thorough research and educate yourself on how to buy an nft while avoiding potential scams.
3. Connect Your Digital Wallet to the Marketplace
Once you choose your NFT marketplace, you will then need to link it to your cryptocurrency wallet to the marketplace on which you decide to make the NFT purchase. OpenSea is considered the largest peer-to-peer NFT marketplace out there, allowing users to interact with and exchange NFTs from numerous different marketplaces and blockchains. Once you’ve set up and connected with a marketplace to buy, sell, and trade NFTs.
4. Find an NFT You Like
In the catalog of items being offered for sale in the marketplace of your choice, choose the NFT that appeals to you. Remember, for your NFT purchase to attract higher prices in the future, you will need to choose ones that are popular, are going viral, and are rare. Another tip is to find collections early on, which is preferably rare and would increase the chances that you could make a great return out of it.
5. Place a Bid
Once you have chosen the NFT you want, you can begin the purchasing process by either placing a bid or agreeing to the seller’s asking price. NFT sellers will share important information with potential buyers regarding the buying process, such as the NFT’s selling price, the auction time limit, and which cryptocurrencies they will accept. On the NFT’s page, click the Make Offer button and enter the amount of cryptocurrency you wish to bid.
6. Complete the Transaction
If your offer for the NFT is the highest when the auction ends and your offer is greater than or equal to the reserve price, then the NFT marketplace will automatically complete the transaction. In some cases, the seller can opt to can accept your offer anytime, regardless of when the auction is scheduled to end.
The fact that an NFT can only have one owner at any given time means that you have purchased the exclusive ownership of a particular digital asset. You can hold on to the NFT until it fetches a price that can gain you a profit or save it as part of your unique personal collection.
Buying an NFT Tips
The best way to decide on a marketplace is to consider the following:
Deciding the type of NFT you are looking for: Not all NFTs are created equal; some are highly sought while others are popular among niche markets. The purchase of your NFT will be determined based on what you seek to do with it. Is it for your personal needs as a collector or fan? Or do you want to make money over it when its price appreciates?
What fees are charged by the NFT marketplace: NFT marketplaces typically impose commissions and ‘gas prices’ (the computational costs required to execute transactions). These fees can differ significantly between marketplaces, so it’s essential to ensure that the marketplace you select does not impose excessively high transaction fees.
User-friendly marketplace: if you are a newbie to buying NFTs make sure that the procedures and user interface are easy to follow and are not complicated to ease your buying experience.
Secure marketplace: Scams can be prevalent in the digital economy. Make sure that the marketplace you choose to buy your NFT from ensures that your data is protected and the NFTs you buy are secure.
How do you know what NFT to buy?
Depending on the purpose of your purchase will determine what kind of NFT you would want to buy. If you are a collector or fan, you can opt to buy memorabilia, sporting cards, digital artworks, and more that are aligned with your passion. If you are looking towards investing in NFTs look for NFTs that stand to fetch good prices in the future. The best bet is to go based on popularity, hype, going viral, rarity, and others to get good returns in investments.
Can you resell an NFT?
Yes, you can buy or resell an NFT on the secondary, just like any item you own. In fact, the big part of NFTs appeals is to create a unique marketplace where items can be exchanged with little fanfare. For you to resell your NFT, you will need to make sure your NFT is in the crypto wallet paired with the marketplace in question and put it up for sale.
Why do people buy digital art NFT?
Trading in digital art like NFT is all the craze, ownership fueling a new era of the digital economy. NFTs have helped create a market for digital art where users can securely create an NFT, store it, buy it, sell it, and collect it. In addition, NFT blockchains help NFT creators track all transactions after their initial sale, allowing for perpetual royalty paybacks and helping them get a steady flow of revenues. Finding the right NFT project for your long-term investment portfolio is not easy and will require careful planning. How to make money with NFT can be easy; use these three simple rules to guide you through your NFT journey: find the NFT you like; do your own research; never spend more money than you can afford to lose.
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This article, “How to Buy an NFT” was first published on Small Business Trends
