Non-fungible tokens, or NFTs, are digital assets with a digital signature that makes them one-of-a-kind. The asset can be replicated, but the record of ownership of that asset is securely stored on a public ledger where everyone can see the certificate of ownership.
Many artists, musicians, and celebrities are cashing in on this trend by creating their own NFTs and selling them on various platforms. Everything from music to memes to sports memorabilia can be found here. If you want to buy them, all you need is a cryptocurrency wallet or an account with a cryptocurrency exchange like WazirX or Binance.
How to buy an NFT
The majority of NFT transactions take place in a specialized marketplace. Here’s a step-by-step guide to purchasing these digital assets from there.
- Currently, most marketplaces use the Ethereum network to power their transactions. To purchase an NFT, you will need Ethereum’s native token Ether. If you do not have it, you can open an account with an exchange such as WazirX or Binance and buy the tokens there.
- You’ll also need to set up an Ethereum-compatible crypto wallet. A crypto wallet is a digital address where cryptocurrencies can be stored. Wallets can be created using platforms such as Metamask, Binance, or Coindesk. To open a wallet with the platform of your choice, you must first register on their website. After you open the wallet, you must send the ether you purchased from the exchange to the wallet’s address.
- Choose the marketplace where you want to purchase the NFT. There are numerous markets for NFTs. OpenSea, Rarible, SuperRare, and Foundation are some of the most popular NFT marketplaces.
- Create an account on the marketplace of your choice. The registration processes for various marketplaces differ.
- Link your wallet to the marketplace. On the platform, most marketplaces have a simple ‘Connect wallet’ option.
- Browse the market and select an NFT that appeals to you. Most marketplaces use an auction system to purchase NFTs; you must bid for the NFT you want.
- Following a successful bid, you will complete the transaction and the required amount will be deducted from your wallet. Keep in mind that you may be required to pay a transaction fee to the marketplace, but the fee will vary depending on the marketplace.
Should you put your money into an NFT?
The NFT market is a speculative market that is fueled by scarcity and FOMO (fear of missing out). There is no guarantee that the NFT you purchase will appreciate over time. However, if you want to support an independent artist and have a healthy appetite for losses, they can be a nice addition to your digital library.