Over the past year, the NFT market has seen continuous growth with no end in sight, and some of the notable NFT projects driving this growth include CryptoPunks, Pudgy Penguins, Bored Ape Yacht Club, and Doodles. NFTs have also expanded into the mainstream, with more celebrities and prominent brands buying NFTs and creating their own digital projects. Besides, you must have heard about the artist Beeple who sold his art as an NFT for over $60 million.
However, despite the success of NFTs, many people still have no clue about what they are and how to buy them. If you are an NFT newbie and want to learn how to buy your first NFT, you are in the right place. This guide will discuss the marketplaces and the steps to buy NFTS. So, let’s get right to it.
How to Buy NFTs
Buying NFTs has never been easier as there are multiple NFT marketplaces available. However, there are distinct steps you have to follow if you want to buy NFTs successfully, and we have outlined them below.
Buy Ethereum from a cryptocurrency exchange
You need Ethereum to buy NFTs, as most of them are Ethereum-based, and several marketplaces only accept ETH tokens as payment. If you don’t already have an account with any cryptocurrency exchange, there are different options like Binance, Coinbase, Kraken, or eToro. Even though Ethereum is the native currency, not all NFT marketplaces accept them. Some alternatives to Ethereum include Flow, Solana, and Tezos.
Get a cryptocurrency wallet
The next step after purchasing Ethereum is to get a cryptocurrency wallet, and since we are discussing ETH-based NFTs, it is best to get a wallet compatible with this token. There are different crypto wallets in the market, with the most popular being MetaMask. MetaMask comes as a browser extension for Chrome, Edge, Brave, and Firefox that allows users to access different NFT marketplaces easily. Other cryptocurrency wallets you can get include Trust Wallet, AlphaWallet, Math Wallet, Coinbase Wallet, and Enjin Wallet, to name a few. You need to sign up on any of these wallets to start using them.
Send Ethereum to the wallet
After setting up your crypto wallet, the next thing to do is send Ethereum from your exchange account to the wallet. You can forgo this step if you want to buy an NFT directly on your exchange account. Some cryptocurrency wallets like MetaMask also allow you to buy Ethereum directly, which involves higher fees than exchanges.
Sending Ethereum from your exchange to your wallet is easy, as it involves entering the amount you want to send as well as the wallet address. Besides, you need to copy your wallet address first before moving to the exchange platform to send the Ethereum. Cryptocurrency wallets generate this Ethereum public address automatically when you set up your wallet, and you can create as many addresses as you like.
Sync wallet with NFT Marketplace
You can find numerous NFTs to buy and sell on NFT marketplaces, with OpenSea being the most popular and mainstream marketplace to date. Signing up to NFT marketplaces involves syncing your wallet, and it is a very seamless process. For OpenSea, click on the wallet icon on the top-right corner of the website, and it will show you a list of supported cryptocurrency wallets. Choose the wallet of your choice and click next to create your profile automatically. Once you’ve done this, you are ready to buy your first NFT.
Once you have set up your wallet and signed up for an NFT marketplace, it’s time for you to browse the different NFT collections and decide on what to buy. Depending on the marketplace you are using, you’ll either see a Buy Now”, “Make Offer”, or “Place Bid” option, with the latter meaning you can only purchase the NFT by bidding. It is also essential that you have enough Ethereum on your cryptocurrency wallet before attempting to buy or make an offer.
When you buy an NFT at a fixed price, you’ll need to pay transaction fees, known as gas fees, and the costs fluctuate. Most wallets like MetaMask give you an estimate of the gas fees depending on the network conditions at that time of the day. On the other hand, if you make an offer for an NFT and the seller accepts, the seller will have to pay the gas fee. The last step to take is to confirm the transaction on your cryptocurrency wallet, and then you’ll get ownership rights of the NFT. A significant benefit of purchasing an NFT from the primary marketplace is the potential of the resale value to increase after the release.
Get a Hardware Wallet (Optional)
If you buy an expensive NFT, you should consider getting a hardware wallet for security purposes. Hardware wallets reduce the risk of hacks and ensure maximum security, and you can link your software wallet to your hardware wallet. A ledger is a type of hardware wallet that stores multiple NFT tokens, and it is best to invest in one if you’ll be investing large amounts of money into NFTs. Besides, a Ledge Nano goes for about $60 – an affordable price to pay for the security of your digital assets.
What is an NFT?
NFTs, non-fungible tokens, are blockchain-based digital tokens representing unique and non-interchangeable items stored on a blockchain. These tokens have digital signatures that represent the title of ownership of digital assets like video files, images, music, and more. Just as the name shows, NFTs are not fungible, meaning that you cannot exchange them for an identical item. Besides, NFTs do not represent the items themselves, but they indicate the location of the assets on the blockchain.
Because of how decentralisation works, NFTs are immutable records that no one can change. When you mint NFTs on any marketplace, this establishes a record of ownership that will be transferred when these NFTs are bought. A public ledger stores the record of ownership of these assets so everyone can view the certificate of ownership. Thus, making it easy for artists to authenticate their work. Additionally, you should not mistake NFTs for NFT tokens that are fungible and interchangeable with other tokens.
Types of NFTs
You can buy different types of NFTs, from music to digital art and real-life items. So, let’s look at some of the most tradable types of NFTs, shall we?
Digital art NFTs
Digital art is one of the most popular NFT types, and it can be in the form of images, gifs, videos, and more. Typically, they are divided into profile pictures (PFPs), original pieces, photography, and generative art. Some common examples of PFPs are the Bored Apes, Crypto Punks, Cool cats, and Pudgy penguins. Also, generative art is distinct art created by an algorithm, and a typical example of these types of NFTs are Art Blocks.
Digital artists also create original and one-off art pieces, which they mint as NFTs. A notable example would be the multiple works of Beeple. Photography NFTs are also a type of digital art where photographers sell their photographs as NFTs, and this NFT type has gotten a lot of attention in recent times.
Music NFTs are a distinct type of NFT as blockchain technology enables artists to digitise their audio files and music as NFTs. Artists no longer need record labels as they can develop their platform to sell their music as NFTs. Many artists are taking advantage of this opportunity, like Kings of Leon and Grimes, who have released their music as NFTs.
There are different blockchain-based games like Axie Infinity, Decentraland, and Sandbox, where users can purchase in-game items like characters, real estate, skins, and others as NFTs. You can buy, trade, and earn with these in-game items. For example, real estate purchased in Decentraland can appreciate value, and owners can earn revenue from rental income and sale income.
Sports collectibles are digitised sports trading cards that replay different highlights, meaning that you can own moments in sports history. NBA Top Shot is one of the popular NFT marketplaces selling trading cards of memorable NBA moments.
Pros and Cons of NFTS
Even though the NFT market is continuously thriving, it still holds some risks. So let’s take a look at some pros and cons of NFTs.
- NFTs make it easy for creators to sell digital media online
- You can use the blockchain to verify the authenticity and ownership of artworks and digital assets
- NFTs give artists creative freedom
- NFTs can shed light on less known artists and creative
- Gas fees can be very expensive, especially for Ethereum-backed NFTs and marketplaces
- Making NFTs are energy-intensive as Ethereum has a high carbon footprint
- Some NFTs prized at high prices may not hold their value in the long term
- NFT buyers and sellers are at risk of hacking if they don’t store their NFTs safely
NFT Marketplaces to buy NFTs From
Now that we’ve discussed what NFTs are and how to buy NFTs, let’s look at some of the top marketplaces you can buy them from.
OpenSea is one of the largest NFT marketplaces globally, and over one million global users use this platform. It operates on Ethereum and supports more than 150 payment tokens. You can buy different types of NFTs from art to games, sports collectibles, metaverses, domain names, memes, photography, and others. OpenSea supports different wallets like MetaMask, Coinbase, and Trust, and you can easily sign up on this platform by connecting your cryptocurrency wallet. Besides, creators can use this platform to create smart contracts for their digital assets.
Rarible is a community-owned platform built on the Ethereum blockchain, and it also supports Flow and Tezos blockchain. On this platform, you have to use its token, RARI, to buy and sell NFTs, and there are different types of NFTs you can buy, like music, art, videos, and art. Rarible supports different wallets, and you can use WalletConnect to sync the wallet of your choice. You can also buy your NFTs with your credit or debit cards, and this marketplace charges a 2.5% transaction fee to both buyers and sellers. Additionally, you can filter NFTs based on blockchain, price range, collection, and category.
SuperRare is an Ethereum-based marketplace that empowers creators to create and sell original versions of their artwork. This marketplace interface makes it easy to find artworks and supports different crypto wallets like MetaMask and Formatic. Focused on digital art, you can find all types of artworks like gifs, 3D paintings, and others. Also, they charge a 3% commission fee to buyers on primary and secondary sales.
This marketplace is the best to buy curated limited edition NFTs. Top artists and celebrities collaborate with this platform to create limited edition NFTs. You can buy NFTs using fiat currency, and you don’t need to connect your crypto wallet when using this platform. This is because of Nifty Gateway and Gemini host and store all the NFTs. Plus, collectors can resell their NFTs in the secondary marketplace.
NBA Top Shot Marketplace
This is a close marketplace that offers collectibles like digital trading cards featuring NBA video highlights. Built on the Flow blockchain, you can easily signup by linking your Google account to Dapper. You can buy NFTs from your favourite NBA players and own NFTs of some of the greatest NBA moments in history. Besides, you can use your credit card, debit card, or any crypto wallet to buy NFTs from this platform, and there is a buyer fee of 5.2632% of the purchase price for credit card transactions.
This is a decentralised VR marketplace where you can buy and sell digital real estate. Built on the Ethereum blockchain, this platform offers users a metaverse where they can do anything with their digital real estate. Land in this metaverse can appreciate value, and owners can earn income from their real estate NFTs. Plus, this platform stores all digital assets owned in this marketplace in an Ethereum-based contract.