Based on everything you now know about NFTs, it might seem rather difficult to purchase one. It isn’t as simple as just buying ether, the native cryptocurrency of the Ethereum blockchain. You can’t buy NFTs through crypto exchanges (although Coinbase is working on its own marketplace for NFTs), so you’ll have to look elsewhere. Here’s a step-by-step process of how to buy these digital tokens.
- Set up a crypto wallet and buy some cryptocurrency. You’ll need one that’s compatible with the Ethereum blockchain because NFTs are almost always on Ethereum. Once your wallet is set up, buy some ether.
- Look at some NFT marketplaces. The most popular one right now is OpenSea.io, which touts itself as a seller of “rare digital items and collectibles.” Other reputable NFT marketplaces include Rarible, Axie, SuperRare, Nifty Gateway, Mintable, and Foundation.
- Search for the NFT you want to buy. Most of the above marketplaces allow you to browse NFTs by category.
- Place a bid on the NFT you want. Most NFT marketplaces function like auction houses.
One thing you should pay attention to if buying NFTs is the gas fees. If you haven’t transacted in ether before, you should be aware that they come with an additional gas fee, which is the amount of money paid to carry out the transaction. Some NFT buyers have paid more in gas fees than they did for the NFT, so you might want to hold off on your purchase if gas fees are high to see if they come back down.
If you don’t want to buy NFTs outright, you could consider investing in them in other ways, like through an investment in a venture capital fund that’s investing in NFTs and crypto infrastructure. However, you will have to be an accredited investor to go the VC route.
If you aren’t accredited, you have other options, like buying an NFT-focused exchange-traded fund like the Defiance Digital Revolution ETF, which invests in blockchain, cryptocurrency, and NFT stocks.
Should you buy NFTs?
The decision of whether to buy NFTs should be approached with care. This kind of investment isn’t for everyone, and it’s extremely risky. If you are purchasing NFTs because you think the price will go up, you might want to rethink your investment.
On the other hand, if you’ve come across a digital piece of artwork that means a lot to you, it may be worth the investment from a sentimental point of view. You might also want to financially support the artist so that they can keep doing their art.
Additionally, Kris Barton, chief product officer of Gannett, thinks NFTs provides a great opportunity to further build community and share compelling content, although he thinks this opportunity could manifest itself in different ways.
“We will continue to monitor the space as it continues to develop, but NFTs are a part of a more significant opportunity to engage new audiences in creative and innovative ways. Gannett sees opportunities with NFTs to encapsulate moments in time, which may attract large or niche audiences, and as a draw for subscriptions using creative bundles.”
Ultimately, NFTs are only worth whatever someone is willing to pay for them, so if you can’t resell an NFT you paid good money for, it will be essentially worthless. While cryptocurrencies are speculative investments, NFTs are even more so, making them extremely risky. It’s never a good idea to invest money you can’t afford to lose.
(Views expressed are of the author Ari Zoldon and do not necessarily reflect Nasdaq or BusinessToday)
