How to Buy Your First NFT in 2024 | OWNR Wallet

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The Complete Beginner's Guide to Buying NFTs

Over the past few years, you must have heard the term NFT at least once. The full phrase, “non-fungible token,” may sound a bit intimidating for beginners. Actually, there is nothing complicated about NFTs, and in this comprehensive guide, we will analyze all the aspects of this phenomenon in the digital economy, from definition to investment.

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What Exactly Are NFTs?

Simply speaking, an NFT is a digital asset, just like cryptocurrencies. It can be bought or sold. Usually, Ethereum is involved in the buying and selling of NFTs.

An NFT is often an art object that has a unique signature that cannot be replaced. If earlier NFTs were mainly understood as colorful pictures, today digital art covers music, graphic design, animation, and so on. The trend is moving towards almost any art object being presented as an NFT. Also, objects with no connection to art are represented by NFTs. For example, Jack Dorsey marked one of his tweets as an NFT.

Regarding the economic component of NFT technology, it is important to note that a non-fungible token is a token for which an equivalent cannot be found; that is, two NFTs cannot represent the same object. Each NFT is a unique token with a single copy.

Why Buy NFTs?

Buying an NFT most often means buying a unique object of art: it can be a picture, a piece of music, a video clip, game paraphernalia, and so on. Each NFT has its own unique signature that cannot be copied; by buying an NFT you are actually buying the copyright to an item. Buying an NFT is like buying a painting.

As you might have guessed, NFTs are mainly bought either by fans of someone’s art or by collectors; not for commercial reasons, but rather for aesthetic ones. When buying an NFT, you will never know whether the price of the object will increase or depreciate.

Where to Buy NFTs

When answering the question “where to buy NFTs?” it is worth noting the most popular NFT marketplaces: OpenSea, SuperRare, Nifty Gateway, Magic Eden and Rarible, although there are many others.

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However, there are also NFT exhibitions where you can spot promising works and subsequently buy them when they hit the market.

NFTs are purchased with cryptocurrency, so if you want to purchase a non-fungible token, you will need a crypto wallet or an account on a crypto exchange, as well as the cryptocurrency itself (most often Ethereum).

Also, in addition to NFT platforms, there are auctions where buyers set the price themselves. The process of buying at an auction is not much different from buying on a marketplace. If the proposed price suits both the seller and the buyer, then you transfer the required amount of money, and ownership is transferred to you through your crypto wallet.

Things to Consider When Choosing a Marketplace

When choosing a marketplace for purchasing NFTs (non-fungible tokens), there are several key factors to consider:

  • First of all, pay attention to safety: look at the ratings and reviews of other users.

  • Pay attention to the variety of NFTs presented on the marketplace, as some of them may have a narrow specialization in pictures, animations and music of one genre. Find what's right for you.

  • The interface of the site is no less important. Navigation can greatly simplify the process of selecting and purchasing NFTs. Also, for those new to NFTs, the marketplace interface can be especially important.

  • Consider the number of payment methods on the site, as well as the liquidity and the trading volume. This also reflects the reputation of the marketplace.

Step-by-Step Guide to Buying Your First NFT

It can be helpful to take a closer look at how to buy NFT, so below we've provided step-by-step instructions for purchasing your first NFT.

1. Get a Crypto Wallet

Since NFTs are part of the crypto world, most transactions will be made through crypto wallets. You will need a crypto wallet if you don't already have one, as well as tokens, preferably Ethereum, in order to purchase NFTs.

2. Sign Up at an NFT Marketplace

Next, you’ll need to choose a marketplace from which to buy an NFT. Some of the most popular ones include:

  • OpenSea: Considered the largest peer-to-peer marketplace, OpenSea operates on Ethereum and hosts different NFTs and collections.

  • Rarible: Similar to OpenSea, Rarible hosts different pieces straight from the artists themselves so they can sell their original work directly.

  • Axie Marketplace: Axie Infinity is a blockchain-based game where users breed digital pets. You can buy these pets, called “Axies,” on the Axie Marketplace. In addition, you can also buy and sell other game items.

  • SuperRare: SuperRare specializes in digital art. It is also similar to OpenSea and Rarible, in that it is a peer-to-peer network that functions on the Ethereum blockchain.

  • Binance: Binance is one of the largest cryptocurrency exchanges today. But aside from that, they also have their own NFT marketplace featuring art, game items, and more.

  • NBA Top Shot: NBA Top Shot sells NFTs related to your favorite basketball teams in the NBA. These collectibles are licensed, official digital merchandise from the NBA franchise. Think of them as new, high-tech trading cards that are more interactive than your plain old physical cards.

To start buying NFTs, you will have to register an account with your chosen marketplace. You can start by browsing their websites to get a feel of how they work and what tokens are available for sale.

3. Connect Your Wallet to the Marketplace

Once you have an account on the platform, you will need to connect your wallet to that account in order to make trades and transactions.

4. Browse & Bid on NFTs

Now is the time to start searching for an NFT that interests you. We have already mentioned that you can buy an NFT on marketplaces, as well as at auctions. When bidding at an auction, if the price you offer turns out to be the highest, then you take the NFT for yourself, and the amount you offered is debited from your account along with the commissions of the trading platform where the auction took place.

Fees vary by NFT platform, so you will need to do your research before purchasing anything. As for the NFT itself, if you buy it with the goal of later selling it at a higher price, then choose something popular, something designed for the masses. You can also study the artist’s previous works, including their reputation on the market, and then, based on all these factors, make a purchasing decision.

5. Complete the Purchase

When completing a transaction and transferring money to another account, do not forget to carefully check the recipient’s details (address and network), as well as the number of tokens sent. And remember that you cannot cancel a cryptocurrency transaction.

Factors to Consider When Selecting NFTs

The choice of NFT projects must also be taken responsibly. Firstly, you should pay attention to the trading platform itself where you are going to purchase an NFT. Namely, pay attention to tariffs and commissions. Make sure that the rates and commissions you will pay will correspond to the services and goods on the marketplace.

The second point is the marketplace interface. If you are making a purchase for the first time, then it will be much easier for you to navigate a convenient marketplace rather than at auctions, for example. Also pay attention to safety. Unfortunately, the sphere of cryptocurrencies and Web3 already has plenty of cases of fraud, so carefully check the marketplace on which you are going to buy NFTs, and be vigilant.

As for the NFT itself, it is better not to consider this purchase as an investment; the prices of NFTs are even more unpredictable than the prices of cryptocurrencies, so buy NFTs primarily for your own aesthetic pleasure. If you are clearly committed to investing, and want to sell NFTs in the future for more than you bought, then pay attention to rare and popular objects, and also take the time to study the NFT sphere and current trends.

Popular NFT Collections & Trends

Speaking about popular trends in NFTs, one cannot fail to mention the most expensive work, sold for 63 million dollars, “EVERYDAYS: The First 5000 Days” by the artist Beeple. This work represents a collage of 5,000 unique digital drawings. Among other collections, the following are currently the most popular:

  • Doodles. Doodles is a collection from the same guys who brought you CryptoKitties in 2017. This is a collection from three artists under the pseudonyms Tulip, Burnt Toast, and Poopie.

  • Cryptopunks. This is a punk-inspired collection featuring 10,000 drawings of a variety of characters, each with their own twist.

  • The Doggies. This is Snoop Dogg's own collection of 10,000 animated gaming dog avatars. These avatars can be used in blockchain games.

Is Investing in NFTs Worth It?

The NFT market is now rapidly developing: many giant brands are coming to this area for recognition and PR. But despite all this, NFTs as a digital asset still remain volatile and unstable. It's difficult to make any predictions.

You can buy NFTs as an investment if you understand the trends, know rare collections, or if you have an “intuition” for something that will skyrocket in value in the future. NFTs have many similarities with the art field; to put it simply, it is the art of the future. A person who does not understand paintings is unlikely to be able to buy something truly unique.

Thus, if you are not an expert in digital art, then it is better to either refrain from purchasing and just observe and study the market; or buy NFT, but not for commercial purposes, simply for yourself.

The Bottom Line

We hope that our comprehensive guide to NFTs has helped you and answered any questions you might have had. We tried to analyze in as much detail as possible all the intricacies of the NFT sphere. However, looking at the rapid development of NFTs, there is no doubt that this area will change and open up new opportunities and prospects.

FAQs

Do I need to be tech-savvy to buy NFTs?

Of course, you should know the basic aspects of cryptocurrencies and NFT market transactions to at least protect yourself. But there is nothing complicated about it.

What payment methods can I use to purchase NFTs?

NFTs are most often purchased with cryptocurrency, and most often with Ethereum, but some sellers may also offer payment in fiat currency or digital dollars.

Are there any extra fees or taxes associated with buying NFTs?

Yes, there are fees on marketplaces and they vary depending on the marketplace itself. As for taxes, it all depends on the legal aspects of the state in which you buy NFTs.

Is there a minimum amount I need to invest to get started with NFTs?

There is no minimum as such; it depends on what kind of work you want to buy and sell. But considering that the cryptocurrency sphere and everything associated with it has never been adapted for a small budget, then to start buying and selling NFTs you need at least $1,000 (although this is subjective), but small budgets will get you practically nothing.

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