How to buy NFTs; a complete beginners guide
Everyone is excited about NFTs these days. If you are a beginner and want to invest in NFTs, this article is for you. In the market, you will listen to all sorts of discussions, some saying buying NFT is a big risk while some advocate investing money in it. However, the best thing is to listen to all the suggestions and thoroughly research whether it is a good investment. However, before going further, let us know about this term NFT.
What are NFTs?
Non-fungible tokens (NFTs) are blockchain-held tokens representing unique pieces of art (physical or digital assets).
NFTs, give you digital ownership over any artwork that you create. NFT collectibles are unique virtual products, while NFT avatars are digital portraits, usually featuring animated or pixelated characters. Avatars are generated algorithmically in order to give each NFT unique identifiable traits, like particular hairstyles, glasses, mustaches, or even laser eyes.
How to buy NFTs?
Select the NFT of your choice:
The first step is to buy an NFT of your choice. Each NFT is unique and part of a limited set.
To see what is available, you can browse NFT marketplaces such as OpenSea, Rarible, or Axie Marketplace. In most NFT marketplaces, NFTs can only be bought with cryptocurrency. So, keep the cryptocurrency requirement in mind while planning to buy an NFT.
Open an exchange account and crypto wallet:
If you don’t have a crypto exchange account, then open one. The next step is to own a cryptocurrency wallet. Buy a crypto wallet of your choice, as there are hot and cold wallets in the market where you can keep the cryptocurrency required to buy the NFT. Remember that not every cryptocurrency is compatible with every wallet. Select a digital wallet that is compatible with the cryptocurrency needed to buy your chosen NFT.
Fund your crypto wallet with digital currency:
The next step is to fund your digital wallet to purchase the cryptocurrency by using fiat money, like U.S. dollars. Since the leading NFT marketplaces usually use Ether, it would be better if you buy Ethereum.
Connecting your wallet to an NFT marketplace:
When your digital wallet is created and funded, you can connect your wallet to the NFT marketplace. Once connected, you should be able to view your wallet’s available crypto balance for buying one or more NFTs.
Purchase an NFT:
Once you are ready, click the buy button to buy an NFT.
NFTs can have a fixed, predetermined price, or you might need to bid for them to purchase an asset.
If you are using ETH for the purchase, you have to pay a “gas” fee for the Ethereum network to process the transaction. The fee varies depending on network congestion on the Ethereum platform.
Confirm the transfer of NFT to your crypto wallet:
After you have clicked the buy button, you have become the official owner of an NFT. Blockchain transactions can’t be reversed or canceled, so the NFT belongs to you until to sell or trade it.
Make sure that the transfer of the NFT to your wallet is confirmed and verified by the blockchain network supporting the NFT. The transfer of the NFT is only complete if you get the confirmation and proper verification is done.
NFTs are no guarantee that you’ll become wealthy overnight:
Investing in NFTs is never a guarantee that you will become rich or get higher returns. While some NFTs have given astronomical returns to investors, they can also result in losses or become worthless sometimes.
Should people invest in NFTs?
As a new asset class NFTs are considered very risky. One part of the risk of making an investment in NFTs also carries the risk of investing in cryptocurrencies. As we know, the crypto market is very volatile, the value of cryptocurrency could fall drastically because of regulations or unfavorable market conditions.
If you have bought NFT for Ether, and the price of Ether falls by 50%, there are chances that the value of your NFT could also go down by 50% or more. It can thus result in you losing your entire investment in NFTs.
NFTs can be a profitable investment, but not for everyone. If you are not good with technical know-how and like stable & low-volatility investments, then NFTs are probably not meant for you.
You should invest in NFTs only if you are ready to bear losses.
What are the different types of artwork on NFTs?
The NFT marketplace is changing continuously and will evolve further. Different art pieces on NFTs include digital art, Music, Digital collectibles, Sports highlights, Video games, Photography, Fashion, Trading cards, Event tickets, Domain names, Memes, NFTs with utility, Real estate, avatars, etc.