Non Fungible Tokens- NFTs- are digital assets with unique characteristics that can be minted, bought, and sold on a Marketplace. As a non-fungible digital item, every NFT minted is different from others.
Let’s say a friend borrows a dollar and spends it. When they return a different dollar note to the lender, it replaces the dollar they borrowed earlier. The same thing happens for cryptocurrencies. This type of asset is termed fungible because they can be exchanged for one another.
In the case of Non-Fungible digital assets, one NFT can’t be exchanged for another NFT because they are unique. An NFT can be a piece of art, song, illustration, movie, book, brand loyalty package and much more. As long as an item can be turned into digital data, it may be tokenized into an NFT.
Steps To Take
Buying your first NFT is an exhilarating experience, as it opens you up to a world of opportunities. It is not as daunting a task as many people think. This article will discuss the steps to take when purchasing an NFT.
1. Decide on what to buy
At the moment, the NFT space is filled with innovations that cut across different fields. There are NFT projects that are churning out their unique NFTs which unlock different features to holders. Some Marketplaces allow potential buyers to view different art pieces, listen to songs, and peruse book collections that have been tokenized into NFTs.
What do you want to buy? If no particular direction is chosen, you may end up being confused about what to purchase. What is the aim of purchasing the NFT? As always, do your research on the NFT and what it offers before a purchase. For example, you can look at NFT collection rankings in Opensea.
2. Choose and fund a crypto wallet
A crypto wallet holds the crypto holdings of a person. Before anyone can purchase an NFT in a marketplace, they need a functional crypto wallet. Some Marketplaces work with a select few wallets like Metamask and Phantom. Ethereum based Marketplaces prefer Metamask, while Solana based Marketplaces support Phantom wallet.
If the NFT marketplace supports Ethereum and Polygon networks, then Metamask may be the best bet.
Marketplaces tend to disclose the crypto wallets that they support. Create the designated crypto wallet and fund it with the supported coins accepted for the exchange. While funding the wallet, ensure that it has the necessary amount to pay for both the price of the NFT and gas fees. Currently, the Ethereum network is known for having high gas fees. You can use the Ethereum Gas Station to see prices in real-time.
3. Search for the NFT you want
OpenSea is a notable NFT marketplace that allows users to mint, buy, and sell their NFTs with little or no experience. It supports a myriad of diverse NFTs, from images to songs. Popular creators tend to mint and publish their content for sale on OpenSea because of its popularity and tools. Some of the NFTs in the popular Bored Ape Yacht Club collection are available for sale on this marketplace. For those that are looking for an Ethereum based NFT, they may find it for sale on OpenSea.
Another popular NFT marketplace is Solanart, and it caters to NFTs minted on the Solana chain. Though it is fairly new compared to OpenSea, it is offering similar services to those that want to mint, buy and sell NFTs on the Solana network. It can be likened to the OpenSea of the Solana NFT space, hosting the likes of Kajiu Cards, SolAnimals, SolPunks and much more.
4. Buying the NFT
Once you have decided on the NFT that you want to purchase, it is crucial to check the type of sale it is. Is it being sold at a fixed price determined by the creator or is it a bid/auction? Some creators fix the price of their NFTs while others auction them out for a duration.
Once you have done the aforementioned steps, it is easy to purchase the NFT that you have handpicked.
Firstly, create an account in the marketplace by connecting the supported wallet to it. Metamask and Phantom may be used for OpenSea and Solanart respectively.
Secondly, click on the ‘Buy Now’s option if you are certain about buying the NFT. It will disclose the details concerning the order.
Thirdly, sign the transaction in your wallet.
Finally, wait as the transaction is verified and completed.
Note that once a purchase has been made, it can’t be reversed. It is important that you are certain about the transaction before initiating it.
We teach strategies to buy and sell NFTs for profit in our Cryptostreet Bootcamp, an on demand crypto trading course.
Buying your first NFT is not as difficult as many may think. The difficult part may be deciding on the NFT that you want because of the numerous opportunities available in the space. For Ethereum based NFTs, the OpenSea marketplace is the right choice, while Solanart ticks the boxes for Solana based NFTs.
Bulls on Crypto Street is a trading education website dedicated to digital assets such as Bitcoin, Ethereum, DeFi, NFTs, and other new advancements in the Metaverse.