How to buy NFTs

Types of NFTs

Before stepping into the world of NFTs, it is necessary to gain some information about the basics of this industry. There are 4 main types of NFTs. Some of them are “single-edition”, which means the artist has produced just one NFT (Non Fungible Token). Then we have the “multi-edition” which refers to a series of related artworks that has been produced by an artist.

Some of the NFTs are for resale on a secondary market. For example, you buy an NFT, and you resell it to another person. Finally, we have the “Utility NFTs.” They are more than just a 3D design to be owned and they usually come with functions, privileges, or physical items. For example, the NFT you have recently bought is accompanied by a VIP event ticket or a physical picture. It might have functions on DeFi platforms and Metaverse as well.

Types of NFT Marketplaces

NFT Marketplaces are digital places that match supply and demand. They allow the discoverability of NFTs. There are three diverse types of Marketplaces. Some of them are called Open Marketplace which means anyone can buy, sell, or mint NFTs and there will be in-house minting options. On the contrary, closed Marketplaces are exclusive and artists must apply to be a part of the community. The marketplace undertakes the minting process and trading NFTs is a bit restricted. The last category is proprietary Marketplace which refers to trademarked or copyrighted NFTs.

Examples of NFT Marketplaces

There are so many different NFT Marketplaces; the process and the services offered by each one is different. “Mintable” is an example of a Marketplace which makes the process of Minting NFTs more affordable. The process of converting a digital work into a unique crypto asset on the Blockchain is called minting an NFT. It offers gassless minting as well as the traditional minting.

“OpenSea” is the first and the largest peer-to-peer marketplace for crypto collectibles and gaming items. You can buy and sell NFTs on this platform using smart contracts.

“NBA Top Shot” is an NFT trading platform for buying and selling digital short videos of NBA moments. This platform has a social aspect due to huge followers and various challenges and contests which engage the community.

“SuperRare” is an NFT Marketplace which focuses on single edition, unique artworks. It is more like a traditional art auction house for famous artists and expensive artworks. “Nifty Gateway” is another exclusive platform. You can only find collections from well-known artists on this Marketplace and art is traded with a long-term value.

“Foundation” which is led by the community is one of the most loved marketplaces. An invitation is needed to become a member and the artwork varies from famous artists to unknown ones.

“Rarible” is just like “OpenSea” but in a smaller scale. It works with more blockchains and it makes it more accessible and is easier to use. Rarible aims to become a DAO and it has a community aspect. If you hold $RARI which is the governance token of Rarible, you can vote and be a part of the future developments of the project.

Cryptocurrency Exchange Platforms

In the process of buying NFTs you should use cryptocurrency exchange platforms. They make it possible for the users to buy, sell or trade cryptocurrencies. We have two types of exchange platforms. some platforms are centralized like Binance and some decentralized like Dodo.

Centralized exchanges or CEXs are controlled by a third party which takes commissions and transaction fees but Decentralized exchanges or DEXs are peer to peer marketplaces without any intermediaries. In DEXs users do not have to compromise the custody of their assets and the orders are executed using smart contracts. Each platform has its own protocol or mining system. They issue the user’s public key and hold it.

Cryptocurrency Wallets

If you want to buy NFTs, first you should create a cryptocurrency wallet. Cryptocurrency wallets store your public and private key. Public key is for data encryption, and it represents an address to receive tokens. You can share it with everyone and it is like your debit card number.

On the other hand, private keys are for decryption, and they represent the ownership of cryptocurrencies. They are used to unlock and spend the tokens you have custody over. Private key is like the password you use to get into your online banking account, and you should not share it with anyone else.

It is important to know that cryptocurrency wallets do not actually hold your tokens; they just grant access to your funds. Crypto wallets provide independent access to the digital assets and safeguard the funds.

There are two main types of Crypto wallets. One is referred to as a Hot wallet and the other is called a cold wallet. Hot Wallets are considered the ones which are accessible via browser extension, mobile applications, or desktop software. They are easy to access but more vulnerable than the other type. MetaMask is an example of an online wallet. Another example would be Trust wallet which has both mobile application and desktop software.

Hot Wallets are the Hardware or paper ones. They are considered the most secure option but there is a greater risk of loss and there will be no back up.

How to buy and sell NFTs

If you have already entered the world of cryptocurrencies, trading NFTs will be easy for you. But if you are a newcomer, it might be a bit challenging at the beginning and you should be careful about your early steps.

The first thing to do when you want to buy an NFT is to open an account in a cryptocurrency exchange platform. Each platform has different rules and offers different services. It is important to be fully informed about the process before starting it.

The next stage would be opening a crypto wallet. The diverse types of crypto wallets have been explained in the former sections. After taking care of this step, you should buy some Ethereum. Most of the NFTs are built on top of Ethereum blockchain. That is why you should make sure that your crypto wallet is compatible with Ethereum.

ETH can be bought on cryptocurrency exchanges and then it should be transferred to the crypto wallet. After that, the wallet should be connected to the NFT Marketplace and you are ready to buy your first NFT.

Tips for trading NFTs

Well-known NFTs will be sold extremely fast. If you have an eye on a specific NFT, make sure that your wallet is connected and funded with Ethereum before the NFT mint starts. The security measures are vital for the newcomers. It is better to use two-factor authentication and strong passwords.

As mentioned before, cold wallets have higher security than the hot ones. It is helpful to do a sample transaction with a small amount of money before the NFT drop to make sure everything works properly.

Buying an NFT does not mean that you bought the copyright unless it is stated in the agreement. Due to the hype in the NFT market, this industry is full of frauds. Some of the most common scams are phishing, catfishing, pump and dump schemes and counterfeit NFTs.

There are many fake links and advertising pop-ups on websites which promote new fake NFT projects. You should avoid clicking on every link which is offered to you. There are many fake marketplace websites or social media accounts that try to impersonate famous NFT influencers.

Sometimes a group of people play with the price of an NFT; just like the stock market and the cryptocurrency market. They pump the price and once it reaches the peak, the top-tier investors cash out, while the bottom-tier investors are left with invaluable assets.

Conclusion

The use cases of NFTs are so diverse that they cover many industries. Moreover, they are considered valuable assets which can be traded to earn profits. Many celebrities are joining the NFT industry to engage their fans in a new way. For example, Cristiano Ronaldo has recently announced a partnership with Binance to bring unprecedented experience and access for his fans through this NFT platform.

About Paycer
Paycer’s goal is to aggregate DeFi investments multi-chain and make them available to users without the need for their own wallet nor the expertise. This should allow anyone to generate a passive income in a world where banks no longer pay interest. Hence the Paycer team is developing a bridge protocol for DeFi and TradFi to combine the best of both worlds and make it available for retail clients #CeDeFi. Apart from the technical matters and the creation of a super easy to use final product. The goal is also to create a regulatory framework that allows the legal operation of a DeFi platform within the EU first and subsequently in other regions.

Currently, a DeFi platform is already available on paycer.finance on which Paycer tokens PCR can be claimed and staked. More features will go live soon. At the moment on Polygon but other blockchains will be integrated in the near future. Paycer is also working on a banking partnership to be able to combine DeFi with a traditional bank account. In addition to the development of the DeFi platform, the development of the final consumer product is also in progress.

Be sure to follow Paycer on social media for all the latest updates on product development. We have further exciting announcements to share very soon.

Stay in touch with Paycer:
Website | Telegram | Medium | Twitter | LinkedIn | Instagram | GitHub

Source: Cobos, Kristin, and Taína Cuevas. “How to buy NFTs.” Money, 28 April 2022, https://money.com/how-to-buy-nfts/. Accessed 26 June 2022.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store