20 Tips for Buying NFTs
20 Tips for Buying NFTs
Following the sale of digital art for millions, NFTs have taken off in popularity in recent weeks as covered over at runrex.com. But what are NFTs and how do you go about buying them? Well, through the following 20 tips, this article will look to highlight what NFTs are and how to buy, as well as some additional related information.
What are NFTs?
As articulated over at guttulus.com, NFTs are digital assets that use the technology behind cryptocurrencies to create unique tokens, each of its own identification, that isn’t replicable. These tokens serve as a digital deed or proof for ownership for original editions of online art, music, and memes.
Where can I buy an NFT?
If you want to create, sell, and buy an NFT, then you should head over to an NFT marketplace as outlined over at runrex.com. Certain NFTs are also only available on specific platforms. For example, if you want to buy NBA Top Shot packs, you will need you open an account with NBA Top Shot, create a Dapper wallet, and fund it with either the USDC stablecoin or supported fiat currency options. You will then have to wait for one of the card pack drops to be announced before trying your luck in trying to buy them before they sell out.
Pack and art drops
According to guttulus.com, pack and art drops are becoming increasingly common as a method for selling scarce NFTs to an audience of hungry and eager buyers. These drops normally require users to sign up and fund their accounts beforehand so that they don’t end up missing out on the opportunity to purchase NFTs when they drop.
Examples of popular NFT marketplaces
This is a marketplace for NFTs that operates on Ethereum. Users can interact with the network to exchange non-fungible tokens for cryptocurrency. It hosts a variety of digital collectibles, from video game items to digital artwork. To use the platform, you need a web3 cryptocurrency wallet like MetaMask.
This is a social network for NFTs. Each piece on this platform is unique and users can buy and sell the original pieces on its website. The platform operates with Ethereum’s network, which means you will need to fund your account with ETH tokens to make your purchase.
This is an NFT marketplace owned by the popular cryptocurrency exchange Gemini as discussed over at runrex.com. The platform works with popular artists like Steve Aoki, Grimes, and many others to release artwork on the primary marketplace. The company also has a secondary marketplace that allows collectors to resell artwork. You can either fund your Nifty Gateway account with Ethereum, or you can connect a credit card directly on its website.
NBA Top Shot
As already mentioned, this is a marketplace for licensed NBA collectibles. These digital items offer a new take on basketball cards and they are more interactive than traditional trading cards since they feature in-game highlights of the featured players as articulated over at guttulus.com.
These are just some of the most popular NFT marketplaces to check out if you want to buy NFTs. Others include Rarible, Foundation, Axie Marketplace, BakerySwap, VIV3, among others.
What do I get when I buy an NFT?
When you buy an NFT, you own the original rights of the digital asset you have just purchased, whether that is music or images. From discussions over at runrex.com, this is proven in two ways: The buyer gets the sole token bequeathing ownership, and each NFT is uploaded to a digital ledger to track when it was created and sold as well as ownership.
Where is the value in NFTs?
If you are considering buying NFTs, then you are probably asking yourself where the value lies in owning one. Much of the value comes from pride and the ability for people to say they own an original piece of work. It is the status that comes with owning the NFT since owning the original is totally different from owning the replica.
Do other versions exist?
While only the buyer of the NFT owns the rights to the original assets, other copies could still be floating around the internet for free. This can be compared to owning the original Mona Lisa when you consider the number of reprints that are floating around. Only one person has the original.
What makes an NFT an original?
As the gurus over at guttulus.com point out, each blockchain-based token is unique. NFTs have metadata that certifies when they were made, who created them, and other descriptors. This information is then combined with a cryptographic hash function, a technique that turns the data into a unique, 40-digit sequence of letters and numbers, creating a unique identification.
What about the copyright?
Another question that always crops up whenever one is looking to buy an NFTs is the question of copyright and whether you will own the copyright to the asset as well when you buy the NFT. As covered over at runrex.com, ownership rights to NFTs are a detail that is still being ironed out in the US. As it stands, when a person acquires an NFT, the underlying asset is owned, but not the copyright, which will remain with the creator.
What if you want the copyright too?
If the person buying the NFT wanted all rights to a collectible, then the copyright holder would then need to separately transfer the copyright by contract according to the subject matter experts over at guttulus.com.
How much do they cost?
It depends. While some have sold for as little as a few dollars, other high-end digital art pieces have sold for millions at auction. We have seen a meme called Nyan Cat, which depicts a cat with the body of a Pop-Tart, being purchased for almost $600,000, while at the same time, the Kings of Leon NFT albums were sold for $50.
Steps to take to buy an NFT
If you are looking to buy an NFT, the following are the general steps you will go through:
Make an NFT marketplace account
As already discussed, there are many marketplaces to buy and sell NFTs. Depending on the marketplace you choose, you will be able to purchase different types of art collectibles. Most of these websites have secondary marketplaces with a variety of NFTs, but each platform operates slightly differently.
Download a crypto wallet, link it to your account, and fund it
After creating an NFT marketplace account, you will need to download an Ethereum wallet that supports ERC-721 such as MetaMask since most NFTs are Ethereum-based tokens. Once you download it, you link it to your NFT marketplace account and fund it as explained over at runrex.com so that you can have the ETH to buy NFTs.
Buy your NFT
Once you have linked a wallet to your account and funded it, then it is an easy process to buy an NFT according to guttulus.com. Most marketplaces are in an auction format, which means that you will need to submit a bid for the NFT you want to purchase. Some marketplaces operate more like an exchange using the highest bid and lowest ask for NFTs that have several prints.
These are the basic steps that you go through when looking to buy an NFT.
Buying NFTs on the primary marketplace versus the secondary marketplace
When looking to buy an NFT, you can either purchase on the primary marketplace or the secondary marketplace as outlined over at runrex.com. A benefit of purchasing an NFT from the primary marketplace is the potential resale value directly after the product goes on sale. Some NFTs that are in high demand will sell for 5 to 10 times their initial price right after the release. The downside to buying NFTs on the primary marketplace is that it is hard to estimate the demand for the art. On the secondary marketplace, you can compare your purchase to previous sales.
Are there scams and risks to be aware of?
It is worth noting that even on the most reputable marketplace sites, there are scams. The best way to combat this is to purchase NFTs from verified sellers. You should also treat buying NFTs as if you were trading in the stock market. This means not spending more than you are willing to lose and sticking to the common type of ‘blue-chip’ items.
Is now a good time to buy NFTs?
Finally, if you are considering buying NFTs, you may be asking yourself if now is a good time to do so. The NFT craze is far from being over, with major brands, celebrities, and sports personalities such as the UFC, Shawn Mendez, and Rob Gronkowski, to mention a few, planning to or having already gotten into this space. With more blockchains competing to produce better NFT services too and a growing range of platforms to choose from, now is a great time to get into this space.