In the crypto sphere, Non-Fungible Tokens (NFTs) represent a blockchain cryptographic asset representing an intangible and one-of-a-kind digital item such as artwork or an in-game reward. Every NFT is unique, limited-edition, and non-transferable. As such, it can represent proof of authenticity and ownership.
So, what exactly do you need to start trading NFTs?
The process you must go through to buy and sell NFTs is pretty much the same on most marketplaces. However, we offer a general guide. However, it is essential to note that specific platforms may have some additional steps.
Why Buy NFTs?
There are many underlying reasons why people are buying NFTs. The most primal of the reasons is that they want to invest in a new, speculative, and very volatile asset. Additionally, the market for NFTs has since exploded, and with collections such as Crypto Punks and the Bored Ape Yacht Club, the market has skyrocketed.
Apart from the option of taking NFTs as a way of a future valuation, most investors are on NFTs as a form of digital art. The world is constantly moving towards a digital future where many online interactions and time is spent.
Additionally, the concept of a metaverse seems to crouch in every day. As such, most people are moving to own scarce, verifiable, authentic digital art.
Others may want to own an NFT as a gift offering to others they know.
How to Buy an NFT
Whether you are looking forward to purchasing art, music, game items, or collectibles, the process, in most cases, is the same.
Step 1: Choose an NFT Marketplace
As the first step, you may want to select an NFT marketplace that appeals to you the most. While most marketplaces are similar, some offer exclusive NFTs and deals you cannot find anywhere else. Some even exclusively focus on NFT art. Besides, some can take up gaming NFTs, which include land, avatars, wearables, and other in-game items.
As a way of helping you find the most suitable marketplace for you, here is a list of the most popular.
- Opensea– It is the most popular NFT marketplace by far. You can find assets that range from artwork to trading cards and gaming tokens.
- LooksRare– the platform is mainly for those who want to avoid high fees.
- Rarible– It is identifiable as a very community-centric NFT marketplace. It allows users to explore thousands of non-fungible tokens and keep track of drops.
Step 2: Choose and Set Up a Crypto Wallet
For any purchase on NFTs, you must have crypto and a place to store and manage your crypto.
This is where a crypto wallet comes into play. Crypto wallets allow you to send, receive, and spend cryptocurrencies. You need a crypto wallet to buy and sell NFTs or purchase crypto.
Different wallets work on different blockchains. Additionally, not all marketplaces support all wallets. As such, the wallet choice largely depends on such factors.
There is a sample of wallets supported by most marketplaces, which include;
As soon as you choose the crypto wallet you want to use, you will need to set it up. The process may be slightly different for each wallet. As such, you may be required to follow each wallet’s instructions. As a recommendation, use two-step verification to make your account more secure. You may also get a recovery phrase meant to recover your account.
Once you set up the wallet, add currency to it. You need to check which currency or currencies the preferred marketplace uses and choose based on that.
Go to your account on your chosen NFT marketplace and add your wallet.
Step 3: Browse NFTs
Once you have installed the wallet, you can check out the NFT collections available in the chosen marketplace. Let us take the OpenSea Marketplace as an example. First, you may need to find the NFT you want to acquire. Go to your OpenSea profile and click on “Explore.” You will then see thousands of NFT collections available.
Step 4: Found Something You Want? Buy Now or Make an Offer.
When you find something you like, you can buy it directly or make an offer. Some NFTs on different platforms may have the option of placing a bid to make an offer to the owner to acquire the item. If you locate such NFTs, view the number of offers already placed to know how much you can bid.
On OpenSea, for instance, bids must be at least 5% higher than the previous one.
Step 5: Make the Purchase
As soon as you locate an NFT you want to buy, go ahead and make the transaction. However, it is crucial to note that some NFTs do not have a fixed price. If that is the case, you may need to bid for that token.
Hit “Buy Now” to proceed to checkout. You will be able to see the details of the NFT, including their name, respective collection, subtotal, and total. Click on Confirm Checkout.
The marketplace will then load up your wallet, where you will see the details of your purchase. Such info includes the estimated gas fees and the time to process the transaction.
Once ready to buy, hit confirm and wait until your purchase is processed.
What if You Want to Sell Your NFT?
If you want to sell an NFT, the initial steps are the same as buying them. For instance, on Opensea, you can select the “sell” Button at the top right bar, and you will be redirected to a new page to fill in the conditions of the sale.
You can choose whether to sell it at a fixed price or a timed auction and the expiration date for sale. Listing is free, but OpenSea charges 2.5% of each sale.
When one purchases your NFT, the funds will be transferred to your wallet. Keep in mind that most marketplaces charge a small transaction fee.
Although the process may seem complicated, buying and selling NFTs is fast and straightforward. Ensure you fully understand all the potential benefits and risks of trading NFTs.