You’ve probably landed on a “How to buy an NFT” guide after having your eye on a specific NFT for a while. Or maybe you’ve finally gathered the courage to buy the NFT of your dreams? Even if you’re only here because you want to be a part of this trend, buying NFTs requires only a bit of basic knowledge.
Now, considering most NFTs are built on the Ethereum blockchain, we’ll be going through how to buy Ethereum NFTs. But, if your NFT requires payment with any other cryptocurrency, the process still goes pretty much the same.
How to Buy an NFT
Step 1: Open a Crypto Exchange Account
The first thing you’ll need to do is open an account on a crypto exchange platform. A crypto exchange functions as a brokerage where you can buy and sell all sorts of cryptocurrencies. To buy an NFT, you must create an account on the platform of your choice. If you’re a beginner, we recommend Coinbase, as it’s the simplest one to use. But, if the lowest fees are what you’re looking for, then Binance.US is your best option.
Step 2: Open a Crypto Wallet
Some NFT marketplaces such as Nifty Gateway and NBA Top Shot accept credit cards for payment. But most other marketplaces require cryptocurrency. However, you’ll need a crypto wallet to start buying NFTs on any platform.
Contrary to popular belief, crypto wallets don’t actually store your coins and tokens. They store the keys that grant access to your digital assets. To access your wallet, you will be given a recovery phrase. Be careful to never lose your recovery phrase, so that you don’t lose everything in your wallet. According to Ethereum’s website, the most secure way to store your seed phrase is by writing it down on paper.
A wallet may operate independently, or be hosted on an exchange. The exchange acts as an intermediary in the crypto transfer, much like a bank. Whereas if you want to trade NFTs without third-party involvement, you need a wallet that’s tied directly to the blockchain. This way you can transfer currency directly using the public key.
Also, you’ll need to make sure the wallet you choose is compatible with the Ethereum blockchain and Ether currency. We also recommend the CoinBase wallet for beginners, but MetaMask seems to be everyone’s favorite wallet for Ethereum trade.
Check out this article for further information on the best NFT wallets.
There are 3 types of wallets out there: hot wallets and cold wallets.
Step 3: Buy Ethereum
Most NFTs are built on the Ethereum blockchain and therefore traded with Ether (or Ethereum). And most trusted marketplaces showcase Ethereum-based NFTs. However, Ethereum comes hand in hand with high gas fees and slow transaction speed (due to high network usage).
If that creates a problem for you, Ethereum-based NFTs aren’t your only option. For example, the Polygon platform was built on top of the Ethereum blockchain aiming to provide more scalability and lower fees. Other Proof of Stake (PoS) blockchains that support NFTs, like Solana, Flow, Tezos, and Cardano are also edging in on Ethereum’s lead. However, Ethereum is still the token most popular to buy NFTs.
Step 4 of How to Buy an NFT: Transfer Ether to Your Crypto Wallet
The exchange where you buy Ethereum, the wallet you use, and the marketplace you buy your NFT from. determines how you do this step.
Step 5: Connect Crypto Wallet to NFT Marketplace
Once you’ve created an account on a marketplace, it’s time to connect your wallet. Some marketplaces can have you set up a whole new wallet from within the website. Other marketplaces use their own proprietary wallet. Proprietary wallets usually offer discounts or lower gas fees. Every marketplace presents a guide on how to use your wallet accordingly. Make sure to read those guides carefully.
Step 6: Buy the NFT
Popular NFTs sell out fast, so remember to have all those steps ready before mint, so that you don’t miss out on your chances.
Once the NFT is either minted, purchased from the marketplace, or transferred to you by the NFT’s current owner, it will appear in your wallet.
Remember, when you buy an NFT, you’re buying a token ID to where that token is actually stored. You don’t own the rights to the image or the original image itself unless those ownership rights are specified in your contract.
Look Out For Scams!
Once you start considering diving into the NFT trading world, it’s very important to familiarize yourself with how to protect your information and cryptocurrency. We highly recommend using two-factor authentication, strong passwords, and starting your transactions small. Additionally, most experts recommend that you store your crypto in a cold wallet that stores your keys and assets offline on a hardware device.
Finally, always be alert to avoid phishing scams, catfishing, pump-and-dump schemes, and counterfeit NFTs.