NFTs are still new in the cryptocurrency space. However, that doesn’t mean people aren’t excited about them and ready to start testing. There are countless people looking to buy digital art and claim ownership over their favorite pieces.
It’s grown so much that there was over $10 billion in sales at the end of 2021. That’s why it’s no surprise that you want to learn how to invest yourself.
Are you considering investing in NFTs and want a few tips to help you make good decisions? Read the guide below to learn how to get started in the NFT world.
Learn What NFTs Are
The first step to NFT investments is learning what an NFT is. It isn’t like traditional art — where you get a physical representation of what you buy. An NFT is like a receipt on a blockchain that says you have ownership of a digital good.
NFTs are also more than digital art. You can use them for any digital good you think of, even though art is the most commonly used one. Some projects are beginning to include NFT support for physical items as an experiment.
Once you understand what an NFT is and how it works, you should have an easier time looking at your NFT options and determining what you want.
Pick a Blockchain
The next thing to do when you want to buy an NFT is to figure out which blockchain to buy on. Traditional blockchains, like Bitcoin, don’t have the ability to use NFTs. You’ll need to use a blockchain with smart contracts like Ethereum or Polygon to do this.
Investigate each blockchain to see which NFTs are available. You’ll also need to examine what it costs to transact on each network. Ethereum, for instance, has higher fees than the other options because of its popularity.
Get a Cryptocurrency Wallet
Once you figure out which blockchain you want to use to buy NFTs, you’ll need a way to make transactions. The way you do this is with a cryptocurrency wallet.
A cryptocurrency wallet is an address that contains all your assets on a blockchain. This includes any cryptocurrency coins you own and any NFTs.
Signing up for a wallet is free. You’ll usually use a browser plugin for a cryptocurrency wallet. This makes it easy to connect to NFT providers and make transactions.
Once you have a wallet, you’ll need to send funds to it to make transactions. Many people use centralized cryptocurrency exchanges to do this. Sign up for an account at an exchange, buy the cryptocurrency you want, and send the funds to your private wallet address.
Look for NFTs to Buy
Once you have a cryptocurrency wallet and fund it, you can start buying NFTs. To do this, you’ll need to look at the NFTs on the market and start buying. Here are a few ways to look through your options.
Look for Reputable NFT Creators
One of the things about the cryptocurrency space is that there are a lot of bad actors. People put out quick products in an attempt to make quick cash. As a result, the buyers of NFTs get burned.
Try to stick with reputable NFT projects when you start in this space. You won’t be able to see the benefits of investing in NFTs if you buy poor products from scammers.
Learn as much as you can about NFT creators and if they have done well in the past.
Check the Community
Community is a big deal in the cryptocurrency world. Many projects never gain traction because they lack a great community — even if the product is excellent.
Check to see where the community for a project hangs out. Some common places they pop up are Telegram and Discord.
See how involved the community is and what their attitude is like. You can use the feedback to see how excited people are and learn more details about a project.
Follow the News
The NFT world can move fast at times. Some projects pop up out of nowhere and sell limited copies, while others will go through months of buildup before release.
You can stay on top of things by following NFT trends. Find reputable news sources that talk about NFT news and join communities that talk about NFTs.
But as mentioned above, there are bad actors in the cryptocurrency and NFT space. Find reputable sources to get information to avoid falling victim to scams.
Find an NFT Marketplace
Another great way to find NFTs to buy is to look for the top NFT marketplace. You don’t only have to buy NFTs on the project’s website. People sell NFTs on marketplaces to gain exposure to a larger audience.
On top of that, NFT owners will sell their purchases on these websites too. This means you can find copies of NFT releases you missed on release.
Investigate the NFT marketplaces that are available to check their history. You want to stick with the top ones to avoid bad actors. Check the news about your marketplace options to see if they have been involved in bad situations in the past.
Take Investing in NFTs Seriously
Although you may be investing in NFTs because you like the art, that can’t be your only consideration when investing money into the asset. You not only have to consider the art you receive but also consider the value of the art and whether or not you’re buying from a reputable seller.
Now that you’ve read the guide above, you should know more about the type of NFT investments available and why each one makes sense to buy. Start by finding a reputable marketplace and project to buy from to make your first NFT purchase.
Are you interested in other financial topics and want to learn more? Check out more posts on the blog to keep reading.
