Digital ownership has become a revolutionary concept across many industries. NFTs, which are at the forefront, take ownership to the next level by leveraging blockchain technology.
In March, Christie’s Auction House sold an NFT, “The First 5000 Days” by Beeple, for more than $69 million in Ethereum, setting the record for the highest-selling NFT. However, this is just one example of NFTs selling at very high prices.
Artists like Beeple and athletes like LeBron James use NFTs to release their work to the public and allow their fans to be part of the process. Nonetheless, there are several things you need to understand before approaching an NFT marketplace and parting with your hard-earned cash this article will provide some guidance by providing insight into how to buy NFT tokens.
An overview of non-fungible tokens
Non-fungible tokens are different from the cryptocurrencies that most people know. Most NFTs derive their utility from the asset or media they represent. The most common media and digital assets are in music, art, game accessories, and collectibles.
When it comes to buying NFTs, if you have used eBay, you have an idea of how to buy NFTs. If not, do not worry. This article will help you grasp the concepts involved. Like eBay, NFTs are sold at fixed prices and at auction houses where potential users place bids in an attempt to win their chosen NFT.
Another key thing to note is that NFTs are priced in cryptocurrencies and dollar values. However, the dollar price value frequently changes due to the volatility of the cryptocurrency trading price.
Why would you want to buy NFTs?
Unlike cryptocurrencies, NFTs aren’t fungible; they cannot be exchanged for other similar assets. So why would you want to buy an NFT?
The primary purpose of buying NFTs is similar to purchasing collectible cards, arts, or signed music to either hold on to or resell later at a profit. In the NFT space, most people purchase NFTs intending to resell them for a higher price and make a profit. However, there are still a few individuals who are collectors. They are buying NFTs and holding on to them. With this in mind, here is a step-by-step guide to buying your first NFT, even if you have never owned an NFT before.
How to Buy NFT Tokens
Step 1: Acquiring a Cryptocurrency wallet
How to Buy NFT Tokens
Your first step on this NFT journey is to get your hands on a digital wallet, one that you can use to store your cryptocurrencies and NFTs. There are two main types of digital wallets: custodial wallets, and non-custodial wallets.
According to CryptoVantage, non-custodial wallets are digital wallets on your browser or mobile phone that allow you to hold your private keys. That is, you are not limited to the transactions you can make or the assets you can purchase.
Custodial wallets, on the other hand, are digital wallets that third parties manage. Here, you hand over your cryptocurrency funds to a third party to be stored rather than taking full responsibility for your funds and private keys.
In the NFT market, you will need a non-custodial wallet to give you complete control over your digital assets. Some custodial wallets like Coinbase do not simply allow users to purchase NFTs directly from the Coinbase wallet.
To set up your Metamask wallet, proceed to the Metamask site and download your Metamask browser extension for your PC or the Metamask App for your phone. You will then be prompted to set up your wallet by creating a password and a 12-word seed phrase. It is crucial to note that the seed phrase acts as your private key. You’ll need to write it down and store it in a secure place.
Step 2: Getting your hands on some cryptocurrencies
Now that you have set up your Metamask wallet, you may want to buy some cryptocurrencies to purchase NFTs. According to The Times, the most popular host blockchain for NFTs and the currency that NFTs are primarily priced in is Ethereum. Therefore, we are going to use Ethereum as our cryptocurrency of choice.
There are two ways to purchase Ethereum on Metamask:
i. Using your Debit Card or Apple Pay
You can easily buy Ethereum with a debit card or Apple Pay directly by clicking “Buy” within your Metamask wallet.
Once you click “Buy,” you’ll get the option, “Wyre”, which allows you to buy Ethereum with your debit card. Proceed to click “Continue to Wyre.”
You will then be prompted to set the amount of Ethereum in dollar value that you want to purchase. Confirm your Metamask wallet address and look through the transaction fees to ensure you are okay with the amount. With all these confirmed clicks, “Next.”
Next, you will be directed to a page where you will be required to enter your Debit Card payment information. Ensure you enter the correct information before you proceed.
Finally, you will be directed to the confirmation page of your purchase and the purchase details. Double-check the details and click “Confirm.” It may take a few minutes for the Ethereum to appear on your Metamask wallet.
ii. Transferring your existing Ethereum to Metamask
Copy your new Metamask public address, proceed to your existing wallet or exchange, and select the “Send” option. Enter how much Ethereum you wish to send, paste your Metamask public address into the “To” field, and hit send.
It is crucial to note that this process allows you to transfer your funds from a custodial to a non-custodial wallet.
Step 3: Sign up to an NFT Marketplace
You have now purchased your Ethereum, and it’s safely stored in your Metamask wallet. Now you need to find a marketplace to purchase your first NFT.
There are dozens of NFT marketplaces in the crypto space. Most of these marketplaces host NFTs that have similar properties – these can be digital art, images, video, NBA Top Shorts, blockchain domain names, or digital collectibles, to mention a few. However, some of them are more specialized for proficient artists and special types of NFTs.
For instance, the NBA Top Shot Marketplace only sells NFTs minted (created) from NBA content. Rarible, on the other hand, only sells digital art from proficient artists. Some like ValuablesByCent specialize in selling and trading rare tweets. Others like OpenSea and SuperRare are diverse and offer almost all types of NFTs.
To sign up for an NFT marketplace, proceed to the marketplace URL and click “Create.” In this guide, we will use OpenSea for illustration purposes since it’s the largest NFT Marketplace.
Step 4: Connect your Wallet to an NFT Marketplace
To sign up to OpenSea, you will be required to connect your Metamask wallet to OpenSea. On OpenSea, click “Sign In.”
You will then be prompted to connect your Metamask wallet. You will go through multiple prompts, finishing with the connection screen.
When the wallet displays “connecting…” then you are done. It may take a few seconds to complete the connection process.
Once Metamask connects to OpenSea, your account will be set to “Unnamed” by default, showing only your wallet address as the identity of the account. To personalize your account, you can change the name and also add a profile picture.
It is crucial to note that any modification or updates to your profile will require you to sign the transactions through your Metamask wallet. These forms of transactions do not cost you any Ethereum.
Step 5: Buy your First NFT
Now that you have linked your wallet to an NFT Marketplace, click “Marketplace” on OpenSea. Here you’ll be able to scroll through millions of NFTs. Like other marketplaces, OpenSea has a feature that allows you to filter through NFTs.
When you find an NFT that you like, note its price in cryptocurrency (Ethereum) and its equivalent in dollars. If you are okay with the price, proceed to “Buy Now.”
You will be prompted to sign the transaction by providing your credentials and clicking “Sign.”
Next, a “Complete Checkout” window will appear. Go through the total price of your NFT and ensure you are comfortable with it. If yes, click “Checkout.”
You will then be provided with information about the Ethereum gas fee you’ll have to pay in addition to the price of your NFT. One crucial thing to check is the “Gas fees.” When the network is busy the gas fees might be high, but at other times they can be pretty low. If you are comfortable with the gas fees, continue by clicking “Confirm.”
After this, you will be notified that your transaction has started. While blockchain transactions might be fast, it might take several minutes for your NFT to reflect on your Marketplace profile.
Once your NFT is confirmed, you can access it through “My Collection” on your Marketplace platform.
Congratulations! You now own an original NFT piece that was digitally signed by the creator. Only you can resell the NFT piece since your details are attached to the NFT as metadata and forged to the blockchain, giving you ownership rights to the NFT.
You now own an NFT, what next?
Now that you have purchased your first NFT, there are several things you can choose to do with it. You can resell it, keep it as a collectible, use it as a representation of your brand or business, or you can choose to market it across social media platforms to increase its value. The list is endless.
Currently, NFTs are often used to represent digital art and collectibles. While some people say this may be a fad, crypto enthusiasts believe that this is the new way of representing digital assets. In the future, NFTs can be used to create a token economy where physical assets like real estate deeds and vehicle titles can be represented in a transparent and incorruptible way.