Heard people talking about buying NFTs but don’t really know how you can do it? In this blog we will simply explain how to go about it.
A Simple Way To Purchase An Nft
NFT stands for Non-Fungible Token. It is a unique asset on the blockchain tied to a digital or physical asset. To buy NFTs you’ll need to choose a crypto exchange, open or purchase a crypto wallet and fund it with Ethereum. That’s because most NFTs can be sourced on the Ethereum blockchain. Connect your wallet to an NFT marketplace and start shopping!
Choosing A Crypto Exchange
The process for buying NFTs begins the same way as it does for buying cryptocurrency. You’ll need to use a crypto exchange. The same rules apply, read reviews and choose carefully weighing up:
Security – if you leave those investments on the exchange and they are hacked, you stand to lose them.
Safety – pick an exchange that allows you to transfer your investments to a “cold wallet” for safest storage.
Fees – these can vary greatly from one exchange although in terms of security, the old adage “you get what you pay for” generally applies.
Coins – you’ll need to buy Ethereum which is traded on nearly all crypto exchanges but it is worthwhile checking.
There are hundreds of crypto exchanges from which to choose. Some of the biggest based on daily volume are:
- Huobi Global
Open a Crypto Wallet
Crypto wallets don’t actually store your coins and tokens, they only keep safe your private keys which allow you to access your crypto. An NFT is one form of token. There are two types of wallets, hot and cold. If you haven’t already bought a cold wallet or other form of cold storage, you’ll need to use a hot wallet which many exchanges offer for free. A hot wallet is more convenient to use but more vulnerable to cyber attacks. A cold wallet is recommended for better safekeeping of your crypto and NFTs. It is a hardware device similar to a USB which keeps your private keys offline. Purchasing directly from the manufacturer is advised to guard against tampering. It is also worth ensuring that any cold wallet is compatible with the Ethereum blockchain.
You’ll find most NFTs available on the Ethereum blockchain hence you’ll need to purchase its native currency, Ether (ETH). Be aware that this blockchain has high network usage and associated gas fees which are the cost of processing transactions made, including purchasing an NFT. As a guide, you can check the price of gas at any time using browser extensions such as ETH Gas Station. What you’ll pay is a product of the cost of the gas and the speed with which you require the transaction.
Transfer Ethereum To Your Wallet
If you are just using a hot wallet, this is a straightforward process online. If you are using a cold wallet, you will need to link it to the NFT marketplace via a hot wallet such as MetaMask or Coinbase Wallet. You can then transfer your NFT purchase to your cold wallet.
Understanding NFT Marketplaces
There are three main types of NFT marketplaces and if you’re serious about buying, you’ll need to create accounts and subscribe to all three so you don’t miss any drops.
Open marketplaces – anyone can buy, sell or mint NFTs here. Minting is the process of creating a unique crypto asset (NFT) from a digital work.
Closed marketplaces – exclusive domains where trading is restricted and artists must apply to have new NFTs minted.
Proprietary marketplaces – NFTs that are trademarked and copyrighted by companies operating them.
Which NFT Marketplace To Choose
There are many NFT marketplaces that all operate in slightly different ways, specializing in various niches.
Some of the biggest are:
OpenSea – the biggest and most diverse NFT marketplace covering sport, music, art, games, fashion and collectibles. It is also very user-friendly.
Rarible – a smaller version of OpenSea but with a wide range of NFTs and its own governance token ($RARI), allowing owners to contribute to the future direction of the project.
Nifty Gateway – known for its exclusive collections in fine art, video and animation artists. Attracts buyers with a wide variety of NFT drops.
SuperRare – leans towards unique artwork not dissimilar to a more traditional art auction house and has close relationships with well-known artists.
Mineable – offers traditional and gasless minting in an effort to keep prices down.
NBA Top Shot – converts NBA highlight reels into NFTs. Has a huge following and is easy to use.
Foundation – offers digital art and video NFTs. Creates exclusivity by requiring users to be invited to the platform by another member.
Buying Your NFT
Now you’ve selected your marketplace, you need to open an account and connect your wallet. Some marketplaces allow you to set up a new wallet from inside their platform or use their own proprietary wallet which may offer reduced gas fees or other discounts. If you are waiting for an NFT drop, ensure your wallet is connected and funded well ahead of time otherwise you may miss your opportunity. You can either “Buy Now” or “Make an offer” below the asking price when considering a purchase. Be aware marketplaces charge their own commissions.
Don’t Get Scammed
NFT markets are still very much an emerging and evolving industry and there are still many pitfalls for would-be investors. Take all the common sense precautions you can to keep your cryptocurrency and your NFTs safe. That means transferring your investment to a cold wallet for safe keeping, using two-factor authentication. It also means being on the lookout for scams that are common to the environment such as:
Phishing scams – any fake links or pop-ups on social media promising new NFT drops, designed to deceive you or gain access to your wallet.
Catfishing scams – celebrity impersonators or scammers gaining access to celebrity accounts, pointing up fake marketplaces or NFT drops.
Pump and dump scams – Influencers create hype around an NFT collection, raising its price, before dumping it for a handsome profit, leaving the remaining investors with a worthless token.
Counterfeit NFTs – as it sounds, NFTs falsely sold as the work of someone else’s.
Want To Know More About Purchasing NFTS?
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