You have probably heard of NFTs, or non-fungible tokens, but do you know what they really are? Perhaps you’re interested in investing in cryptocurrency, or using your existing cryptocurrencies to acquire an NFT. In this brief overview, you’ll learn about the process to buy NFTs and how to store them securely in your digital space.
What Is an NFT?
An NFT, or a non-fungible token, is a digital asset built on blockchain technology that is typically sold in a digital marketplace for a set amount of cryptocurrency. Though the types of NFTs vary widely across marketplaces and projects, an NFT is generally an image, artwork, or digital media that one can buy and sell. As with any digital asset built on blockchain technology, an NFT contains a ledger, or a record of the assets transnational history, which accompanies the NFT itself.
How You Can Buy an NFT
Though you may have heard of some of the more expensive NFTs, there are so many digital assets listed across marketplaces at a variety of price ranges. If you are interested in an NFT or associated project, conduct some research on the NFT, the roadmap for the project, and what other benefits might be associated with you investing in this NFT project.
If you have decided that you are interested in buying an NFT, the steps to acquiring your first digital asset are actually quite simple. Just as a market with fiat currency operates, you will need currency to buy your digital asset, a place to purchase it, and a place to store it once you have acquired it. Keep reading for an overview of these steps.
Cryptocurrencies and NFTs
NFTs are digital assets that can be bought and sold with cryptocurrency. If you are thinking about purchasing an NFT, one of the most important parts of your pre-purchase research should be to investigate what cryptocurrency you are interested in investing in and what NFTs you can purchase with that currency. With so many cryptocurrencies to chose form, you can always own more than one currency and use each currency for different investment objectives.
Find a Marketplace That Works For You
While there are dozens of marketplaces that have NFTs listed for sale, the biggest marketplace online is OpenSea. The primary currency used on OpenSea is Ethereum (ETH), which many NFT projects use as cryptocurrency to back the project. While looking for a place to purchase an NFT, be sure to prioritize a safe and secure transactional marketplace.
In addition to finding a marketplace that works for you to conduct business, be sure to think about how your digital wallet – or the place where you will store your cryptocurrency, and potentially your NFTs – will connect to that market. Just as there are several places to buy and sell assets on the stock market, there are a number of places within which you can purchase NFTs in the digital sphere.
Prioritize a Secure Digital Wallet
A digital wallet, as previously mentioned, is a secure place to store your cryptocurrencies, and in some cases your NFTs, or digital assets. There are a number of kinds of digital wallets, with the primary difference between them being security features.
A digital wallet connected to the internet, or a cloud-based digital wallet, is secure but, due to its 24/7 connectivity to the internet, is more susceptible to potential security threats. However, it provides ease of access. A cold storage digital wallet, or a wallet that exists on hardware such as s hard drive, is not connected to the internet and therefore can provide some security from potential security breach.
That being said, it exists on a physical hard drive that could get damaged or stolen. Whether you choose a digital wallet that is connected to the internet or one that lives offline, make sure that it aligns with your investment goals, security priorities, and is compatible with your cryptocurrencies and NFTs of choice.
The Bottom Line
Investing in anything takes time, research, and knowledge about what you’re investing in. The digital worlds around NFTs can be confusing, especially with new jargon and emerging technologies. If you’re thinking of buying an NFT, make sure that you are aware of the ins and outs of the NFT project and its roadmap to get a clearer picture of what the long-term return on your investment might look like.
Whether you are interested in beginning to invest in NFTs, or are committed to learning more before investing in digital assets, be sure to find an NFT project that aligns with your investment and personal goals. Do you want increased access to digital communities, exclusive investment opportunities, or ownership of a rare piece of art? Whatever your priorities, now you can take the next step in buying an NFT.