August 8, 2022

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Rocky Shi Talks NFT Basics and How They’re Fueling the Virtual Artwork Growth

Ever heard of NFTs? The NFT market is still very new, yet it has already...

Ever heard of NFTs? The NFT market is still very new, yet it has already become a $41 billion industry.

By now, most people have heard of them, yet the majority have no understanding of how they work, or why they can be very valuable. Those who take the time to learn, however, have the opportunity to get into the NFT game early, before mass adoption hits.

And if you can do that, you can potentially make a lot of money.

So what does it take to become an NFT collector, buy unique, digital NFT art, and either hold it forever or sell it for a profit? Keep reading below to find out now.

Understand How NFTs Work

Before you start collecting NFTs, you need to have a deeper understanding of how they work and why they are the future of collectible art.

So what is an NFT? It’s a non-fungible token.

Token means it lives on the blockchain as cryptocurrency does. Bitcoin and Ethereum are two examples of blockchain-native assets.

But non-fungible separates NFTs from crypto. Fungible means that something is interchangeable. Dollars are interchangeable, for example.

My dollar is the same as your dollar. We can exchange dollars all day with no consequence. The same is true for bitcoin.

But NFTs are non-fungible. Each token is unique and they are not interchangeable. Each token ID exists only once on the blockchain. And only one person can own that token at one time.

So when you buy an individual NFT, you are the only owner. You can sell it at any time and transfer ownership.

But if someone screenshots the JPEG image associated with your NFT, that does not mean they own it too. They simply have a worthless screenshot on their computer.

NFTs Benefit Artists

NFTs aren’t just fun to collect. They are very valuable to artists as well.

When they create an NFT, they can determine the royalties they would like to earn on future sales of their NFTs. That way, they can continue earning from their artwork over and over again, if people continue to purchase it on the secondary market.

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This makes it possible for newer, less established artists to actually make a living with their artwork.

And the royalties are automatic, as they are programmed into the smart contract of the NFT. So when a sale happens, a percentage, set by the artist, will go to the artist’s wallet.

How to Buy NFT Art

So how can you start buying NFT art within the next few minutes? Follow these steps to find out now.

Set Up a MetaMask Wallet

NFTs are stored in cryptocurrency wallets. But you need a wallet that supports the appropriate blockchain, and one that can be installed on your internet browser.

The most popular is MetaMask. You can install it for free on Google Chrome, Safari, and a few other popular web browsers.

MetaMask is compatible with the Ethereum blockchain (the most popular for NFTs). If you want to buy Solana NFTs, you’ll need a different wallet.

Setting it up is very simple, as no personal information is required. You just need to write down your seed phrase on a piece of paper (ultra-secure password), and you’ll be good to go.

Purchase Cryptocurrency

Next, you need to add cryptocurrency to your browser wallet. If using MetaMask to buy Ethereum-based NFTs, you’ll need to purchase Ethereum.

You can do this on a cryptocurrency exchange. Most people use Coinbase, Binance, or Kraken to do this. If you don’t have an account on an exchange, you’ll need to create one.

This means verifying your identity using your ID, social security number, full name, and address. Once submitted, it can take upwards of a few hours, or even a day to get verified before you can buy crypto, which is often referred to as know your customer.

Once Ethereum has been purchased, you need to send it to your MetaMask wallet. To do this, initiate a withdrawal from your crypto exchange account.

In the recipient field, copy and paste your MetaMask wallet address (which will start with the characters “0x” and have a total of 42 characters).

Browse the NFT Art Marketplace

Once your wallet has crypto in it, you can start searching for and buying NFTs. There are numerous NFT marketplaces that you can explore. Exchanges that focus on Ethereum-based NFTs include OpenSea, Rarible, Looks Rare, Foundation, and a handful of others.

If you’re in the market for higher-quality NFTs, from unique and legitimate artists, then visit superrare.com. This platform limits the number of people who can sell NFTs on the platform.

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The exclusivity means that the quality of NFTs available is much higher than most other marketplaces that are open to everyone. Marketplaces that are open to all sellers have been filled with scam NFTs and fake artists sprinkled in with legit NFT collections.

Buy Now or Make an Offer

Once you find an NFT that suits your fancy, it’s time to make a purchase. Most of the time, you can either buy instantly at the listed price. Or you can make an offer to see if the seller will accept a lower price.

Some artists (and secondary sellers) will list their NFTs at an auction. The first bidder will start the auction, and if it meets the reserve price, it will sell automatically when the auction is over.

However you purchase, the transaction will need to finish on the blockchain. You’ll pay a small transaction fee, otherwise known as gas.

The price of gas fluctuates depending on network activity on the Ethereum blockchain. More people making Ethereum transactions will increase the gas price and the cost of your transactions.

If the price seems too high when you are trying to buy, try waiting until the price goes down. It can rise or fall dramatically in just a minute or two.

View Your NFT

When people buy an NFT for the first time, they check their MetaMask wallet to see if it’s there. But MetaMask doesn’t actually show your NFTs, even though they are stored in your Ethereum wallet.

To view your NFTs, you can visit an NFT marketplace, such as the one you purchased from. Or use OpenSea, for which you do not need an account. Just connect your MetaMask and view your profile. You can view all the NFTs currently stored there.

All of your Ethereum NFTs will show up here, regardless of which marketplace you purchased them from.

Types of NFTs to Buy as an NFT Collector

There are many different types of artwork that NFT collectors purchase. There are many different motives for collecting NFTs. Here are some of the most common.

Fine Art NFTs

If you’re looking to collect art, then you’ll be drawn to unique artworks, by well-known artists, that would make for excellent wall art.

These can also be great investments, as you’ll likely be able to sell this on the secondary market.

Typically, the purchase price for fine art pieces is higher than other types of NFTs. And the goal usually isn’t to profit from these, but rather to hold onto them and display them in your home or virtual art gallery.

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Large NFT Collections

Some of the most popular types of NFTs are large collections of NFTs that all look very similar. The artist will draw up many different traits and will use software to algorithmically generate the final images.

Each one will be unique, though they all contain the same base character. And as of 2021 and 2022, they are primarily cartoon characters, ranging from money to dogs to aliens, and everything in between.

At the height of the NFT craze, you could buy one of these NFTs for $20 to $100 and sell them a few hours later for thousands of dollars. The opportunity to flip NFTs this way is very lucrative but very risky.

It’s akin to day trading and is harder than most people realize.

But you don’t have to flip these NFTs for profit to benefit from them. You can hold onto them, as many of the artists provide benefits to those who hold the NFTs.

This might be exclusive content, physical merchandise, invitations to in-person events, and free NFTs in the future.

Many of the top NFT collectors focus their efforts on this category of NFT.

In-Game Items

There are many blockchain-based computer games currently live today and many more in production. Most of these games are free to start playing.

As you progress in the game, the in-game items that you find or win are actual NFTs. That is, you own it and you can sell it.

You can sell them at the marketplace in the game, or on an NFT marketplace, in exchange for crypto. Therefore, these games provide you with an opportunity to get paid to play games.

Of course, if you love the game, you can buy and collect these items for yourself in order to be one of the top players.

Start Collecting NFTs Today

It’s not hard to become an NFT collector in 2022. The steps listed above take only a few minutes to complete.

Follow them and you can be collecting unique NFTs in a matter of moments. And who knows, maybe you’ll find the next hidden gem.

Looking for more information like this? Check out our blog now to keep reading.