How to Buy NFTs: Five Steps for the New Investor was written by Rebecca Holcomb and originally appeared on Wealth of Geeks. It has been republished with permission. Please note that contributing opinions are that of the author. They are not always in strict alignment with our own opinions.
If you're thinking about how to buy NFTs or investing considerably in the non-fungible token market, you're certainly not alone. Even celebrities are cashing in on the NFT marketplace by purchasing and creating their own NFTs.
Inside Bitcoins reports that celebrities like Mark Cuban, Paris Hilton, and Lindsay Lohan have invested in the NFT sector by creating one-of-a-kind NFTs for fans and collectors alike to purchase. And that's one unique aspect of non-fungible tokens; they are a one-of-a-kind purchase and, therefore, can be highly pricey depending on the original creator.
Buying an NFT can be risky, and going into the investment sector with your eyes wide open is essential to purchasing NFTs worth the money you're spending. As one man found out, they can quickly turn from an investment to an expensive failed purchase if you don't have enough knowledge on how to buy NFTs. With that in mind, here are five steps to help you purchase your first NFT without the added stress.
Step One: Cryptocurrency
The first step you need to take before purchasing an NFT is to find a reliable and popular cryptocurrency and buy some. Along with this, you also need to have a secure cryptocurrency wallet to hold your crypto purchase.
According to Alexander Kap, the co-founder, and CEO of Kaplink, Coinbase and Binance both offer great options for purchasing and securing your favorite cryptocurrency using your bank account. If you are wondering how to buy ethereum with credit card, that is an option as well, though you will likely pay higher fees that way.
Step Two: Choose an NFT Marketplace
You want a trustworthy, secure site to buy your first NFT. Choosing an NFT marketplace is your next step and one of the most important. Decrypt says these top three sites will make purchasing your first NFT super easy.
- OpenSea – this hugely popular NFT marketplace is top shelf, so much so that according to Tokenizedhq, 65% of their traffic is direct, meaning it doesn't come from a search engine.
- Axie Marketplace – This NFT-fueled video game is host to the second-largest marketplace for non-fungible tokens. They trade solely in Axies, which are adorable-Pokémon style digital pets. These unique NFTs allow you to create new pets by breeding ones you already own. These new pets can then be sold to others on the platform. However, one downside to this platform is that it is quite complicated. You'll need some patience as you'll need to maneuver several qualifications before you can begin to play the game. But if you're a gamer into NFTs, there's no better place to combine two loveable assets.
- Crypto Punks/Larva Labs – Development studio Larva Labs created CryptoPunks in 2017 on the Ethereum Blockchain. When the NFT market blew up in 2021, CryptoPunks NFTs skyrocketed in price along with the NFT market, which reached a massive 2.5 billion in sale volume within the first six months.
These marketplaces aren't the only way to get your hands on NFTs, but if you're looking for something specific, it will cost you a pretty crypto-penny.
Step Three: Check and Double-Check
Sadly, working in the digital world means that what you purchase can sometimes be hijacked. According to Alexander Kap, losing digital currency is far easier than it might seem. So when you are buying your Etherium, double and triple-check the addresses you're sending it to.
Each marketplace may have its own ETH wallet, and therefore, you may send ETH to several wallets before purchasing your first NFT. These transactions can easily cause you to lose your ETH coins, so be cautious.
Step Four: Find Your NFT
Purchasing an NFT can be a fun and simple process if you've done it before. But it can also be a bit overwhelming if it's your first time. Knowing which NFT you'd like to purchase can significantly reduce the stress of finalizing the transaction. So, how do you choose?
- Money – The first item to tick off your list is your budget. Not everyone can drop $2 million on an NFT, and even those who can want to think twice about what NFTs their purchasing, especially if their goal is to resell them.
- Pick One or Ten – Once you have your price range in mind, you'll need to distinguish what sort of NFT you'd like to purchase and from whom. Celebrities often have NFTs that pertain to their famous status. For instance, Mark Cuban sells NFTs associated with his Mavericks basketball team. “You can sell anything digital using NFTs. We can sell virtual Mavs gear, sneakers, art, pictures, videos, experiences, and anything our imagination can come up with we can sell. We are looking at adding virtual jewelry, accessories, and clothing that we create to real pictures on social media. So you can add cool Mavs virtual sneakers that look as real as the ones on your feet to your posts.”
- OpenSea has features that help you dwindle their selection of 19.6 million different NFTs for purchase at this writing.
- Always research a bit about the author of your NFT and explore whether the one you've chosen has any unlockable content or additional features. And, of course, it's always good to know how rare your NFT of choice is. This will significantly affect the price you end up paying.
Step Five: This is It!
Purchasing your first NFT is a milestone you'll likely remember. It isn't to be taken lightly, and it can get confusing. Once you've purchased your ETH, you'll need to find a wallet interface supported by the NFT site where you're buying your NFT.
On Open Sea, for instance, theirs a wallet icon in the top right corner where you can browse all the digital wallets Open Sea can interact with. One major one that isn't shown is Ledger Nano X. However, if you've stored your cryptocurrency in Ledger, you can connect your Ledger wallet with one like Meta Mask and have both the security of Ledger and the interface of Meta Mask.
The Future of NFTs
NFTs have become more than just something to buy in the last couple of years. They can be an investment – or a collector's item like bitcoin.
Everyone wants to get their hands on NFTs. They're the ‘it' product to purchase. Whether you're a collector and want a specifically commissioned piece or are trying to find a unique gift for someone special, NFTs have grown to enchant the world.
As Paris Hilton said, “It's been so exciting to see the digital art world evolve and become more prominent with the rise of the NFT marketplace. I am so happy to be involved with the Sevens Foundation, which helps emerging artists get into the NFT space. There is beauty and strength in the female perspective, and that should be celebrated!”
On April 28th, 2022, Hilton was one of 1500+ artists to participate in the NFT Liverpool event that culminated artists, both big and small, from around the world in NFT space.
“I see NFTs, or non-fungible tokens, as the future of the creator economy. They use blockchain technology to help creators increase the value of their work and share it with fans in real-time…In addition to new funding opportunities, NFTs help lesser-known artists distribute their work more widely and with better financial terms. Hence, they get to keep a majority of the revenue. NFTs put more power in the hands of the creators, and that's something I'm proud to be part of,” enthused Hilton on her website.
Finding ways for creators to make and keep more of their earnings is essential for the NFT marketplace to thrive. And so far, thrive it has. From massive creators like Mark Cuban and Paris Hilton to unknown artists who've yet to create their first NFT, Web3 is exploding at an exceptional rate. It's going to be massive. Ready to become a part of it?