What are NFTs
If you keep asking yourself how to buy NFT without stepping into the many pitfalls along the way, our guide has got you covered. Before we dive in, let’s take a look at the subject at hand.
NFT stands for _non-fungible-token_, which is a unique, irreplaceable unit of code running on a blockchain. Unlike fungible tokens like Bitcoin, each NFT is unique and not interchangeable.
NFTs first gained popularity when artists started using them to digitize their artwork. Thanks to the sheer endless creativity that floats around blockchains today, you can easily learn how to buy NFTs and become an art patron in no time.
We will cover everything you need to know to purchase your first NFT and start the next section with some initial knowledge before jumping into the world of Web3 and NFTs.
Before You Buy NFTs: What to Know in Advance
NFTs are part of the fast-moving crypto space, and new projects and use-cases for these digital assets evolve daily. There are important steps to be taken to learn how to buy NFT art.
If you are just starting and don’t know about investing in NFTs, we suggest reading our guide about how to invest in NFTs to find out how to find the best ones.
The NFT market – Riding The Rollercoaster
The NFT space is far from being as stable as established markets. This means there is lots of price movement for NFT projects, creating massive volatility.
The essential rule you have to internalize when learning how to buy NFTs is that you should never invest money that you can’t afford to lose. It is easy to get caught up in the hype when investing in an NFT project, but it is crucial to calculate your budget before investing because of the volatility involved.
Another trap you want to avoid falling for when buying NFTs is scams. There are few spaces in Web3 where it is easier to lose money to a scammer than in NFTs. Always remember that behind every purchase there is an investment that you don’t want to lose.
NFT projects should have a website describing the project and its roadmap, functioning social-media accounts, and a buzzing community around them. Always check their website and social channels like discord to be certain you are buying the actual NFT and not a fake version of it.
How to Buy NFT Art – First Steps
Before we cover the details about buying NFTs, let us take a closer look at the preliminary steps that go hand in hand before making your first purchase.
You will only need two things to start, a software wallet to store your NFTs and the corresponding cryptocurrency to buy them. No matter if you wonder how to buy NFTs on OpenSea or any other marketplace, a wallet will keep your assets in a safe place.
Please don’t hesitate to check out our guide on the best NFT wallets if you wonder which one is best for you. The next step is funding your wallet with enough crypto to buy your first NFT.
There are numerous places to buy cryptocurrencies, but the best ones are usually the corresponding platforms a wallet runs on. Metamask, for example, offers users to buy crypto directly via different on-ramp services. Using these services is very handy as you wouldn’t even have to transfer your coins to your wallet.
Alternatively, you could transfer your cryptocurrencies directly to your wallet by using one of the many exchanges to buy crypto first and then sending it to your wallet.
In our next section, we will explain the different ways how to buy NFT art, hang on to find out what minting and secondary markets have in common.
Minting NFTs vs Trading – The Choice is Yours
The two main ways to purchase NFTs are minting or trading them on the secondary market.
Let’s clear up what minting is before we go further. Minting was first used in manufacturing coins and is a technique to „stamp“ a coin to grant its origin.
In our case, minting publishes an asset of data onto a blockchain, that relates it to its origin and guarantees its authenticity. We will cover in-depth knowledge about the minting process in NFTs later on, but this should give you an idea of how NFTs find their way to the secondary market.
How to Purchase NFT on The Secondary Market
The secondary market is the place where you buy NFTs that are already minted to the blockchain. There are countless different marketplaces, but we will cover all crucial facets, so you know how to buy NFTs on Opensea and other marketplaces alike.
Many crypto exchanges offer NFT marketplaces nowadays. There is little difference on how to buy NFTs from Binance or other marketplaces, but the blockchain these NFTs run on.
This guide will show you everything you need to know about how to buy NFTs on the secondary market. After completing it, you’ll be able to find out how to buy NFTs on Coinbase or places like Robinhood or Wazirx.
A Step-by-step Tutorial on How to Buy Your First NFT
This section is a step-by-step guide that will show you the technical side of how to buy NFT art.
- Connect your wallet—You can easily connect your Web3 wallet by clicking on the wallet button located in the header section of the marketplace
- Find the NFT you want to purchase—The choice is yours, browse the marketplace for its collections or directly search for a collection you like to invest in
- Buying the NFT—When you’ve found what you are looking for, choose one of the buying options to purchase it directly or make an offer or bid, depending on the auction type (more on buying options in the next section)
- Sign the smart contract—When purchasing an NFT for the first time, you will have to sign a smart contract to allow assets to be transferred to your wallet. This process takes seconds and rarely costs any gas fees.
Buying Options
When you’re asking yourself how to buy cheap NFTs, you have to be able to tell apart the different options of purchasing NFTs.
- Buy now—Purchasing an NFT at a fixed price. Typically, this type of transaction will create gas fees which can get very high depending on the blockchain your NFT was minted on
- Offer—If an NFT is not listed for sale or the asking price is too high for you, you can simply make an offer to buy the NFT at a price you decide on. Keep in mind that an offer will be open for as long as it doesn’t get rejected, canceled, or expires.
- English auction—Like on classic auction platforms, this type of auction will make the highest bidder the new owner of the NFT in question. Understanding how to buy NFTs in an English auction is making the best of the most exciting concept of buying NFT art. The biggest NFT auctions created a turnover of over 60 million US-Dollar
- Dutch auction—This type of auction differentiates itself from the English auction by setting a maximum and minimum price beforehand and letting the auction run for its predetermined time from top to the minimal price
A Word on Rarity in NFTs
One of NFT’s main features is that they are scarce assets. Each NFT is either a single piece of artwork or has a unique combination of properties that sets it aside from other ones in a collection.
Depending on the rarity, the price of an NFT can go as high as millions of Dollars. If you know how to buy NFTs cheap and sell them at a higher price, you mastered a technique that is an art form by itself.
But fear not, there are a variety of platforms that let you check the rarity score of your NFT. Naming them all would go beyond this guide, but we suggest you start with rarity sniper because it is an easy-to-use platform that has a lot of collections linked to it.
Gas Fees – Hidden Costs in NFTs
Gas fees are transaction costs that occur whenever you interact with a smart contract on a blockchain. These fees are used to reward the people who make the blockchain work by providing computation power, for example.
These dreaded fees have to be calculated into the price of an NFT before you purchase it. If you want to find out how to buy cheap NFTs, it won’t hurt to check on which blockchain they run and what gas fees look like at the moment of buying.
Many websites let you check for gas prices, just google the name of the corresponding blockchain combined with the keyword „gas price“ and you’ll find out about the state of transaction costs at any moment.
How to Prove Ownership of NFTs
By now, you will know how to purchase NFTs and how to find them on the secondary market. One important thing we didn’t cover yet is how to check if you own the NFT, aka if the asset in question was transferred to your wallet correctly.
The easiest way to check if you own an NFT is by opening the website of the marketplace you got it from and checking your profile. Does it show up there? If your answer is yes, you’re good.
Occasionally, an NFT may sit in your wallet but isn’t visible on your profile. If this happens, you have the option to check out your account on the blockchain your wallet is connected to.
For example, imagine you found out how to buy cryptopunks and have been able to snag one, and it didn’t show up in your OpenSea profile. In this case, you can check out the website Etherscan and search for your wallet address. Your NFT would show up in the „Erc721 Tokens“ section and show up a bit later in your corresponding marketplace profile too.