How to buy NFTs? A step-by-step guide
You cannot go three pages deep into the internet without coming across at least one relevant mention of NFTs. NFTs or non-fungible tokens are more than mere buzzwords today. Anything from digital artwork, music, videos, collectibles, or in-game assets can be turned into NFTs. They show great promise as investments. Of course, you can buy NFTs, but you can also create and sell NFTs with the help of Appy Pie.
However, for the itching investor in you, here is a detailed guide on how to purchase NFT.
How to buy NFTs?
Most of the NFT trading or transactions happen on NFT marketplaces. Though the NFT marketplaces are not so easy to navigate through, the process isn’t rocket science either. Here’s the answer to your question – how to invest in NFT?
- Set up a wallet
Before buying NFT, you need to acquire cryptocurrency like Ethereum, Bitcoin, etc. To purchase and use any cryptocurrency, you need to have a crypto wallet. MetaMask is the most popular crypto wallet and is easy to set up! Your digital wallet is the place where you can send or receive cryptocurrency and store your funds to purchase your crypto apps and services. It becomes easier to buy NFTs after you have set up your digital wallet. Once you start buying NFTs and start building a collection, you can also store them in your digital wallet.
- Pick an NFT marketplace
The next critical step is choosing an NFT marketplace to buy your NFT. There are several top NFT marketplaces like OpenSea, Rarible, Soalnart, etc., from which you can consider buying NFTs. Most marketplaces sell various NFTs like digital art, music, videos, sports memorabilia, in-game assets, etc.
Which one do you think is the best place to buy nfts? Let me know in the comments section.
The best part is that you can also build your own NFT marketplace with Appy Pie without any coding!
- Connect your wallet to the marketplace
Now that you have set up your digital wallet and decided which marketplace you want to buy your NFT from, it is time to connect the two. It is imperative to connect your wallet with the marketplace to complete the purchase of your desired NFTs successfully. One important point to remember here is your money, NFTs, and data security.
- Choose the NFT you want to buy
There are two different ways to go about this, and each has its merits. One way is to do your research and go for an NFT that is on the verge of going viral, on its way to popularity, or is quite rare. This approach is focused on ensuring that you gain a handsome return on your NFT investment. The other approach is to buy NFT art that you really like. This approach focuses on building a collection that you would be proud to possess. In this approach, should your NFT fail to appreciate in value, you would still be happy with your purchase!
Which approach would you prefer to follow while choosing the best NFT to buy? Let me know in the comments section.
- Place your bid
Once you decide which NFT you would like to buy, you can now place your bid. Though most NFTs are sold through auctions on NFT marketplaces like OpenSea, Rarible, etc., you may come across some that are available for a fixed price. In such cases, you can simply pay the asking price and get your NFT. The sellers usually provide details of the auction, including the auction time, selling price, cryptocurrency, wallet details, etc., so that you can complete the transaction once the purchase is made.
- Complete the transaction
Suppose you win the auction by making the highest bid at the closing of the auction, and your bid is higher than the reserve price set by the seller. In that case, the NFT marketplace will automatically close the auction in your favor and complete the transaction immediately. However, the seller may accept your offer in some rare cases, even before the auction closes.
What NFT stocks should you buy in 2022?
There is another way to invest in NFTs if you are not convinced about buying an NFT. You can consider investing in NFT stocks.
Currently, there are no pureplay NFT stocks active in the market. Hence, investing in NFT stocks today means buying shares in companies involved in other business lines. Here is a list of the top ten NFT stocks to buy:
- Lucky Block
Why should I buy an NFT?
Yes, there is a lot of buzz and hoopla around NFTs and how to purchase NFT. However, before you dive in head first, I suggest that you take a moment, distance yourself from all the drama, and ask yourself – should you invest in NFTs?
The unique thing about NFT investing is that the NFTs are not exactly assets themselves. NFTs use blockchain technology to signify ownership in the digital realm. Would you buy the proof of ownership simply because it was converted into an NFT?
Well, yes and no! You would not simply go and spend millions of dollars on proof of ownership. However, if you see an attractive asset, digital or otherwise, and the ownership of the asset is in the form of an NFT, you get double the benefit.
However, there are some well-established risks to NFT investing that you should know about. Let’s discuss the pros and cons of investing in NFTs.
Pros of investing in NFTs
There are a number of reasons why investors are leaning toward NFT investments. Let’s discuss.
- Accessible to everyone
Anyone across the globe can invest in NFTs. The ownership of any asset, when tokenized, gains mobility. Transferring such ownership from point A to point B becomes a cakewalk! This is one of the most significant points in the ‘Pro’ column.
- Enjoys the security of blockchain
As the NFT tokens use blockchain technology, they also enjoy the security of the said technology, which is particularly strong. Additionally, blockchain technology offers inherent transparency that further makes the investor’s ownership of the asset more secure.
- Foot in the door to blockchain technology
As an investor, when you divert a portion of your investments towards NFTs, you get to explore the burgeoning blockchain space. Not only does it give you a first-hand understanding of this popular technology, but it also helps you earn significant ROI (considering how things are going currently).
Cons of investing in NFTs
Though we are all talking about NFTs, we are not so naive as to believe there is no downside. There are some valid reasons why some investors are wary enough to steer clear of it altogether. Let’s list out the cons.
- NFTs are technically not an asset
Most people think of them as assets, but NFTs are actually a digital way to represent ownership of an asset, digital or physical. A majority of the audiences, including investors, are grossly misinformed about NFTs, which often makes the NFT market volatile and inflated. That’s enough to send a cautious investor away.
- NFTs consume an alarming amount of energy
The majority of the NFTs today are supported by the very popular Ethereum blockchain, which unfortunately uses a highly energy-intensive protocol – ‘proof of work’ for NFT generation. The electricity consumed by a single transaction is equivalent to the electricity consumed by an average American household in a day and a half.
- Most NFTs can only be purchased with ETH
Most NFTs are sold on the Ethereum blockchain, which has its own cryptocurrency – ETH. If you wish to use the US dollar or any other traditional currency to buy NFTs, you will have minimal options. Hence, if you want to invest in any promising NFTs, you are forced to buy ETH.
Now that you know how you can buy NFTs, what are you waiting for? Head to one of the top NFT marketplaces and start exploring. Or! Build your own marketplace right now!
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