Non-fungible tokens or NFTs are digital assets that are assigned a digital signature, making them unique. The asset itself can be replicated, but the record of ownership of that asset is stored on a public ledger safely where everyone can see the certificate of ownership.
Many artists, musicians, and celebrities are capitalising on this trend by making their own NFTs and selling them on various marketplaces. From music to memes to sports memorabilia, you can find it all. If you fancy buying them, you only need a cryptocurrency wallet or an account with an exchange like WazirX or Binance.
How to buy an NFT
Most NFT transactions take place in a dedicated marketplace. Here’s a quick step-by-step guide on buying these digital assets from there.
Most marketplaces currently use the Ethereum network to power their transactions. So you will need Ethereum’s native token Ether to buy an NFT. If you do not have it, you can open an account with an exchange like WazirX or Binance and purchase the tokens from there.
You also need to set up a crypto wallet compatible with Ethereum. A crypto wallet is a digital address where you can store cryptocurrencies. You can open wallets with platforms like Metamask, Binance or Coindesk. You need to go to the site of the platform of your preference and register to open a wallet with them. After opening the wallet, you will need to send the ether you bought from the exchange to the wallet’s address.
Choose the marketplace you want to buy the NFT from. There are multiple marketplaces for NFTs. Some of the top NFT marketplaces include OpenSea, Rarible, SuperRare, and Foundation.
Register an account at the marketplace you prefer. Different marketplaces have different registration processes.
Connect your wallet to the marketplace. Most marketplaces have a simple ‘Connect wallet’ option on the platform.
Browse the marketplace and choose an NFT of your liking. Most marketplaces have an auction system set up for purchasing NFTs; you will need to bid for the NFT you want.
After a successful bid, you will complete the transaction and the necessary amount will be debited from your wallet. Remember that you may also have to pay a transaction fee to the marketplace, but the fee will also depend on the marketplace.
Should you invest in an NFT?
NFT market is a speculative market driven by scarcity and FOMO (fear of missing out). There is no assurance the NFT you buy will appreciate with time. But if you want to support an independent artist and have an acceptable appetite for losses, they can be a fine collectible for your digital library.