How do I start investing in NFT crypto coins? The first and foremost question posed by everyone while commencing upon the journey of crypto currency investment. Secondly, is NFT crypto really a good investment or not?
Let us primarily understand what exactly NFT is and where to invest in NFT crypto for good returns. Non-fungible tokens or NFTs appear to have exploded from the ether.
These digital assets, which range from art and music to tacos and toilet paper, are selling like 17th-century exotic Dutch tulips, fetching millions of dollars.
Are NFTs, on the other hand, worth the money—or merely the hype? Some analysts believe NFTs, like the dotcom mania and Beanie Babies, are about to burst. While others feel that NFTs are here to stay and will forever revolutionize crypto currency investment.
A digital asset that depicts real-world objects like art, music, in-game items, and films is known as an NFT. They’re bought and traded online, often using crypto currency, and they’re usually encoded with the same software as many other cryptos.
Despite the fact that they’ve been there since 2014, NFTs are gaining popularity currently as a popular means to buy and sell digital artwork. Since November 2017, a whopping $174 million has been spent on NFTs.
As the value of crypto currencies and other digital assets has soared, artists, collectors, and speculators have flocked to the movement. The jury is still out on whether this is the start of a new long-term investment asset class or an unsustainable bubble about to burst.
However, NFTs show promise for artists and can be used in the commercial world.
Crypto currencies and physical money are both “fungible,” meaning they may be traded or exchanged for one another. They’re also worth the same amount of money—one dollar is always worth another dollar, and one Bitcoin is always worth another Bitcoin.
The fungibility of cryptocurrency makes it a secure way to execute blockchain transactions. NFTs aren’t like other materials. Each contains a digital signature that prevents NFTs from being substituted for or compared to one another.
NFTs are purchased and sold in an NFT marketplace designed exclusively for blockchain transactions. Due to the scarcity paradigm, NFTs can cost anything from a few dollars to millions of dollars for a digital asset.
To purchase NFTs, you’ll need to have a cryptocurrency and knowledge of the investment marketplace. Following are the best ways that should be adopted while investing in NFTs:
- Research the available NFTs
You should select an NFT that you believe has an upside value potential. The NFT can be a piece of art, music, video, or even a video game item. NFTs can be found by searching Google or Twitter or Cointiko.com. Rarity tools and NFTcatcher.io both feature an up-to-date list of Ethereum and Solana NFTs that will be launched soon.
When looking at upcoming NFTs, take note of the date of the sale, the crypto currency requirements, and the number of NFTs being sold. This allows you to better comprehend the scarcity of the option you’ve chosen. Also cross examine whether it is off or on-chain NFTs and also try to seek the team behind.
- To buy cryptocurrency, choose a broker or an exchange.
To obtain the NFT, you must first purchase the coin. The majority of NFTs are acquired with Ethereum, with a few outliers. A dedicated crypto exchange, such as Coinbase (COIN), Robinhood (HOOD), Gemini, Binance. US, or Kraken, can help you buy Ethereum and other cryptocurrencies.
A crypto currency brokerage is a company or individual that acts as a middleman to help people acquire and sell crypto currencies. An exchange is a web-based marketplace where buyers and sellers trade based on current market conditions.
When purchasing crypto currencies, be mindful that fees are an important factor to consider. For a trade of $10 or less, Coinbase, for example, charges $0.99. The larger the trade, the higher the cost. For crypto trading, SoFi Active Invest costs up to 1.25 percent.
Fees can be a flat rate per trade or a percentage of an account’s 30-day trading volume. Examine costs based on the transaction sizes you intend to undertake to obtain an idea of how much you’ll spend.
Choose a Marketplace to buy your NFT. The NFT is bought and traded on the marketplace. You register and connect your crypto wallet once you’ve found the correct marketplace where your NFT will be put on sale.
Each marketplace has its own set of requirements for crypto wallets. An NFT marketplace will either sell the item for a fixed price or perform a token auction. Among the most popular marketplaces are:
- OpenSea: OpenSea is an Ethereum-based marketplace for non-fungible tokens. Users can trade non-fungible tokens for cryptocurrency by interacting with the network. It has a wide range of digital treasures, including video game artifacts and digital artwork.
A web3 cryptocurrency wallet, such as MetaMask, is required to use the platform. Your Ethereum wallet address serves as a login and password for certain services, such as OpenSea. You’re ready to start browsing the market and placing bids once you’ve connected your wallet!
- Ledger: Also known as hardware Ledger is a wallet that can hold a wide range of NFTs cryptocurrencies. If you’re investing a considerable amount of money in NFTs, you should use a hardware wallet to protect your funds.
Software wallets lack the same security features, and hacks are sadly widespread in the NFT market. A Ledger Nano S costs $59, which is a wonderful deal for protecting your digital valuables.
- Metamask: MetaMask is an Ethereum wallet that can be accessed using a Chrome extension or a mobile app. You’ll need an Ethereum wallet to sign up for OpenSea and other NFT sites.
Link your MetaMask to a Ledger hardware wallet for optimum protection and to reduce the chance of hacking. Simply download MetaMask, create a wallet, then send the ETH you just bought from Coinbase over to it.
- Larva Labs is a firm that specializes in research and development.
Make sure you have enough cryptocurrency to complete the transaction, including any costs. Fees can include the price of purchasing and transferring cryptocurrency, as well as the costs of converting one cryptocurrency to another and gas fees. The payments given to miners in return for their computational power are known as gas fees.
When you buy NFT, you can store it in a crypto wallet on the same blockchain, on another blockchain, or in decentralized storage. Because the NFT is digital, it can only be viewed on a screen, which is frequently done as part of a website. While you own the NFT, you don’t usually own the copyright to the original item, which means you can’t reproduce it or prosecute someone for copyright infringement.
The following are some prominent examples of crypto storage wallets for NFTs:
- Alpha Wallet is a wallet that allows you to keep track
- SuperRare is an NFT social network. Each piece on the platform is one-of-a-kind, and users can buy these one-of-a-kind items on the platform’s website. Because the platform uses the Ethereum network, you’ll need to finance your account with Eth tokens before you can make a purchase.
- Nifty Gateway, an NFT marketplace, is completely owned by Gemini. Popular artists such as Steve Aoki, Grimes, 3LAU, and others collaborate with the platform to release artwork on the major marketplace.
Collectors can also resell artwork on the company’s secondary marketplace. You can fill your Nifty account with Ethereum or straight on the website with a credit card.
- NBA Top Shot is an online store that sells officially approved NBA items. These digital goods are a fresh twist on basketball cards; unlike standard trading cards, these digital cards are more interactive. The cards, for example, show in-game highlights of the featured players.
A LeBron James Dunk card, which showed a clip of James dunking on the Houston Rockets and sold for nearly $200,000, was the most expensive card sold on NBA Top Shot.
How to purchase your NFT
After you’ve financed your account, purchasing an NFT is a simple process. Because most marketplaces operate on an auction basis, you’ll need to place a bid for the NFT you want to buy. For NFTs with several prints, certain marketplaces operate more like an exchange, employing the highest bid and lowest ask.
The possible resale value of an NFT purchased from the primary marketplace is one of the advantages of doing so. Some high-demand NFTs will sell for 5 to 10 times their initial price soon after they are released.
The disadvantage of purchasing NFTs in the secondary market is that it is difficult to predict demand. You can also compare prices of old sales to invest wisely.
Once you own an NFT, you have complete control over the digital asset. You can keep it as a collectible, put it on display for others to see, or include it into a larger digital project. You can also put it on the market. NFT sales incur a fee on marketplaces.
Because the block chain processing required to verify the NFT requires energy, these fees can fluctuate depending on the block chain network the NFT employs.
To sell a digital asset you hold, you must first upload it to your preferred marketplace, assuming the marketplace supports the blockchain that the NFT was built on. You can then opt to list it for sale at a fixed price.
The asset will be verified by the marketplace once it has been posted. Following the sale, the marketplace will send the NFT from the seller to the buyer, as well as crypto money to your wallet, minus the listing charge and other block chain computing expenses.
Hence, as NFTs aren’t exchangeable, they don’t behave like traditional crypto currencies. Non fungible tokens, on the other hand, are one-of-a-kind tokens used to validate the validity of digital media. NFTs could be used to tokenize real-world assets in the future, making transactions more efficient and transparent.