Connor Campbell
NFTs are rivalling bitcoin and every other cryptocurrency as the latest blockchain-related must-have item.
But there are a number of things you should know before you approach an NFT marketplace and part with your hard-earned ether.
Below we detail how to buy NFTs, where to buy NFTs, how to make an NFT and how to sell NFT art.
Your quick guide to buying NFTs
Though it can appear to be a complex process, there are a few simple steps you can follow to buy your first NFT.
- Set up a crypto wallet that is compatible with your NFT marketplace of choice.
- Fund your crypto wallet with the cryptocurrency required by your NFT marketplace. This will usually be Ether (ETH).
- Set up an account and connect your crypto wallet to the NFT marketplace.
- Browse the marketplace and select your NFT – whether that’s an artwork, collectible or something else.
- Click ‘Buy Now’, or place a bid if the NFT is at auction.
How to buy NFTs
If you’ve ever used eBay, then you will have an idea of how buying NFTs works.
Most NFT marketplaces function like an auction house. You place a bid, and wait to see if you win your chosen NFT.
Like eBay, some sites also have ‘Buy Now’ options, where NFTs are sold for a fixed price.
Another major thing to note about NFT marketplaces is that prices are usually listed in decimals of ether (though are often accompanied by the dollar value as well). This dollar value can change frequently due to the volatility of the cryptocurrency trading price at any given time.
This is because almost all NFT marketplaces require you to purchase their non-fungible tokens using ether, the currency of the Ethereum blockchain that most NFTs are a part of.
You do this by using a cryptocurrency wallet that contains ether you have previously purchased.
Each transaction is subject to a fluctuating ‘gas fee’. This is money that goes to the ‘miners’ providing the computing power for the Ethereum blockchain.
» MORE: How to invest in cryptocurrency
Where to buy NFTs
There are a number of different NFT marketplaces catering to different needs.
Some list a variety of tokens, from art and music to trading cards and domain names, while others only sell niche branded collectibles, like the one for North American basketball league, NBA Top Shot or Pokemon-inspired online video game, Axie Infinity.
Common NFT marketplaces include OpenSea.io, SuperRare, Foundation.app, Rarible and Mintable.
What you should be aware of is that each marketplace has specific crypto wallet requirements. At present, there is no one wallet that is usable on all the sites.
The most regularly accepted crypto wallet is MetaMask, while others include Formatic, Coinbase Wallet, Torus and Portis.
What is a crypto wallet?
A cryptocurrency wallet allows you to send, receive and store digital assets, like NFTs, and cryptocurrencies, including ether. There are many different types of wallet and they all have different features.
The wallet could be built into your web browser, a browser extension itself, or an app on your phone. Crypto wallets can even be a piece of hardware plugged into your computer.
How to make an NFT
If you want to make, or ‘mint’, an NFT, then all you really need is the image, video or music file you want to upload, and a pre-funded crypto wallet usable with your chosen blockchain (likely Ethereum).
Then you can pick from many of the same sites you would buy an NFT from, like OpenSea.io or Mintable.com, and go create your own.
These marketplaces each have a slightly different way of doing things, but it tends to be as simple as clicking the ‘Create’ button on the site and following the instructions.
This will include uploading the file, choosing whether you want to mint single or multiple NFTs, and selecting the sale price and type.
You may also be subject to gas fees when minting your NFT, but these can differ from platform to platform.
How to sell NFTs
There are two ways of selling NFTs – trading an NFT you have already bought, and selling an NFT you have minted.
And again, like with minting an NFT, there will be fees attached to selling your non-fungible token. This will not only include gas fees, but final sale service fees dictated by the marketplace.
» MORE: NFT art explained: the future of art collecting?
How to sell an NFT you bought
You can resell NFTs on the secondary market, just like anything else you would own.
To do so, make sure the NFT in question is in the crypto wallet paired with your marketplace of choice, and put it up for sale.
While your NFT could sell for more money than you originally bought it for, the long-term or even short-term value of NFTs is not guaranteed.
How to sell an NFT you minted
This will likely be the end point of the creation, or minting, process on whatever platform you are using, as explained above.
Depending on the service, you will either set the ‘Buy Now’ price, or dictate the terms of the auction, namely the reserve price.
In some cases you can even receive royalties every time your NFT is sold in the future.
» MORE: Investing guide and how to get started
WARNING: We cannot tell you if any form of investing is right for you. Depending on your choice of investment your capital can be at risk and you may get back less than originally paid in.
Image source: Getty Images
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