How to Buy an NFT: A Beginner's Guide – Business Insider

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NFTs are non-fungible tokens, which means they’re one-of-a-kind digital assets that cannot be replicated. They grant or link ownership to specific items or goods, such as artwork, music, or videos. 
“There are two ways to think about NFTs,” says Rob Petrozzo, chief product officer and co-founder of Rally, an alternative asset investment platform. “They present the opportunity to create new experiences or collectibles,” he says, “or, they’re a new version of everything that we buy — we can now transact without middlemen” using blockchain technology.
As an example of that concept, Petrozzo says NFTs, “can be a concert ticket or a piece of art.”
What prospective NFT investors need to know, in other words, is that NFTs essentially serve as proof of ownership over some type of asset, and often, they give their owners certain types of perks and benefits, too, such as access to exclusive events.
However, buying NFTs, for the uninitiated, can be an opaque process. Here, we’ll walk through the main steps that you should consider before buying any.
Important: Though enthusiasm for NFTs cooled in tandem with the “crypto winter” during most of 2022, there are still plenty of scammers engaging in pump-and-dump schemes, among other things. Investors should always look very carefully into an NFT project before making a purchase.
Buying and selling NFTs isn’t all that different from buying or selling cryptocurrency, in many respects. 
“NFTs are generally sold on NFT marketplaces,” says Lisa Teh, cofounder of Mooning, an Australia-based Web3 marketing agency with specialization in NFTs and the metaverse. Teh says that some of the more popular marketplaces are OpenSea, SuperRare, Nifty Gateway, and Rarible, though there are many others. 
These marketplaces have different characteristics that can be appealing to different investors. For example, OpenSea is the most popular NFT marketplace, so it has great variety. SuperRare focuses on NFTs for art. And Nifty Gateway is more about special drops and collaborations.
“Some NFTs are also sold through traditional auction houses such as Christie’s and Sotheby’s,” Teh adds. 
When choosing an NFT marketplace, some of the top factors are typically:
Choosing an NFT marketplace can help you ultimately find NFTs to buy, but that process differs from most traditional transactions.
As for how those marketplaces work, prospective investors “might need to buy crypto if they are buying on a platform that only accepts crypto,” Teh says. That includes many NFT marketplaces. For instance, investors may need to purchase Ether (ETH, often just called Ethereum) to purchase NFTs. That would also entail having a crypto wallet to store their crypto holdings, as well as their NFTs, which typically get transferred to your crypto wallet after purchase.
There are several different types of crypto wallets, which have different user experiences and specializations. Some common ones include:
To choose a crypto wallet, consider factors such as your trust in the security of that wallet, the wallet’s ease of use, and the wallet’s compatibility with the cryptocurrencies and marketplaces you use. Ultimately, you want to find one you trust and feel comfortable transacting with.
Once you have a crypto wallet, you’ll need to fund it by buying cryptocurrency so you can then buy NFTs using your wallet. The crypto you buy depends on your preferences, what your wallet accepts, and what the NFT marketplace allows. 
In many cases, NFT transactions are made using Ethereum (ETH), so you would purchase this crypto via a crypto exchange such as Coinbase or Binance. There, you trade your USD or fiat currency for ETH (or another cryptocurrency), and then you transfer crypto from the exchange to your wallet so you can have crypto to use for NFT purchases.
The process is typically straightforward, but many exchanges publish useful guides if you’re having trouble.
From there, you’ll likely need to connect your wallet to your chosen NFT marketplace. If you’re using a popular wallet and connecting it to a large marketplace — say, for example, you’re using a MetaMask wallet and connecting it to your OpenSea account — the process should be fairly intuitive.
With a funded and connected wallet, browsing for and purchasing NFTs on most major marketplaces should feel similar to buying pretty much anything else online. You can search for or otherwise select an NFT you want, check out the price (which may be in USD or ETH—again, it’ll depend on the exchange), and decide if you want to go through with the transaction.
From there, it’s often as simple as hitting the “buy” button. You should then see the NFT in your wallet, and the corresponding amount of ETH should have been transferred out of it. However, some NFT sales are auctions like eBay transactions while others are fixed prices.
Warning: Social media can be rife with bad or misleading information about NFT projects. Experts warn you to not trust everything you read or see about NFTs on social media and to make sure you do your due diligence before buying any NFT.
Once you buy your NFT, you can typically view it either in your crypto wallet or on the marketplace where you bought it. On the marketplace, you can also decide to list your NFT for sale if you want to try to tu
NFTs are one of the myriad investment options on the market. And like all investments, they have their pros and cons.
Among the upsides of investing in NFTs is the fact that NFTs are still relatively new to the market, which means there’s room for growth and appreciation. They’re fairly easy to invest in as well, and benefit from the security of blockchain networks.
On the downside, NFTs are far from a mature asset class, and their values can fluctuate wildly. They’re also not impervious to security flaws. Investors could fall victim to any number of scams or pump-and-dump schemes out there. There are also few, if any, protections for NFT investors from regulators.
Another thing investors might want to keep in mind: Petrozzo notes that many big brands are just beginning to explore NFTs, which could serve as a nod of confidence to their long-term prospects and viability.
“There are giant brands investing in the space, and they’re not thinking about pictures of monkeys,” he says.
Teh agrees. “If you are a brand and are looking for a unique way to acquire new users, buying into a hyper-engaged NFT project and using the commercial rights of the NFT in your brand is a new and exciting way to gain a community overnight,” she says.
But, as with any investment, experts urge caution and say that investors should do their homework before putting their money at risk. And since some of the hype around NFTs has died down a bit, investors have more time to do their due diligence and homework — something that was often thrown to the wind during the particularly frothy period of NFT trading in 2020 and 2021.
“There’s time to do research now,” Petrozzo says. “You’re not going to miss out on anything.”
Gas fees are transaction fees that are essentially payment for the processing power associated with making the transaction on a blockchain. Fees vary by platform and factors like network congestion, so compare before investing.
While it’s not always easy for the average person to know if an NFT is authentic, you can research the creator and view the blockchain record if you’re familiar with that process. Otherwise, you might put your trust in a marketplace to verify NFTs.
NFTs can potentially be a good investment but much depends on the specific NFT and your goals/risk tolerance. In general, NFT prices are more volatile and riskier than more established assets, but that can also lead to higher potential returns.

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