7 Things to Keep in Mind Before Buying Your First NFT
A Non-fungible token (NFT) is a digital unit which validates a digital asset as unique and it can’t be interchanged. It is maintained on a digital platform called a blockchain. NFTs can be used to encode photos, pictures, audio, as well as other types of digital information. They’re frequently encoded using the same technology as many cryptosystems. Because NFTs appear to become the new Bitcoins just on block in levels of buzz, anyone might like to explore selling or buying NFT assets. However, there really are a few key considerations to make before proceeding.
If you’re thinking about buying your first NFT, read the following tips carefully. It has the potential to save you time, effort, as well as money!
7 Things to Keep in Mind Before Buying Your First NFT
Here is the list of the 7 most important things to remember while purchasing your first NFT:
1. Be aware of what you’re purchasing
Knowing what you’re getting before you purchase something is definitely a good idea. Because every transaction is eternally recorded publicly, an NFT is a one-of-a-kind digital work of art where ownership will never be in doubt. Isn’t it simple?
An NFT could be anything. Whether it’s a stunning 3D landscape, a charming pixelated animated corgi, or maybe even a colored rock, there’s something for everyone. NFTs are being produced by sports leagues such as the NBA, and also musical NFTs by famous artists such as Calvin Harris.
The transaction of purchasing an NFT is documented on the “blockchain.” Since it is, you could consider the blockchain as that of the world’s most powerful tracking system. Whenever you look into the history of any NFT, you could see the blockchain in operation. You could see when the artist who created or “minted” the artwork, when they placed it for sale, and then when it was bought.
2. Safely set up a cryptocurrency wallet
You’ve learned what an NFT is and are ready to go on to the fun part! The first thing you’ll need is something known as a crypto wallet. This would not only serve as a storage location for cryptocurrencies like Ethereum, but it would also serve as your online identity for sharing NFTs.
MetaMask is among the most popular Ethereum-based cryptocurrency wallets. It’s available as a browser extension as well as a mobile phone application. Many users prefer MetaMask since it is among the most extensively used online wallets and so it integrates well with NFT marketplaces like OpenSea as well as Rarible.
How to Setup a MetaMask Account?
- Go to https://metamask.io/ and select “Download Now.”
- Choose whether to install MetaMask on your computer or on your smartphone.
- In this situation, we’ll use Chrome to download this as a browser extension. Select “Install MetaMask for Chrome” from the drop-down menu.
- To download the extension, click “Add to Chrome” then follow the procedure.
- MetaMask would show in your browser once you install the MetaMask plugin. Select “Get Started” from the drop-down menu.
- Choose “Create a wallet” from this menu.
- There will be a data sharing option available. This really is totally up to you and is fully optional. Your option has no bearing on how MetaMask is used.
- Make a password for yourself. Please choose a secure password.
- MetaMask will next request you to verify that you’ve directly placed your secret backup phrase by placing the information in the correct sequence. Try clicking the words for your phrase in the sequence they display.
- You’ve completed the task!
3. Carefully deposit funds in your cryptocurrency wallet.
So as you now understand what NFTs are as well as you’ve set up your first cryptocurrency wallet, but you’ll need to do something to pay with in order to acquire your first NFT! Let’s fix the fact that you’re crypto-broken right now.
The quickest way to get money into your MetaMask account is to use one of built-in solutions, including such Wyre, that lets you buy Ethereum with your debit card. This, nevertheless, may not be the most cost-effective option.
Most people prefer to utilise a particular cryptocurrency exchange because they have lower service fees. To acquire Ethereum, go to a reliable cryptocurrency exchange like Coinbase (accessible in most countries) and Netcoins (only for Canadians). Many people in the cryptocurrency world trust either of these sites, and it’s always a smart idea to do your own research.
You’ll need to perform the following functions:
- Make a user account.
- Put some standard currency in your account (USD, EUR, or CAD).
- Exchange your fiat currency for Ethereum.
- Deposit Ethereum to your MetaMask account from Coinbase or Netcoins.
4. Look for your first NFT that you’d like to purchase.
It may sound ridiculous to suggest in an article regarding purchasing NFTs that you’ll need to select an NFT to purchase, but finding one might be difficult when there are so many options! You can purchase your first NFT from various platforms given below:
- You can use an NFT Global market such as Rarible, OpenSea, or Foundation are examples of NFT marketplaces.
- Twitter is the primary social media platform for the NFT community. You can get inspiration from a variety of NFT accounts as well as hashtags.
- Seeing another person’s collection. Seeing what’s in someone else’s collection can sometimes motivate you.
- Purchasing your first NFT from Instagram posts from a well known creator with thousands of followers.
Then, choose the best though the first NFT as per your choice.
5. See the Seller Verification Mark
After choosing your first NFT, you should see the seller verification before buying the NFT on any online marketplace. Legitimate sellers on platforms such as OpenSea will also have a blue verification tick beside their online handle, similar to Twitter or Instagram, to show that they can be recognized and are therefore not impostor accounts. If you want to purchase from a well-known seller, such as World of Women or Cool Cats NFT, make absolutely sure the profile is verified.
Yet, the verification mark cannot always be utilised to verify the seller’s validity. Many reputable NFT sellers still do not have their verification tick on some sites, much as certain social media celebrities do not already have their verification click. If you intend to buy from such an unverified profile, verify the NFT characteristics as a precaution.
Examine the seller’s social media profiles to see whether they have a large following plus a verification tick, as this may indicate their legitimacy. You can also look at their sales statistics to discover if it’s a long-established account offering your desired though first NFT or if it’s a new account.
6. Consider the NFT Liquidity and Market Volume
It’s vital to remember that NFTs might not have the same liquidity like crypto coins. Because you can’t convert an NFT into regular cash as readily as you can with cryptocurrencies, this could be a difficulty for anyone looking to benefit from them. To boost your NFTs’ liquidity rates, several experts recommend fractionalizing them, which is dividing your NFT into tiny pieces.
In addition to liquidity, the NFT industry’s market volume should be considered. NFT market volume’s increase or fall is highly reliant on the type of NFTs acquired on a regular basis. As you may be aware, the NFT industry is still in its infancy. So it is always to consider the liquidity and the market volume of your chosen though first NFT.
7. Consider the Seller’s Other NFTs’ Price Performance
It is always important to check the seller’s profile if you really want to make sure your selected NFT is a great investment. You may check through their prior sales to see how much their items have sold for. After that, you can browse down the rankings of how much the same NFTs sold several weeks or months ago. See the floor price which is the lowest price at which NFTs are traded at.
This will give you a decent understanding of how NFT prices fluctuate as well as whether they correspond to what you want to see in your selected NFT in the upcoming times.
Some platforms provide similar information, and other statistics that you may not be able to get on the marketplace. Websites like NFT Stats as well as CoinMarketCap have some fascinating data about NFT sales, value, growth, and much more, so remember to check them out if you want to learn more. So it is always important to consider the seller’s other NFT’s price performance before buying your first NFT.
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How to Purchase your First NFT?
You’ve got your ETH in your crypto wallet, you understand which first NFT you want to purchase, and you’re familiar with how to check that the chosen though your first NFT is valid or not, so let’s get started!
The procedures below are with the most typical sort of sale, in which you acquire your first NFT for a predetermined price. All other sale kinds, on the other hand, follow a similar pattern.
The following are the steps to purchasing your first NFT:
We’ll walk you through the 4 stages of buying the first NFT below:
- By linking your wallet, you can create an account.
- Check your order by clicking “Buy Now.”
- In your cryptocurrency wallet, confirm the payment.
- Waiting for your blockchain transaction to be verified.
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Is it possible to generate money with NFT?
Yes, it is correct. Professional artists as well as content creators have a unique potential to monetise their digital creations as well as products because of the blockchain technology from non-fungible tokens (NFTs).
The fact that such an artist or content producer who produces artwork on the blockchain doesn’t really require the usage of an art gallery, store, or museum is just what makes NFT art so outstanding. To generate money, he doesn’t need an agency or even a substantial proportion of followers on social media.
Another distinction is that if an artist’s work is sold again on the secondary market, he can get money, usually in the range of 5 to 10% royalties, and his copyrights are safeguarded. NFT art can be viewed as both a short-term and long-term investment.
Video: How to Find NFTs Early and Sell For Profit?
As you may be aware, the NFT industry is still in its infancy. We didn’t hear much more about NFTs a few decades ago, and we didn’t see all these virtual artworks sell for millions of dollars. And, like many other organisations or businesses that appear to sprout out of nowhere, the peak might be fleeting. If you want to acquire an NFT as a big investment rather than something to hold as an artistic work or sell within a few months, you should keep these things in mind to purchase your first NFT.
NFTs Can Be a Wise Investment, but It really is better to be safe. Whereas purchasing and selling NFTs can provide large profits, there are numerous faults you can commit when making buying decisions. Cybercriminals are presently exploiting the NFT market in significant ways, and certain NFTs are obviously isn’t worth purchasing. So, before you finish your deal, remember to consider each one of the factors listed above.