How to buy NFT: Beginner’s Guide

NFT Overview

If you haven’t spent the last years in a forest cut off from the media, then you have probably come across the concept of NFT. If not, it’s amazing how you managed to avoid the hype around a new kind of art, which, often without conveying any depth of the artist’s thought, is sold for hundreds of thousands of dollars, and even several million. One such example is an NFT token with the first tweet in the history of Twitter, made by company founder Jack Dorsey, which was sold for almost 3 million euros. 

You cannot hang a work of NFT art on the wall of your living room to show off to your guests when the opportunity arises. In fact, you are buying not so much the work itself, as proof of ownership of it. And so, we have a definition of NFT or non-fungible token, which is a unique digital certificate which is stored on the blockchain. It guarantees the originality of the item and grants exclusive rights to it. As you might have guessed, this concept came from the world of cryptocurrency.

Each non-fungible token (NFT) is unique, which means that it cannot be discreetly replaced, making it a reliable system for securing rights to an object, whether it be a work of art, real estate, or an artifact in a computer game. As for crypto money, the situation is different there, because, for example, one Bitcoin can be easily replaced by another one, and nothing will change.

Unlike other major cryptocurrencies, NFTs cannot be bought directly with fiat money. Therefore, since most NFTs are based on the Ethereum blockchain, it is necessary to acquire the appropriate currency. See below for more details on how to diversify your portfolio with the currently popular NFTs.

How to Buy NFTs?

1. Buy Ethereum on a reliable crypto exchange like Coinbase or Godex.io.
2. Transfer your ETH coins from the exchange to your crypto wallet. If you don’t have one, you need to create it. Most often, for such purposes, users choose the Metamask wallet, which is suitable for both cryptocurrencies and non-fungible tokens. In addition, for greater security, it can be connected to a hardware wallet.
3. Connect your wallet to the marketplace of your choice. There are many places where NFTs can be purchased. Of course, it all depends on which NFTs you are interested in. There are sites where you can only find images, but in order to buy a different type of NFT, you need to go to another marketplace.

The largest “fair” with a variety of tokens can be found on OpenSea. To connect your wallet to OpenSea, go to the website, click on the icon in the top right corner and select “My profile”. You will be prompted to connect your wallet; to do this, follow the instructions given.

1. Buy your NFT

OpenSea has a name like that for a reason, you will find over 80 million NFTs there. Therefore, in order not to get confused and not drown, learn how to use a convenient search engine. 

On the landing page, select “Explore”. If you know what you are looking for, you can use the “search bar”. On the left side of the page, select: “Buy Now” or “On Auction”. You can also narrow your search using the options: time, price, views, etc. To view popular NFTs, select “Rankings”.

Choose the NFT you like and make sure you have extra ETH to cover the fees. Once you buy it, you will be able to access NFT through your crypto wallet.

How to invest in NFTs?

1. Decide on your goals and finances

Under the influence of the NFT hype, it is very easy to get excited and start mindlessly buying up the first digital assets that catch your eye. But if your goal is not to get rid of extra money in a fashionable way, this issue should be approached as carefully as possible. Take a look at your finances and think about how much you are really willing to spend. It is this amount, and not a penny more, that you can invest.

2. Become a cryptoexpert

You should never invest in something you don’t understand. By betting on NFTs, you are also betting on a currency that helps power the decentralized network that hosts it. For those who are not tech savvy, understanding the ins and outs of cryptocurrency should be the number one priority before even thinking about investing in NFTs.

Understanding how this technology works will inform you about each individual blockchain and cryptocurrency, helping you evaluate their strengths and weaknesses accordingly. Without such knowledge, you will not be able to distinguish between shiny coins with no future and promising ones.

3. Keep your investments safe

Decentralized networks like blockchain are actually much more secure than centralized servers and any other system that depends on trust and a third party. But you, as an individual user, are not safe. You may become a victim of phishing and other social engineering scams.

If you are going to invest real money in NFTs or cryptocurrencies, you need to make security your top-priority. To protect your funds in the long run, use a hardware wallet, never store NFTs or cryptocurrencies in any public address that is not exclusively yours.

4. Know what you are investing in

Here we repeat rule number 2, but in a slightly different area. If you’re into art, take a look at NFT art works. Firstly, you will be pleased to invest in something where your head lies. Secondly, you will be able to find something worthwhile, but which is not yet discovered by society, to see the potential of the aspiring artists, which has not yet been fully disclosed.

5. Keep your eyes peeled for the market

This goes without saying, and works not only in NFTs, but with absolutely all types of investments. It is necessary to keep abreast of what is happening in the blockchain industry in general, the cryptocurrency market and the NFT space in order to manage not only to invest profitably, but also to prevent failure.

Advantages and Disadvantages of Non-Fungible Tokens (NFTs)

Pros

• The ability to easily buy / sell unique items from anywhere in the world.
• Thanks to blockchain technology, NFT cannot be faked, which means that an investor can be 100% sure of its authenticity, and for artists, especially digital ones, this is an opportunity to prove the authorship of their works.
• NFTs can make collectibles more interactive and engaging.

Cons

• There are high risks of buying a speculative NFT item that has risen in price at the moment, but in fact has no real artistic or collectible value.
• When stored insecurely, NFT assets can be at risk of being hacked, just like other cryptocurrencies.
• The market for collectible NFT items is quite volatile, and it is quite difficult to predict the rise or fall in the price of a particular asset.
• NFT transactions consume a lot of energy and have an impact on the environment.

How to create NFTs?

You don’t have to be a genius to create your own NFT. Just follow three simple steps:

Step 1. Create a marketplace account

Let’s say it will be OpenSea. You need an Ethereum wallet to connect with it to the marketplace. If you don’t have a suitable wallet, create one (it might be the most common one – MetaMask) and fund it with ETH to pay fees and trade your NFTs.

Step 2. Create a new collection

After creating and verifying an account, you need to go to the “My collections” section and create a new one. Your NFT works will be minted in it.

Set up the parameters you need, namely a royalty percentage, a blockchain, payment method and other data.

Step 3. Create an NFT

Upload the file from which you want to make an NFT to the platform. It can be a picture, a music track, a video, a GIF, and so on. Make sure the platform supports the type and extension of your file. Come up with a title and description. Specify the number of copies in which the token is issued and click “Create”.

Top 5 NFTs to choose in 2022

In general, we have already figured out that it is best to invest in the area familiar to investors. Below are the most relevant and profitable investment assets:

1. NFT art investment

Perhaps the greatest benefit NFT has brought to the art industry, which is why it has taken root so well in this niche. By allowing artists to trade freely and without risk, NFT art is likely to always be in demand, and therefore a great investment. The key task is to be able to discern among the millions of NFTs potential masterpieces, the value of which may increase significantly in future.

1. NFT game investment

This type of NFT is the latest trend now. The play-to-earn concept has revolutionized the gaming industry. Therefore, if this is your thing, it might be worth considering investing in the upcoming NFT games that the gaming community is looking forward to.

1. NFT real estate investment

Another very extensive area in which you can prove yourself as a successful investor is real estate. And here NFT provides a solution to a rather complex problem that usually arises in the process of real estate trading – the transfer of ownership. By converting real estate legal documents into NFTs, it secures ownership of the asset and eliminates the need for intermediaries.

1. NFT marketing

Since NFT gains popularity and is introduced into completely different areas, NFT marketing, which is an effective tool in attracting users to a platform, can bring good profits in future.

1. NFT marketplace investment

The creation of multiple NFTs creates a need for platforms on which they can be traded. When investing in such a marketplace, you don’t have to worry about the lack of users, since there are a lot of people who want to create and sell their non-fungible tokens. The advantage of such an investment is a fairly quick profit, which is generated through various fees.

Future of Non-Fungible Tokens (NFTs)

Today, NFT technology has great potential and good prospects. On the one hand, the advantages of the technology, the current popularity of non-fungible tokens and the growth rate of the industry indicate a high interest from users. People’s consumption of digital content is growing daily, which can provide NFT art with a chance to develop in the future.

On the other hand, at the moment there are a number of issues in the industry: there is no legal regulation, the market structure and specific ways of implementing the technology are unclear. All this makes it impossible to accurately state the direction of further development of NFTs.

The possibility that the rapidly growing popularity of NFTs may fade as quickly as it appeared, and the NFT market may disappoint users, should not be dismissed.

It remains to be seen whether the technology will gain mass distribution or sink into oblivion.

FAQ

How do I buy NFT art?

To buy NFT art, you need to register on the marketplace that sells the works you are looking for. The largest and easiest to use marketplace is OpenSea. To create your account, connect your Ethereum wallet to the platform. 

You can make an instant purchase by clicking on the “Buy Now” button and confirming your readiness for the transaction, after which your NFT will go to your wallet. 

The second way is to make a purchase by placing a bid on the auction. To do this, click “Place bid” and then the “Make Offer” button. Next, you need to choose a currency, enter the amount of your offer, and also set a time frame for consideration.

Should you invest in NFTs?

Any investment involves risk, and NFTs are no exception. It can bring both profit and loss. Judging by the trend and the experience of other investors, NFTs can be a good investment choice. Most importantly, invest within your means.

Disclaimer: Please keep in mind that the content of this article is not financial or investing advice. The information provided is the author’s opinion only and should not be considered as direct recommendations for trading or investment. Any article reader or website visitor should consider multiple viewpoints and become familiar with all local regulations before cryptocurrency investment. We do not make any warranties about reliability and accuracy of this information.