How to Buy NFTs in 2022 (Ultimate Guide)
An NFT (Non-Fungible Token) is a token on the Ethereum blockchain created by the Non-Fungible Alliance.
Buying an NFT is like buying a one-of-a-kind, unique artwork.
You can’t buy multiples of the same exact picture, but each is something different—and in some cases considerably rare; they are valued based on how many other people want them (demand) and how scarce they are (supply).
NFTs are collectibles that, in many cases, can be traded.
They often represent digital assets that are rare, like in-game items or skins, or they can be digital representations of physical items.
Most understand that by using an NFT marketplace, they can use crypto and Fiat interchangeably to buy NFTs.
Some might also use a crypto lending platform to get the needed assets to make buying an NFT a reality.
There are even crypto portfolio trackers that can store NFTs in addition to other types of currency.
But the big question is – how does the whole process work?
In this article, I will teach you how to buy NFTs, going through each step of the process.
I will also provide some tips on what to look for when buying NFTs, as well as general advice on how to stay safe when participating in the NFT market.
Table Of Contents
NFTs are digital tokens that represent unique, non-interchangeable or “non-fungible” items stored on a blockchain.
For example, photos, videos, audio files, avatars, and more.
Even something like a unique puzzle piece icon can be an NFT.
The concept is simple: any asset that cannot be substituted for another is unique or non-fungible. And the industry is all over this.
Notice that it isn’t interchangeable like crypto assets.
Bitcoins, Dollar, Ethereum are all fungible tokens. This applies to any other cryptocurrency on the market.
You can spend a Dollar anywhere; you can send one BTC to anyone anywhere else in the world; you can send 0.25 ETH to anyone with an Ethereum address.
But that’s not the case with all tokens, though.
NFTs can range from tokens that represent ownership of a virtual/digital asset to objects within a video game.
This is why knowing what the best NFT tokens are is crucial before making a purchasing decision.
Each NFT is scarce and has unique properties usually stored in the token’s metadata.
The number of tokens can get verified on the blockchain, making it indivisible too.
Here are some of the top-performing NFTs:
There are several types of NFTs.
For instance, “Collectibles” — unique items, such as songs, digital artwork, photographs, and the like.
You can buy, store, and resell NFTs like these on a physical medium.
The second type is single-use NFTs that you can enjoy in a game, such as Axie Infinity.
As the name suggests, an individual NFT cannot be replicated, so they are more akin to a trophy.
There are also more complex uses of NFTs, such as giving access to property or market data upon completion of a task.
You can even use them to tokenize documentation, such as academic certificates, medical records (birth and death certificates) licenses, among other certifications.
People can even tokenize their marriage vows.
Yes, two people in a relationship can decide to make their wedding vows – binding them forever by inscribing them into a smart contract on the blockchain.
Rebecca Rose and Peter Kacherginsky, employees of the top crypto exchange Coinbase, did just that.
Image Source: Twitter.com
Aside from their traditional Jewish nuptials, the couple wrote an Ethereum smart contract that issued tokenized “rings” NFTs to the couple’s wallets.
They named their NFT token “Tabaat,” which is the Hebrew word for the ring.
The NFT market is flourishing, but it still holds certain risks.
Here are some advantages, limitations, and disadvantages of non-fungible tokens:
NFTs are popular in gaming and virtual goods economies.
Although it’s a common belief that there are no actual use cases for NFTs outside of the gaming/virtual goods industries, there are many interesting types of NFTs that challenge this belief.
The possibilities for NFTs are wide open, and you can make almost every collectible into an NFT.
The following are some of the most tradeable NFTs on the market:
Music, audio, and records are among the unique types of NFTs.
Music is objectively great to listen to, and it won’t ever degrade over time which is why it’s so easy to resell.
Before the internet, you would have to purchase a CD or cassette tape (yes, kids still have these).
With the development of blockchain technology, music and sounds can get digitized and stored in the blockchain through Non-fungible Tokens (NFTs).
This also makes it possible for artists to create their own platforms to sell their music and audio clips as NFTs.
Now, they don’t have to deal with record labels and streaming platforms and their commissions either.
Even renowned artists like Grimes and King of Leons are now taking advantage of the platform.
Surprisingly, Elon Musk jumped on the bandwagon and created a song about NFT as an NFT.
Image Source: Twitter.com
Digital art is one of the most popular forms of NFTs.
The word “art” conjures up images of Leonardo Da Vinci’s Mona Lisa or Michelangelo’s David.
However, a new art form emerged recently — non-fungible tokens (NFTs) — that is increasingly gaining popularity with blockchain projects and collectors alike.
And while it may not happen to everyone, some digital artists are minting millions of dollars by selling their art as NFTs.
For instance, CryptoPunks’ four artworks are among the top ten most expensive NFTs.
One is available for over $10 million.
Image Source: Larvalabs.com
Even the lowest-priced punk is up for sale for 72.99 ETH (USD 318,914.48).
Digital art can be in the form of videos, gifs, images, and more.
In-game items are a popular type of NFTs.
Simply put, an in-game item refers to an item that you can earn, purchase, trade, or find in a game.
Examples of in-game items include skins, characters, and sprays that a player can obtain through loot boxes or purchase through the in-game shop.
One prerequisite of a non-fungible token is that it should be unique and shouldn’t be compared with any other token.
Any real-world item that meets this criterion can be an NFT, considering that you’re able to prove its ownership.
Some examples of real-world items as NFTs include documents, property deeds, tickets, celebrity autographs, and the like.
Other than this, you can also list miscellaneous online items like tweets, Snapchat stories, Facebook statuses, blog posts, etc., as NFTs.
Buying non-fungible tokens (NFTs) on the open market is becoming easier as more and more platforms are starting to allow the trading of these unique tokens.
Here are the steps you need to follow if you want to buy non-fungible tokens.
NFT is an ERC-721 standard token on the Ethereum blockchain, making it necessary to buy Ethereum to get an NFT. Most NFT marketplaces also accept Ethereum only.
So, the first step is to stock up on ETH.
You can purchase Ethereum on any cryptocurrency exchanges like Coinbase and Binance.
The next important step is to send ETH to your MetaMask wallet, a cryptocurrency wallet that interacts with the Ethereum blockchain.
First and foremost, join an NFT marketplace.
Some popular NFT marketplaces include:
- Binance NFT.
- NBA Top Shot Marketplace.
- Nifty Gateway.
- Axie Infinity.
Next, install MetaMask and connect your MetaMask account to an NFT marketplace to invest in your favorite NFTs.
The types of NFTs you’ll be able to access will depend on your marketplace.
For example, OpenSea comes powered with NFTs focused on art, music, domain names, virtual worlds, trading cards, collectibles, among other digital assets.
There are two common ways investors invest in NFTs. You can either place a bid on your favorite NFT or buy a fixed-price NFT.
Let’s see how you can buy an NFT with OpenSea, a well-known and one of the largest NFT marketplaces.
You’ll see the “Buy Now” and the “Make Offer” option when you open the item page.
The “Buy Now” button allows you to buy the token there and then, while the “Make Offer” button is for placing your bids.
Some item pages will only show the “Make Offer” option, which means that the NFT is not up for grabs, and you’ll only be able to purchase via bidding.
You can also gain insights into the token’s price history, properties, and other details.
The marketplace will take you to the review collection details if your item is part of the “unsafelisted” collection. You’ll have to confirm whether it’s the correct one.
Next, you’ll get prompted to select the currency you’d like to place your bid in.
OpenSea gives you the option to make your offer in:
- Wrapped ETH (WETH)
If you plan to use the ETH coin for your bid, you’ll notice that Wrapped ETH (WETH) is the only option.
Wrapped ETH (WETH) is a base-wrapping token on the Eth blockchain. The purpose of WETH is to aid ERC20 transfers between wallets or exchanges.
Transactions with ERC-20 tokens can be subject to lengthy processing times and high gas fees.
Wrapped ETH solves this problem by “wrapping” ETH into WETH, allowing instant and more convenient transactions.
WETH allows you to fulfill the pre-authorized bids later without any action from the bidder.
Converting your ETH token to WETH is simple, especially since both are worth the same amount.
You can use this guide to exchange ETH for WETH on OpenSea.
You’ll also have to pay a one-off network transaction fee (one-off gas fee) if it’s your first time using WETH.
Once you enable this, you can make offers for free.
Moreover, your bid must be at least 5% higher than the previous offer.
The auction might get extended by ten minutes if someone places a bid in the last ten minutes.
However, it’s only applicable if their offer exceeds all others.
You’ll get true ownership rights after you acquire your desired NFT.
If you’re looking to buy non-fungible tokens, the internet can be a bit overwhelming at first. This is particularly true for those just starting to dig into the crypto space.
Even as an experienced NFT collector, sometimes you need to know where to purchase NFTs.
There are plenty of options to buy NFTs, which isn’t surprising considering it is a growing industry.
This guide will touch upon the most effective marketplaces that will make it easy for you to buy, sell, and trade in NFTs.
OpenSea is the world’s first and largest peer-to-peer marketplace that allows you to purchase, discover, and sell digital art and even store digital assets.
It has categories for art, music, domain names, virtual worlds, trading cards, collectibles, sports, and utility.
It boasts over 2 million NFT collections, more than 80 million NFTs, over $10 billion volume, and more than 600K users.
Signing up with OpenSea is straightforward, although you need to have a crypto wallet since it prompts you to link with a wallet right away.
The marketplace lets you connect with all major digital wallets, including MetaMask wallet, Coinbase wallet, Bitski, Fortmatic, WalletConnect, and more.
MetaMask wallet users can sign in almost instantaneously.
Go to the OpenSea homepage and navigate to the top right corner.
Next, click on the wallet icon and follow the prompt to connect to a wallet service.
Buyers can either opt for fixed pricing or make offers at an auction.
You can also filter NFTs ranked by volume, owner, floor price, and other vital statistics. You’ll also be able to view the pricing history for every item.
Fees: OpenSea takes 2.5% for every transaction on their platform. Artists can create tokens for free at any time. They can charge a royalty of up to 10%.
Rarible is another large marketplace where you can buy, mint, sell, and create all sorts of tokens for resale.
It’s a multi-chain marketplace integrated with Ethereum, Flow, and Tezos.
The platform can lay claim to 1.6M total users, $274M in trading volume, and about 405K NFTs on its marketplace.
One of its key features is the ability to choose your audience, preferable carbon footprint, and the fees you want to pay.
The platform gives you access to different types of tokens, including art, photography, games, metaverses, music, domain names, DeFi, memes, punks, and NSFW.
You can filter the items based on their blockchain, category, collections, sale type, and price range.
Other key features include multiple editions of NFTs, royalties, timed auctions, built-in messenger, personalized activity feed, and more.
It even has its eponymous token, Rarible, that you need to buy and sell on the marketplace.
Nifty Gateway is an NFT platform to buy, sell, store, and display your digital art and collectibles. It offers a wide range of art and collectible NFTs available as Curated and Verified Projects. They also provide new drops about once fortnightly.
The fact that it’s a custodial platform makes Nifty Gateway stand out.
This indicates that the NFTs are stored in a secured wallet, powered by Gemini’s state-of-the-art custody technology.
Collectors can buy, sell, or gift on the platform without the cost and hassle of gas fees. You can also retrieve your collectibles even if you end up losing access to your account or forget your password.
Fees: Most art pieces on the platform have a 15% fee, out of which 10% goes to the artist, and the remaining 5% is the service fee. For sellers, it charges 5% + 30 cents of every secondary sale.
SuperRare is an Ethereum-based, decentralized collectibles marketplace that empowers artists and brands to create scarce, virtual objects that live on the blockchain.
You can also buy and sell SuperRare NFTs on OpenSea.
It focuses solely on digital art and features the world’s top digital artists. You can find artwork in the form of still images, 3D artwork, gifs, and videos.
Since all transactions happen on-chain, you can create a tamper-proof record of each artwork’s history.
The platform also announced its own token recently. Named “SuperRare,” the token is based on the Eth blockchain. Their team plans to use the token to find and curate new talent.
If you’re an artist and plan to sell your art on SuperRare, you’ll enjoy ongoing lifetime royalties for all secondary sales on your artwork.
Fees: They levy 15% for original sales and a 3% buyer’s premium.
Larva Labs is a platform with professional and experimental projects in the NFT space, famous for their crypto art project CryptoPunks.
CryptoPunks is a fun, unique, and authentic NFT (non-fungible token) collection centered on crypto-memes.
Each crypto punk has its own appeal captured by its artist to create a collection of 10,000 unique collectible characters.
Initially, Larva Labs gave them for free to anyone with an Ethereum wallet. Now they are up for bidding on various marketplaces.
Their other Ethereum blockchain-based digital art projects include Meebits, Road Trip, Boo, AppChat, Autoglyphs, and more.
They also have client relationships with companies such as Google and Microsoft.
NBA Top Shot is an NFT platform to buy collectible NBA moments, such as video clips and play highlights from the world’s top basketball leagues.
The ability to search by players, teams and sets makes the buying process smoother.
The platform allows you to use a credit card, debit card, and multiple crypto wallets to buy and sell.
Signing up is easy. You can do it with your Google account or enter your email and then proceed to buy directly from their marketplace. You stand a chance to buy collectible moments for as little as a few dollars.
Fees: The buyer fee is 5.2632% of the purchase price for each credit card transaction and a flat $0.30 for each purchase. The marketplace charges 5% for each sale.
Traders and investors have always used collectibles to trade items, create an extra income, or for more entertainment. Nowadays, you can use virtual items and blockchain technology like NFT.
Here are some tips for buying non-fungible tokens:
When you’re looking to buy a non-fungible token on an NFT marketplace, you’ll want to make sure you check out the transaction fees.
Fees can vary between markets, and if you aren’t careful, they may end up costing you more money than you planned.
For instance, OpenSea charges 2.5% for every transaction, while Nifty Gateway charges a whopping 15%.
If the token you want is available on both platforms, it’s best to use OpenSea to make your purchase.
Doing your due diligence before buying from any NFT marketplace can help you save a lot of money. This will eventually have a significant impact on your portfolio value.
The first thing to decide when you are looking to buy NFT is which NFT marketplace you should buy from.
There are dozens of NFT marketplaces available, but you must secure your funds before buying any token.
The marketplace you choose will be the company that keeps your tokens safe for you and processes your transactions when spending them.
Each company has its strengths and weaknesses, so bear this in mind when choosing the one.
There are numerous benefits of purchasing an NFT, but it can be risky.
However, you can prevent this by checking their discord channel before making the ultimate decision.
Most tokens have their dedicated Discord channel where you can learn about the project, creators, and the foundation. You should also check if the project’s team members are active in their Discord channel.
The Ethereum Gas Fee is the cost of running a transaction or contract in the Ethereum network.
There’s no way to avoid this fee, but you can try to make the purchase when it’s the lowest.
Usually, the fee can range from $30-$150 or even more. However, it’s typically lower from 2 am-7 am EST.
You can also compute the optimum fee using Eth Gas Station.
As the popularity of Non-Fungible Tokens (NFT) grows, so does interest in the various discord servers, forums, and other social media platforms.
Suppose you are looking for a smaller, more intimate place to discuss NFTs and chat with like-minded users, be leery when joining random chats.
Many scammers will create small communities that they use as bait to get you to share your private key or other details.
Also, be aware of large giveaways such as “free ETH” or “giveaway,” where you have to share your personal data to claim the reward. It’s best to avoid rash decisions without drawing up smart contracts.
The first thing you should do is verify the NFT you intend to purchase and ensure its legitimacy.
One way to do it is by viewing the token’s blockchain history.
A blockchain is like a public ledger where transactions made in cryptocurrencies are recorded chronologically and publicly.
You’ll get access to pertinent details like transaction history, pricing, and trades, which will help you verify the token’s authenticity. Etherscan.io is also a dependable source for verifying NFTs.
From celebrities such as Eminem making almost $1.8 million with his NFT series to the couples listing their wedding vows in Ethereum blockchain – these tokens have captured the attention of the crypto world and beyond, grossing over tens of millions of dollars in NFT sales.
Most NFTs may not make millions like a digital asset owned by an A-list celebrity or a renowned digital artist, but you can start your collection to try your luck.
If you’re an artist, this platform also gives you an outlet to show your artwork and creativity to the world.
For instance, the digital artist and animator Michael Winkelmann, professionally known as Beeple, sold an NFT of his creation for $69 million.
It’s nothing short of a miracle since until now, Beeple could only bag $100 at most for his creations. NFT marketplaces made it possible for him to sell his digital work to a world-renowned auction house like Christie’s.
Your digital collectibles or NFT art may not end up in eminent auction houses; creating your own NFTs is still worth giving a try.
Follow these steps to create NFTs:
Note that I’m using OpenSea to create NFTs here.
- Click on the “Create” button in the upper-right corner. It will take you to a screen prompting you to link to your Ethereum-based wallet. Enter the wallet password to connect the wallet with the marketplace.
- Next, you’ll get directed to the item creation page to upload your image or file, along with the token’s name and description.
- Your file size can go up to 100MB, but OpenSea recommends keeping it under 40MB to make it load faster. As for formats, you can add images, videos, or 3D models.
- Next, customize your item page by adding the levels, stats, unlockable content, properties, and more. This is your chance to make your NFT stand out.
- You can also add exclusive content for the buyer. It could be discount codes or passwords to let buyers access selected services.
- Finally, click on the “Create” button at the bottom of the page and sign another wallet message to verify that it’s your NFT. The token should reflect in your collection now.
Now, it’s time to sell your newly created NFT.
Follow these steps to sell your NFT (with OpenSea):
- Select your profile picture from your dashboard and click on the “Profile” option. Next, select the NFT you want to sell. This will take you to the item page.
- Hit the “Sell” button in the top right corner of your item page.
- Next, set your price and the type of sale. You have two options – “Fixed Price” or the “Timed Auction” sales. Timed Auction lets you sell to the highest bidder or sell with a declining price. On the other hand, the “Fixed Price” entails selling NFTs at the set price or “reserve price.”
- You can also set a specific duration for sale. While you have default options, you can customize them using a built-in calendar.
- OpenSea also allows you to reserve your token for a specific buyer. To do so, just add their address to the “Reserve for a specific buyer” field.
- Finally, the platform will prompt you to confirm your sale by signing a transaction. You’ll get a pop-up confirmation right after the listing is complete.
If you want to sell NFTs to make millions, you’re not alone. The majority of crypto-enthusiasts join the industry with the hopes of striking it rich.
However, there are no guarantees in this volatile market.
Either you’re a sought-after influencer with millions of followers on social media or an acclaimed celebrity. If not, you have to create something distinctive and generate hype around it to earn a significant amount.
Hopefully, this guide gave you a better understanding of NFTs and how you can invest in them.
The future of owning is likely to be more of a digital/virtual one.
You already have a whole host of virtual artwork, collectibles, and real estate assets available on all types of crypto exchanges sitting on the blockchain.
In addition, these are all available to view, sell, and buy via your smartphone.
The ability to add value to unique items and artwork made NFT a household name. It may grow out of its infancy, closer to mainstream adoption in the future – or wash out before that.
In the wake of alarming environmental impact, the future of NFT, Ethereum, and other cryptocurrencies are still uncertain.
Further reading on AdamEnfroy.com: Did you know that Bitcoin mining is as strong as ever right now? In fact, here’s the best bitcoin mining software to consider if you’d like to start generating your own Bitcoin.
Also, if you want to learn more about various other types of investments you can do, here are the best investment apps to consider right now.