- NFTs are kept on a blockchain, usually Ethereum, which means that most NFTs can only be bought with Ethereum
- A non fungible token is a digital file which can carry anything from art to video to music
- The vast majority of NFTs are available on the Ethereum platform, which means the user will need to purchase Ethereum’s native token, Ether (ETH) before purchasing any NFT
One of the things that prevent many people from getting involved with cryptocurrency and NFTs is the intimidation factor.
By now, most people have heard of Non Fungible Tokens or NFTs. While the Covid lockdown period has forced people’s worlds to become more insular, their view of the digital world has expanded to include cryptocurrency and, in 2021 especially, NFTs.
But how does one go about purchasing an NFT?
Let’s break it down.
What Is an NFT?
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A non fungible token is a digital file which can carry anything from art to video to music. These digital files are often collectables and have a monetary value.
NFTs are kept on a blockchain, usually Ethereum, which means that most NFTs can only be bought with Ethereum.
The idea that NFTs put forth is digital ownership. This may be a foreign concept to many who’ve been raised in the material world. In that world, money is exchanged for things one can physically hold in their hands.
How to Buy an NFT?
However, a new generation is being raised who value digital ownership. Why? Because it is an indicator of social status.
If you are wondering to yourself, “How can something so trivial, hold such social and monetary value?”, consider this: cash is merely bits of paper or plastic with faces printed on it. The value of something is whatever we all agree it holds. NFTs are no different.
How Do I Buy an NFT?
- Purchase Ethereum-based Wallet
NFTs are purchased from NFT markets but to access these markets, you’ll first need an Ethereum based wallet. MetaMask is an example of one such wallet. This can be downloaded from the App Store or via chrome extension.
- Purchase Ether
The vast majority of NFTs are available on the Ethereum platform, which means the user will need to purchase Ethereum’s native token, Ether (ETH) before purchasing any NFTs.
Ethereum can be purchased on almost any exchange from Binance or eToro to Coinbase.
Transfer Ether to wallet.
- Choose an NFT Marketplace
There are several NFT marketplaces. Each marketplace sell different type of NFT.
For example, OpenSea is a marketplace for NFTs which operates on Ethereum and hosts a variety of digital collectibles, from video game items to digital artwork.
Using OpenSea, users can interact with the network to exchange NFTs for cryptocurrency.
Each user’s Ethereum wallet (MetaMask) address acts as a passport and lets users interact with certain platforms like OpenSea. Once the wallet had been connected, users can begin browsing the market and placing bids.
Other popular NFT marketplace’s include, SuperRare, Nifty Gateway and NBA Top Shot.
- Purchase NFT
Most marketplaces hold auctions where users can submit a bid for an NFT they wish to purchase.
Buying an NFT from the primary marketplace increases potential resale value directly after the product goes on sale. A high demand NFT will sell for many their initial price immediately after the release.
On the other hand, one of the main issues with buying an NFT from a primary marketplace is it’s hard to estimate the demand for the art. On the secondary marketplace, however, users are able compare purchases to previous sales.
The NFT Outlook
As previously mentioned, 2021 has been a marvellous year for an NFTs. From CryptPunks to the Bald Ape Yacht Club, various artists have found a way to sell their art utilising this new medium.
Previously, it’s been difficult to verify the authenticity of a digital artwork. NFTs clear that problem up.
Moreover, if the demand for collectable art continues - and there’s no reason it shouldn’t - NFTs will continue to carry value.
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