The beginning of an NFT took place in 2017 with the first-ever NFT created by the name ‘Crypto Punks’.
NFT, an abbreviation for non-fungible tokens was created using the same kind of programming that is used for cryptocurrencies. Where do you find these, you ask? These are based on blockchain technology which is a public ledger that records transactions just like for other cryptographic assets. However, NFTs cannot be traded on an equal footing like other cryptographic assets, this is owing to NFTs having a digital signature that makes an exchange impossible.
NFT being a digital asset represents world objects such as music, art, paintings and videos. Hence, they are bought and sold virtually via the means of cryptocurrency. An impressive statistic suggests that $174 million have already been spent since the month of November 2017 on NFTs.
How Does it Work?
Firstly, an NFT is created on a digital platform for the sole representation of both tangible and intangible objects which include :
Artwork, videos, music, collectibles, virtual real estate, postcards, etc. Every NFT is unique in its own way and hence, cannot be replicated. The difference we draw between objects we buy in the real world and the digital world is that instead of getting a real piece of art that occupies a place in your home, the buyer here gets a digital file instead along with exclusive ownership rights over the same.
The amazing part is how simplified NFT makes the whole transaction. NFT’s data makes it easier for one to verify the ownership and transfer tokens between owners during any exchange. NFTs, therefore, is an amalgamation of characteristics.
This has brought in a wave of change in terms of how artists and distributors no longer rely on galleries and auctions for their works of art to be sold. Recently, Taco Bell auctioned a themed NFT art in order to raise funds for charity. This goes to say that NFT is not used to make money only for art.
How To Buy NFTs?
To proceed with buying NFTs, you must follow a procedure as you would continue reading below about it :
Crypto Wallet
Firstly, create an account for yourself on a reliable and authentic crypto platform.
The next step would involve opening a crypto wallet. The easier approach would be to buy crypto using your credit card and various platforms are available for the same like eToro, Coinbase and even PayPal. On opening a wallet, you will be given a seed phrase which would function as your key to your wallet.
Buy Ethereum to Set Up A Crypto Wallet
With varied options available, it is best if you start with an Ethereum-compatible wallet. We suggest this since Ethereum is presently the dominant blockchain network in the NFT ambit and also provides access to the biggest marketplaces.
How To Buy Ethereum: Use eToro
It is not a problem, if you do not own any Ethereum, you will have to purchase some from a cryptocurrency exchange. In the next few simple steps we will how you could buy Ethereum with eToro :
Step 1 – Create an Account on eToro and Verification
Navigate to ‘Join Now’ on the homepage of eToro and proceed to provide an email, your username and a password. After this, you would proceed to fill out the necessary KYC requirements to complete your profile. Lastly, you will be needed to upload your ID proof and proof of address.
Step 2 – Deposit
With your account being verified, you can proceed to make a deposit with the minimum threshold for the deposit being a mere $10 with eToro. The following modes of payment can be utilized for the same :
- Klarna
- Skrill
- PayPal
- Neteller
- Bank Transfer
- Credit/ Debit Card
Step 3 – Buy Ethereum
At finding the search bar, type ‘ETH’ and then click ‘Trade’. On this, an order box appears and in it, you may enter the desired investment amount of your choice and proceed to click ‘Open Trade’.
After you have made the purchase, you will be able to move it from the said exchange to your wallet of choice. Your digital wallet is a place for you to store your cryptocurrency and once it has been established and funded, it becomes relatively easier for you to buy an NFT.
Step 4 – NFT Marketplace
After buying Ethereum, you would require an NFT marketplace to purchase your NFTs. For this, you could refer to several NFT marketplaces like Rarible, Axie marketplace, SuperRare, Nifty Gateway, Mitable, OpenSea, etc. that selectively sell NFTs.
These platforms also offer to sell digital collectibles, artwork, music, in-game items, etc. After this stage, your wallet would be connected to the marketplace selling the NFT. This would enable you to sell, buy and even trade NFTs respectively.
Security
You must however be aware of any kind of NFT scam that could take place while making such transactions. This involves understanding how you must keep your information and cryptocurrency safe. You must avoid fake links or pop-ups advertising NFT projects or purchasing any infringed work of art.
Conclusion
So far, you are more or less ready to start buying online with the help of your NFTs. You could start by placing a bid on the said NFT or meeting the asking price of sellers. For further reference, please understand that the potential buyers are provided with details on the buying process by the NFT sellers including the selling price, the time limit of the auction and the accepted cryptocurrencies by the sellers.
Thus, if your offer for the NFT stands to be the highest at the end of the auction or is greater than or equivalent to the reserve price, then the concerned NFT marketplace will automatically complete the transaction.
With all the risks involved, the future of NFTs still looks very promising as the entire market for NFTs has crossed a huge amount of $100 million as was reported by the end of July, the year 2020. The NFT space evidently is yet to evolve and span out exponentially in the time to come.
