An NFT, or non-fungible token, is a digital asset that represents ownership or proof of authenticity of a unique item or piece of content, such as artwork, music, videos, or tweets. NFTs use blockchain technology to verify their ownership and authenticity, and they are often bought and sold using cryptocurrency. In this article, we will provide you with all information to buy your first NFT.
There are two options available to start your NFTs journey. Either buy and sell existing NFTs or manufacture and distribute your own NFTs. Today, we are talking about the first option that will help you buy an NFT.
From local currency to cryptocurrency
The most popular platform for buying NFT is OpenSea. It uses Ethereum for the majority of transactions. This means you need a cryptocurrency wallet.
The Coinbase wallet is a safe choice frequently used by beginners. Once the wallet is configured and activated, it becomes possible to convert a local currency into Ethereum.
Then it is a matter of creating an account at OpenSea and linking the newly acquired cryptocurrency wallet to it.
All that’s left to do is check out the listings and buy the NFT you want.
The sales process
In the world of NFT, sales can take different forms.
Some NFTs are sold at a specific price. If so, a “buy now” option is highlighted. Other sales are by auction. This means that there is competition between potential buyers. Finally, some sellers prefer to accept individual offers and in this case, the buyer only has to indicate the amount he wants. OpenSea charges a commission percentage on the purchase amount.
What precautions to take?
NFTs are similar to other investments and you may think twice if you want to put all your money in the same basket. Keep in mind to diversify your portfolio to manage your risk. Rather than acquiring a single big project, it’s more about multiplying small investments and letting them cover each other.
In addition, as with any investment, it must be ensured that the source of said investment is reliable. Scams have already taken place in the field of NFTs, which is why it is very important to research and buy only from trusted markets.
Finally, it is necessary to determine how much it is possible to invest in this market. As with any other asset, prices can fluctuate widely. It is important to remember that the cheapest option is not necessarily the best, but rather the one that represents the best value for money.
The risks of buying an NFT
Like any investment, there are risks. However, by researching and buying only from reputable sources, the risks should be relatively low.
One of the biggest risks is related to the novelty of NFTs. This is still a relatively new and untested technology.
Another risk is price fluctuation. It is possible to invest a sum greater than the actual price of the NFT and never recover this investment.
However, as technology and the market mature, these risks should diminish.
FAQs
Where can I buy NFTs?
The most popular option is OpenSea. Other options such as the Waves platform, EOSIO blockchains, and the Counterparty protocol are also possible.
There are many NFT platforms where you can buy a particular digital asset using Blockchain technology. Some of the most popular include:
- OpenSea
- Rarible
- Axie market
- NBA Top Shot Market
- Larva Labs/CryptoPunks
- SuperRare
- Nifty Gateway
- Foundation
- Theta Drop
What kind of NFT to buy?
There are many types of NFTs on the market and each has advantages as well as disadvantages. Here are some factors to consider when choosing an NFT:
The purpose or usefulness of the NFT: what will you use it for? For example, if the goal is to use an NFT as a digital asset or store of value, choose one that has a good reputation and track record.
The price of NFT: The prices of NFTs can vary widely, so it is important to know the budget allocated to NFTs before you start buying them.
NFT liquidity: how easy is it to sell or trade? If you plan to hold an NFT for the long term, liquidity may not be a major concern. However, if you ever plan to sell or trade your NFT, you need to make sure it’s easy to do so.
Is NFT a good investment?
Some believe that NFTs in the form of digital art are a good investment because they are unique and rare and therefore can increase in value over time. Others believe that NFTs are a bad investment because they are often overvalued and their value is largely based on speculation. Whether they think NFTs are a good investment or not is up to each individual.
What are the most popular NFTs?
The most common NFTs are those associated with well-known brands or franchises. Popular NFTs include the NBA Top Shot online marketplace – for basketball highlights, and Decentraland, a virtual world where users can buy, sell or trade virtual goods.
Here are some of the most popular digital collectibles:
What’s the Price?
It can range from pennies to millions of dollars. To buy an NFT, you must use a cryptocurrency exchange that offers it. Note that the most popular exchanges that offer NFTs are currently Binance and Coinbase.
How to buy or sell NFT on Binance?
Since June 2021, Binance NFT has become one of the most widely used curated NFT markets in the world, bringing together collectors, artists, gamers, and others on a single platform.
Buying an NFT – to be considered an investment?
It depends on various factors, such as the marketability of the NFT, the planned holding period, and personal goals.
If you plan to buy an NFT with the intention of reselling it at a higher price, you can consider it an investment. On the other hand, if you buy an NFT simply to take advantage of the associated digital asset, you cannot consider it an investment.
That said, buying an NFT can be a fun and exciting way to support favorite artists or get unique digital assets
Conclusion
It is not necessary to start immediately. It is important to get used to the marketplaces and to do your own due diligence on each platform. Most of the information is available online. Also, it is worth using common sense to avoid being caught in another “get rich quick” scheme which is fairly common in the world of NFTs.
If a project seems interesting, then it is possible to contact the creators. Starting conversations with other collectors can also help to better understand the market. The NFT market is new and attractive. Before any investment, it is important to do a lot of research and learn from those who are already part of the market.
Do you want to know more? Explore our other Cryptocurrency articles
Are you interested in selling an NFT? In this case, we recommend you to read the article – How to Sell an NFT – An Easy Guide.
Shall you want to explore your banking options related to cryptocurrency and start your NFT journey, do not hesitate to book a free consultation with our friendly team.
Disclaimer
Widelia and its affiliates do not provide tax, investment, legal or accounting advice. Material on this page has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, investment, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Please consult https://widelia.com/disclaimer/ for more information.
