Entering the NFT space can seem complex, but understanding how to buy NFTs is essential as the market is projected to reach a staggering USD 222.79 billion by 2031 (Source: Verified Market Research). With unique digital assets ranging from art to virtual real estate, NFTs have become a popular form of investment.
Navigating the NFT space begins with choosing the right platform, securing a digital wallet, and following a step-by-step process. This guide will walk you through the essential steps needed to confidently buy an NFT.
Key Takeaways:
- An NFT, or non-fungible token, is a unique digital asset that represents ownership of a specific item or piece of content, like art or music, recorded on a blockchain.
- To buy an NFT, you need to set up a digital wallet like MetaMask, connect it to a marketplace like OpenSea, browse available NFTs, and complete your purchase with Ethereum or Solana.
- The best marketplaces for buying NFTs are OpenSea, Rarible, and Magic Eden.
What is an NFT?
NFTs, or Non-Fungible Tokens, are digital assets stored on a blockchain. Each NFT represents a unique item, such as digital art, collectibles, or even virtual real estate.
Unlike cryptocurrencies like BTC or ETH, NFTs are not interchangeable. Each token holds its value based on its rarity and the demand for the specific asset. Blockchain technology ensures the security and authenticity of NFTs, making them a popular choice for collectors, artists, and investors.
NFTs can be thought of as certificates of ownership for virtual assets. When you purchase an NFT, you are not just buying the artwork or item but also acquiring ownership rights verified by the blockchain. This creates a transparent record of ownership that cannot be duplicated.
The value of an NFT is determined by several factors, including its uniqueness, the reputation of the creator, and market demand. Some NFTs have fetched millions of dollars at auction, while others have a relatively low value.
Key Requirements for Buying NFTs
Certain conditions must be met before purchasing NFTs. These include using a crypto wallet, buying the proper cryptocurrency, and creating an account on a suitable NFT marketplace.
- Crypto Wallet: A cryptocurrency wallet is required for storing both cryptocurrencies and NFTs. The wallet allows you to engage with blockchain networks, make purchases, receive assets, and store NFTs.
- Cryptocurrency: Most NFT markets need transactions to be completed with cryptocurrency. Ethereum (ETH) is the most often utilized cryptocurrency for NFT purchases, however, some sites also take Solana (SOL) and Binance Coin (BNB).
- Account on an NFT Marketplace: You must first create an account on an NFT-specific marketplace. Marketplaces serve as platforms for buyers and sellers to engage. Each marketplace has different sorts of NFTs, so select one that matches your interests and the blockchain network you wish to utilize.
Choosing a Crypto Wallet
When it comes to buying NFTs, choosing the correct crypto wallet is critical. You can select between hot wallets (software wallets) and cold wallets (hardware wallets).
Hot wallets are digital wallets that link to the internet. They are usually more convenient to utilize since they provide quick access to your NFTs and assets. MetaMask, Trust Wallet, and Coinbase Wallet are popular hot wallets for storing NFTs.
Cold wallets are offline devices that hold cryptocurrency and NFTs. They provide increased security because they are not linked to the internet. Popular NFT cold wallets include Ledger Nano X and Trezor Safe 5.
Setting Up and Funding Your Wallet
Once you’ve decided on a crypto wallet, the next step is to set it up and fund it with Ethereum or other coins. Most wallets offer a straightforward setup procedure that includes creating an account, storing your private keys, and setting a recovery phrase.
Setup Wallet: Step-by-Step
- Install the wallet: Hot wallets can be downloaded as browser extensions or mobile apps. For cold wallets, follow the instructions that come with the hardware.
- Create an account: This often entails creating a password and getting a recovery phrase. Keep this seed phrase secure since it is the only method to get your wallet back if you lose access.
- Secure the wallet. Enable two-factor authentication (2FA) for increased protection, and keep your secret keys secure.
- Add Cryptocurrency: To fund your wallet, buy cryptocurrency from an exchange like as OKX, Binance, or KuCoin. After acquiring the cryptocurrency, send it to your wallet by providing the relevant wallet deposit address.
Where to Buy NFTs: Best NFT Marketplaces
Now that you have a digital currency wallet and cryptocurrency, the following step is to select a marketplace to purchase NFTs. There are multiple markets for NFT trading, each with its own set of features, NFT kinds, and blockchain compatibility.
Opensea
OpenSea is the biggest and most popular NFT marketplace with over $39 billion in trading volume (source: Dune Analytics). It is also the first NFT marketplace that supports a broad variety of NFTs, such as digital artwork, music, and virtual property.
OpenSea mostly uses the Ethereum blockchain, but it also supports alternative blockchains like Polygon. The platform is easy to navigate, making it an excellent platform for newcomers. OpenSea charges a 2.5% transaction fee on NFT sales.
Rarible
Rarible is a decentralized NFT platform where users can purchase and trade NFTs across several categories. It has a distinctive feature of allowing users to mint their own NFTs without knowing how to code.
Rarible supports many blockchains, including Ethereum, Flow, and Tezos, allowing purchasers a more diverse range of NFTs. The platform also has a community governance approach, which allows users to vote on platform upgrades and modifications.
Magic Eden
Magic Eden is a marketplace dedicated to Solana-based NFTs. It has cheaper transaction costs and quicker transactions than Ethereum-based markets because of the Solana blockchain’s performance.
Magic Eden is perfect for buyers seeking gaming-related NFTs or low-cost alternatives to Ethereum-based marketplaces. However, it also supports Bitcoin NFTs.
Binance NFT
Binance NFT marketplace is connected with the Binance cryptocurrency exchange, allowing current Binance users to easily purchase and sell NFTs. The site provides a diverse range of NFTs, including those relating to art, music, and gaming.
Binance NFT supports several blockchains, including Ethereum and BNB Smart Chain (BSC). One of the benefits of utilizing it is that the NFT transaction costs are cheaper than on other platforms, and you can make purchases with Binance’s native currency (BNB).
Niche Marketplaces (for specific NFT types)
In addition to the major NFT platforms, there are several niche marketplaces that cater to specific types of NFTs. For instance:
- Foundation: A platform for high-end digital art NFT projects.
- NBA Top Shot: Specializes in sports-related NFT collections, particularly NBA moments.
- Axie Marketplace: A gaming-focused platform that offers NFTs related to Axie Infinity.
What does Minting an NFT mean?
Minting means creating a new NFT on a blockchain. When digital content is minted, it becomes a part of the blockchain. This ensures its authenticity and uniqueness. Creators can mint NFTs representing art, music, videos, or other types of digital files.
Once an NFT is minted, it is added to a blockchain ledger, where its ownership and transaction history are recorded. Minting allows NFT creators to monetize their digital work and start selling NFTs on marketplaces.
For buyers, minting may involve participating in an NFT drop, where newly created NFTs are sold directly from the creator. Minting can sometimes offer lower prices since the NFTs are being sold for the first time and have not yet entered the secondary market.
How to Buy NFTs: A Step-By-Step Guide
The process of buying NFTs involves several steps, from setting up a wallet to purchasing the NFT on a marketplace. Below is a detailed step-by-step guide to help beginners buy their first NFT.
Note: We have selected MetaMask and OpenSea as reference examples for a crypto wallet and marketplace to make understanding easier.
Step 1: Select and Fund Your Crypto Wallet
The first step is choosing a crypto wallet compatible with the blockchain of the NFT you want to buy. We will be choosing MetaMask as an example for this guide. MetaMask is a popular cryptocurrency wallet that allows you to connect with NFT markets like OpenSea. To start:
- Install MetaMask: Go to the MetaMask webpage to install the browser extension. MetaMask is compatible with Chrome, Firefox, and other browsers.
- Create a Wallet: Once installed, open MetaMask and select “Create a Wallet”. Create a strong password, and then back up your seed phrase. This 12-word phrase is essential for regaining your wallet if you lose access. Keep it safe and never share it with anybody.
- Fund Your Wallet: You will need Ethereum (ETH) for an NFT purchase on OpenSea. You can transfer Ethereum from other cryptocurrency exchanges such as MEXC, Bybit, and Coinbase. You can also use decentralized exchanges like Uniswap or Panckaeswap for buying crypto.
Step 2: Choose a NFT Marketplace and Connect to Wallet
After setting up your wallet, the next step is to choose a marketplace where you can buy an NFT. We will choose OpenSea as an example for this guide.
Head over to OpenSea and click the “Login” or profile icon in the top-right corner. When prompted, choose MetaMask as your wallet provider. Confirm the connection through MetaMask by approving the wallet’s interaction with OpenSea.
Step 3: Find an NFT to Buy
Once your wallet is connected, you can browse OpenSea’s extensive collection of NFTs. Use the “Explore” option to navigate different categories like NFT Art, PFPs, or Memberships.
You can also use filters to narrow down your search by price, popularity, or blockchain (Ethereum, Polygon, Avalanche, etc.). After finding an NFT that interests you, click on it to view details like its description, ownership history, and pricing options.
Step 4: Purchase Your NFT
When you are ready to make a purchase:
- Buy Now: If the NFT is available for immediate purchase, click the “Buy Now” button. Review the details of the transaction, including the gas fees, which can vary depending on Ethereum network activity.
- Place a Bid: On NFT auctions, you can place a bid. Ensure your bid is at least 5% higher than the current highest bid. If your bid wins, the NFT will be transferred to your wallet.
Once you’ve reviewed and are ready to proceed with the purchase, a MetaMask window will pop up asking you to approve the transaction. Check the transaction fees and total cost, then click “Confirm”.
Now, once the transaction is complete, head to your OpenSea profile, and the NFT should appear under your NFT collection. You can click on the NFT to view its details and see it displayed in your wallet.
How to Store and Secure Your NFTs?
Your NFTs will be stored in your cryptocurrency wallet. It will be automatically added to your wallet once you complete the transaction in above step 4.
However, the level of protection varies depending on the wallet you select. Here are some strategies for securing your NFTs:
- Cold wallets: These are more secure for long-term storage than hot wallets. You can store your NFTs on hardware wallets like Ledger and Trezor.
- Enable Two-Factor Authentication: Adding an extra layer of protection to your wallet can help keep your funds safe from illegal access.
- Back-Up Your Wallet’s Recovery Phrase: Keep your recovery phrase or private key in a secure location. Without it, you will lose ownership of your wallet and NFT permanently.
- Stay Alert to Frauds: The NFT area is full of phishing attempts and frauds. Always double-check the links, platforms, and NFT offers you get.
NFT Investment – Is it Worth It?
Investing or trading NFTs can be profitable, but it also involves substantial risk. The NFT market, like cryptocurrencies, is extremely volatile. For example, from 2021 and 2024, NFT sales fell by about 70%, demonstrating how volatile this industry can be.
However, certain NFTs have generated significant profits, such as Beeple’s digital artwork, which sold for $69 million in 2021, and CryptoPunks, which were initially free but eventually sold for millions.
When thinking about investing in NFTs, you should:
- Research the Creator: Invest in NFTs made by well-known artists or developers with a history of successful projects.
- Understand the Market: Because the value of NFTs is frequently linked to hype and trends, it’s critical to monitor market movements and be aware of possible risks.
- Diversify: As with any investment, diversifying your portfolio can help reduce risk. Don’t commit all of your finances to a single NFT or project.
For more information, check out our guide on the pros and cons of investing in NFTs.
Conclusion
In a nutshell, to purchase NFTs, you must first understand the fundamentals of cryptocurrencies, crypto wallets, and blockchain technology. By following the steps given in this guide, beginners can confidently navigate the world of NFTs. Whether you want to invest, collect, or discover new digital assets, selecting the correct wallet, marketplace, and NFT is essential for a successful experience.
Also, investing in NFTs may be extremely profitable, but it also carries substantial dangers. The market’s volatility, hefty transaction costs, and lack of regulation make it a risky investment.
However, for individuals who understand the industry, NFTs provide unique prospects for owning digital items of verified authenticity while also supporting artists. Therefore, NFTs can be a beneficial addition to an investing portfolio.
FAQs
Can I buy NFTs without crypto?
No, most NFT marketplaces require cryptocurrency to make a purchase. You will need to use a crypto wallet to store your NFT and have sufficient cryptocurrency to complete the transaction and pay gas fees.
Can I resell NFTs?
Yes, NFTs can be resold on secondary marketplaces. The resale value of an NFT depends on its rarity, the reputation of the creator, and the demand in the market.
What is the cost of 1 NFT?
The cost of an NFT might range from a few dollars to millions. The price is influenced by several factors, including the creator’s reputation, the rarity of the NFT, and the blockchain technology employed. Transaction expenses, like gas fees on Ethereum, also affect the overall cost of buying an NFT.
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