How to buy NFT (Tokens, Art, Collectibles)
Nearly every crypto influencer or investor you know is talking about how much money could be made from non-fungible tokens (NFTs), and you suddenly wonder if you should buy NFT.
Well, Like every other investment opportunity, NFTs have risk and reward potential. This article explores the merits and demerits of investing in these digital assets and, more importantly, shows you where and how to buy NFTs.
First, let’s tackle the big question you should ask yourself before putting any money into non-fungible tokens (NFTs).
Should you invest in NFTs?
What are They?
Non-fungible tokens are a new kind of digital asset. If you know what collectables are or have owned one in the past, it’s best to think of NFTs as digital collectables. It could be a piece of art, an in-game item, an object with historical value, a music album, or a digital representation of a real-world asset such as real estate.
According to Nonfungible.com, roughly $386 million worth of NFTs has been sold.
What’s the Catch?
The catch is that you’re the only one who will ever own any piece of NFT that you purchase, as these tokens are unique and easily verifiable on the blockchain. No two people can own one NFT.
Unlike Bitcoin or other cryptocurrencies, NFTs aren’t directly exchangeable for each other. However, a price tag for each asset means you may eventually get the chance to sell it to someone at a higher price if anyone else is willing to pay and wants the same item.
Additionally, one can buy an NFT because they have an emotional attachment to the item or its issuer. For instance, fans could buy NFTs of pictures and albums sold by their favourite artists and athletes. The objective is not to resell but to keep the item in their collection.
In summary, you probably should invest in NFTs either because of their resale value or because you want to acquire an item you consider precious. If none of these makes sense to you, then NFTs may not be for you.
Where can you buy NFTs?
Thanks to the explosion of NFTs, there are numerous web applications where you can buy these digital items. And no, you can’t find it on Coinbase, Binance or any traditional cryptocurrency exchanges.
Instead, there are open and decentralised marketplaces where sellers create and list their items. These marketplaces are open in the sense that the only thing you need to buy and sell is a crypto wallet installed on your computer or mobile phone.
What typically happens is that the seller fixes the item’s price while interested buyers bid for it. The highest bidder gets the item and sends the payment directly to the seller, thus triggering the token’s transfer to the buyer.
Where to Buy NFTs
OpenSea is inarguably the largest NFT marketplace right now. You find different categories of items, including trading cards, collectables, utility, domain names, virtual words, sports NFTs and many more.
The platform is built on the Ethereum network; hence all assets are priced in ETH. Creators and buyers must also spend ETH to pay for transaction fees and the assets they want to trade.
Like crypto tracking websites, OpenSea maintains a ranking of the top-selling NFTs, daily and weekly volume, average price, owners, and the number of assets.
Nifty Gateway launched in 2018 and provided a marketplace for buying NFTs. The platform is co-owned by a leading cryptocurrency company, Gemini.
Nifty Gateway primarily features limited-edition arts and paintings with fixed prices. The marketplace provides data on the resale and appreciation value of NFTs in the collection.
However, although the art being exchanged lives on the blockchain, buyers can use cash to pay for items listed on the Nifty gateway. The token will then be transferred to their blockchain address or Nifty account after confirmation.
Super Rare is another art-focused NFT platform. Artists list rare art pieces on Super Rare and distribute them to interested buyers via a limited-time auction. The platform categorises items using tags such as surreal, 3D, animation, abstract, illustration, space, colour, etc.
The items are priced in Ethereum ETH, and the highest bidder claims the token by signing a transaction confirming the transfer of ETH to the artist. The contract then triggers the transfer of the NFT to the wallet’s address.
Rarible claims to be the first community-owned NFT marketplace. Unlike the platforms mentioned earlier, where creators must meet specific criteria or pay royalties to list their items, Rarible is community-driven.
Anyone can create and on the platform, as long as they find someone to buy from them. NFTs or collectables on Rarible are priced in ETH and can include art, images, short video clips, and other innovative materials issued by creators.
Uniquely, Rarible has a project governance token called RARI earned from active participation on the platform.
How to buy NFT art (A step-by-step guide)
- Create an Ethereum Wallet, e.g. Metamask or Ether Wallet. If the token you want to purchase is not on the Ethereum network, then install a wallet native to the project’s blockchain. (See Metamask setup guide)
- Visit your preferred NFT marketplace. This guide uses SuperRare because it focuses on rare art pieces.
- Click the Sign Up Button and accept the prompt to connect your wallet.
- Approve the signature transaction, and provide a username and email address.
- Click Market and browse through the art collection to find one that you like.
- Select the art and Make an Offer or buy now.
- Enter your bid amount and approve the transaction.
- Your ETH will be locked until your bid is approved as the highest. If the item has a fixed price, then the trade is settled when you click Proceed to Payment.
- Go to My Items to view the purchased item.
How do you know your NFT is authentic?
Since NFTs live on the blockchain and the items being exchanged are digital goods, it is easy to verify that the item you purchase is authentic. Each purchase has a transaction hash, including the address of the token’s creator and that of bidders and the eventual buyer.
Using tools like Etherscan.io or other native blockchain explorers, one can even trace NFTs that have been resold severally back to the original creator’s address.
Can I Make Money with NFTs?
A primary reason why people buy NFT art or any collectable is that they have an emotional attachment to the item. Put simply; they buy it because of how it makes them feel. Most buyers, thus, do not resell the items they purchase and the issuer of the keeps the money.
However, you can make money with NFTs if you’re an artist or influencer and have a loyal audience willing to buy your tokens. Also, you can research and purchase certain NFTs that could become more valuable in the future. This way, you make money when you resell them.
Are There Coins Related to NFTs?
Yes. Even though NFTs are not directly exchangeable, some blockchain projects have native tokens or coins tied to their platform.
Hence, buying these coins may also represent a way of betting on the future of the industry. Some related coins include Enjin (ENJ), Decentraland (MANA), Rarible (RARI), Chiliz (CHZ).
Non-fungible tokens (NFTs) have come to stay and will probably grab their share from the existing market for traditional collectables.
This article explained where and how to buy NFT, such as tokens, arts and collectables. It also answered frequently asked questions about this emerging corner of the crypto and blockchain economy.
Each prospective investor would be better off taking some time to understand the NFT landscape before putting money on the table. There is a lot of money to be made and lost, and ‘careful research’ is the only antidote to avoid ending up on the losing side.