How to buy NFTs

So you want to buy a non-fungible token (NFT). Maybe you’re a technologist who wants a digital art collection to hang in your metaverse office. After all, Bill Gates says that most virtual meetings will take place in the metaverse within the next three years. Maybe you want to find hidden NFT gems to sell for a profit because you expect them to increase in popularity. Or maybe you simply want a piece from the cool new collection as your social media avatar. The reason may be different, but the process remains the same.

NFTs have gone from an obscure computer science concept to registering billions of dollars in sales on popular marketplaces. With the recent explosion of interest, buying and selling NFTs has never been easier. Here we will go over where you can buy them, what the process looks like and what you need to get started. There are many options for all types of NFT buyers. Before you take the plunge, however, there are several things you should consider:

• What type of NFT am I looking for?
• Which blockchain should I use?
• Do I have a Web3 wallet?
• Am I comfortable handling my own private keys?
• What are the fees for buying and selling?
• What can I do with my NFT?

Where to buy NFTs

The first thing you need to do is go to an NFT marketplace. Below is a list of the top five by weekly volume as of March 2023. As you will see, Blur has a significant lead in total traded volume, at over 10 times the level of runner-up OpenSea, the former market leader.

(source: dappradar)

However, this does not mean that you should immediately rush to Blur or Opensea. Most NFTs on OpenSea are EthereumETH
-based, although OpenSea has PolygonMATIC
and SolanaSUN
network entries. Why is this important? Transactions over Ethereum tend to have higher gas fees, the money paid to people who update the blockchain. The Solana network, for example, is capable of processing more transactions despite its smaller size. If an NFT buyer wants to save on network fees, he or she might want to consider a Solana-based exchange like Magic Eden, or focus on listings from a blockchain other than Ethereum. The next section covers wallet options and NFT storage.

After assessing your network, you should start surfing. The beauty of NFT marketplaces is that they allow users to filter collections based on their interests, budget, and a variety of other options. You’ll soon find that marketplaces like Blur, OpenSea, Magic Eden and Nifty Gateway tend to focus on collectibles. For those particularly interested in high-end digital-art NFTs, marketplaces like SupeRare have a more creative flavor; Think of it as a cross between Instagram and Christie’s.

A potential NFT buyer should also consider marketplace fees. Historically, they have typically ranged from 2-5%. However, the emergence of Blur as a usurper to OpenSea has led to fee compression in the NFT industry. Many fees are now trending towards zero as price wars set in. Because marketplaces like Superrare tend to be higher. For example, SuperRare has a 15% fee for sellers (only 3% for buyers).

How to store NFTs

Let’s say you found an Ethereum-based NFT that catches your eye. Great! You now need to have a wallet to store that token. For readers who don’t like the idea of ​​self-storage, the end of this section goes over alternatives to maintaining your own wallet.

The most popular Ethereum wallet is MetaMask. A counterpart from Solana is the Phantom. These wallets act as gateways to the Web3 world. Just follow the instructions to download a wallet and always remember that these are decentralized and there is no way to recover your holdings if you lose both the private key and the seed phrase, which works similarly to passwords.

When you create your wallet, you will receive a secret 12-word recovery code, which is the starting point. Remember to write these words down. In case you forget your password and need to recover your wallet, you can use your seed phrase or private key to do so. Don’t share with anyone either. If someone knows your passphrase or keys, they can access your wallet.

If all this talk of private keys and seed phrases seems complicated, don’t worry. Some NFT marketplaces offer wallet services that hold your NFTs for you. Most crypto purists would argue that you don’t truly own a digital asset if it is held in the custody of a third party who has your private key. However, many of these exchanges are reputable and have robust security measures. Binance and Nifty Gateway’s Omnibus Wallet are two services that handle custody for you. Users can also pay by credit card or link their bank accounts for ease of use.

Funding your wallet

NFT marketplaces such as OpenSea or SuperRare are based on smart contracts. Therefore, you need to send crypto to your Web3 wallet to get started. You can do this by buying crypto on a centralized exchange like CoinbaseCOIN
Kraken or Gemini, and transfer it.

These exchanges will have an option to send and withdraw money. To fund your metamask with Ethereum, copy and paste your wallet address into the “send to” line. Ethereum wallet addresses have a 0xZRX
followed by 40 characters. Transactions will take anywhere from 15 seconds to five minutes to settle, and you can always check the status on etherscan.io.

Make a purchase

With a funded wallet, you now have everything you need to buy an NFT. For marketplaces like Coinbase NFT, Magic Eden or SupeRrare, the first step is to connect to your wallet. Some marketplaces will ask for basic customer information such as name and email address.

After finding an NFT that you are interested in buying, the easiest way to make a purchase is through the “Buy Now” feature. After clicking buy now and accepting the payment, you will confirm the transaction with your wallet. You will receive a confirmation that the NFT was purchased by you. As a secondary verification, you can view your profile on the marketplace to see all NFTs in your wallet.

Another option is to use the “Bid” function. Like eBay, potential NFT buyers can bid to buy an NFT for less than the asking price. The seller has the option to accept the offer or let it expire. If the NFT is an item you really want to buy, it may not be the wisest thing to bid on, as there is no guarantee that the seller will accept. But if the seller accepts your offer, you’ve just secured a NFT at a discount to the listed price.

Instead of asking for a price in advance, some NFT sellers list their pieces through auctions. In such cases, there will be a minimum bid, a reserve price or highest bid allowed, and a countdown to when the auction ends. Provided that the minimum bid was met, the NFT goes to the highest bidder at the end of the auction. Below is an example of a Bored Ape Yacht Club NFT temporarily listed on Opensea. Users have the option to buy immediately for a quote or make an offer to the seller.