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Cryptocurrency News Articles
How to Buy NFTs: A Beginner's Guide to Understanding and Purchasing Non-Fungible Tokens
Oct 04, 2024 at 12:48 pm
Entering the NFT space can seem complex, but understanding how to buy NFTs is essential as the market is projected to reach a staggering USD 222.79 billion by 2031
The world of NFTs, or Non-Fungible Tokens, has seen a surge in popularity over the past few years. These unique digital assets have captivated the attention of collectors, artists, and investors alike, thanks to their ability to represent ownership of anything from digital art to virtual real estate. If you're new to the NFT scene and wondering how to get started, this beginner's guide will provide you with all the essential steps and tips to confidently buy your first NFT.
What are NFTs?
Before delving into the buying process, let's quickly understand what NFTs are. They are digital assets that are stored on a blockchain, typically the Ethereum blockchain. Each NFT represents a unique item and cannot be directly interchanged with another NFT. This differs from cryptocurrencies like BTC or ETH, which are fungible and can be exchanged at equal value.
When you purchase an NFT, you're not just buying the artwork or item itself; you're also acquiring ownership rights that are verified by the blockchain. This creates a transparent and tamper-proof record of ownership for virtual assets.
Key Requirements for Buying NFTs
To begin your NFT journey, there are certain requirements you'll need to fulfill. These include using a crypto wallet, buying the necessary cryptocurrency, and creating an account on a suitable NFT marketplace.
1. Choosing a Crypto Wallet
When it comes to buying NFTs, selecting the right crypto wallet is crucial. You can choose between two main types: hot wallets and cold wallets.
a) Hot Wallets
Hot wallets are digital wallets that connect to the internet. They're usually more convenient to use since they provide quick access to your NFTs and assets. Some popular hot wallets for storing NFTs include MetaMask, Trust Wallet, and Coinbase Wallet.
b) Cold Wallets
Cold wallets, on the other hand, are offline devices that hold cryptocurrency and NFTs. They offer increased security because they're not linked to the internet. Some well-known NFT cold wallets include Ledger Nano X and Trezor Safe 5.
2. Setting Up and Funding Your Wallet
Once you've decided on a crypto wallet, the next step is to set it up and fund it with either Ethereum or other coins. Most wallets have a straightforward setup process that includes creating an account, storing your private keys securely, and setting up a recovery phrase.
3. Where to Buy NFTs: Best NFT Marketplaces
Now that you have a digital currency wallet and cryptocurrency, the next step is to choose a marketplace to purchase NFTs. There are multiple markets for NFT trading, each with its own set of features, NFT types, and blockchain compatibility.
a) OpenSea
OpenSea is the largest and most popular NFT marketplace with over $39 billion in trading volume (source: Dune Analytics). It also boasts of being the first NFT marketplace that supports a broad variety of NFTs, such as digital artwork, music, and virtual property.
OpenSea primarily uses the Ethereum blockchain, but it also supports alternative blockchains like Polygon. The platform is easy to navigate, making it an excellent platform for beginners. OpenSea charges a 2.5% transaction fee on NFT sales.
b) Rarible
Rarible is a decentralized NFT platform where users can purchase and trade NFTs across several categories. It has a distinctive feature of allowing users to mint their own NFTs without knowing how to code.
Rarible supports multiple blockchains, including Ethereum, Flow, and Tezos, giving buyers a more diverse range of NFTs. The platform also has a community governance approach, where users can vote on platform upgrades and changes.
c) Magic Eden
Magic Eden is a marketplace dedicated to Solana-based NFTs. It has lower transaction fees and faster transactions compared to Ethereum-based markets because of the Solana blockchain’s performance.
Magic Eden is ideal for buyers seeking gaming-related NFTs or low-cost alternatives to Ethereum-based marketplaces. However, it also supports Bitcoin NFTs.
d) Binance NFT
Binance NFT marketplace is connected with the Binance cryptocurrency exchange, allowing current Binance users to easily buy and sell NFTs. The site provides a diverse range of NFTs, including those relating to art, music, and gaming.
Binance NFT supports several blockchains, including Ethereum and BNB Smart Chain (BSC). One of the benefits of utilizing it is that the NFT transaction fees are cheaper than on other platforms, and you can make purchases with Binance’s native currency (BNB).
e) Niche Marketplaces (for specific NFT types)
In addition to the major NFT platforms, there are several niche marketplaces that cater to specific types of NFTs. For instance:
- Art Blocks: For generative art NFTs
- SuperRare: For digital art NFTs by renowned artists
- Foundation: For limited-edition NFTs from emerging creators
- NBA Top Shot: For officially licensed NBA basketball NFTs
- Decentraland: For NFTs representing virtual land and assets in the Decentraland metaverseWhat does Minting an NFT mean?
Minting refers to the process of creating
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