NFT’s or Non Fungible Tokens are the new buzzwords in the investment world. The rise in blockchain, cryptocurrency and even the Metaverse has fuelled the growth in NFTs. And add to it the celebrity endorsements.
The result is that more and more people are exploring NFTs as a high value investment option to add in their portfolio.
– CNET established that almost 250,000 people, monthly, participate in NFT trading on Open Sea.
– The Guardian reported that between 2020 and 2021, the NFT market grew 220 times.
– 2 million users are on the waiting list of Coinbase as they get set to launch their NFT marketplace.
The technology and investment world is all abuzz with this new term. There, obviously has to be substance behind it all.
How else then can you explain as to why NFT sales are booming.
– $91 millon- that’s what the most expensive NFT sold at till date.
NFTs are the new kids on the investment block. Literally, even kids are leveraging the benefits.
If you haven’t, then you must read about Benyamin Ahmed who at 12 years of age made 80 ether in a single day after his second NFT Collection, Weird Whales sold out.
Trading in NFTs is still a daunting concept to many but it is increasing.
Which is why we have written this step by step guide to enable you to understand the basics of NFT investing.
What exactly are NFTs?
NFTs are unique, one of a kind, unsubstitutable digital assets or tokens. Non Fungible Tokens can include artwork, music, playing cards, in game items and even tweets.
People can trade in these assets online with cryptocurrency. NFTs are traded on decentralised blockchain technology. Ethereum is the most commonly used platform. Blockchain development provides security and transparency to help authenticate and validate ownership and provenance.
Investing in NFTs- A step by step guide
We have broken down the process into simple steps, which you can easily follow:
– Link up with an NFT marketplace:
The very first step is to sign up with an NFT Exchange with the help of a NFT marketplace development company.
Some prominent and credible ones include
– OpenSea
– Rarible
– SuperRare
– Foundation
– Set up a Crypto or Digital Wallet
A crypto wallet is used to store cryptocurrency and send and receive NFTs. Some of the recommended ones include:
– Alpha
– Cybavo
– MetaMask
– Trust
– Transfer currency:
Store some currency in your digital wallet. Also these platforms will have specified cryptocurrencies that they trade in. Identify the currency in which your targeted NFT is being traded in.
– Identify and Purchase:
Once you’ve completed the above steps, you can focus on the actual purchase. Go through the listed NFTs and shortlist which NFT you want to buy.
NFTs are bought at fixed price or you can place a bid on it. Purchasing it at the fixed price, means you get immediate custody. If you go for via a virtual auction, you can place a bid.
How to resell an NFT
In case you want to further trade and resell, you list your digital asset on the exchange. The process to be followed is the same as with purchase. Set a fixed price or list it for auction. Once sold, the funds are transferred into your wallet.
Mitigate Risk
we highly recommend safe purchase habits. Be thorough in your research and engage on reputed platforms only. Ensure caution. Do not share your private keys and avoid public computers when trading in NFTs. In India as well as other countries, NFTs are also governed by the cryptocurrencies regulatory issues. There is no legal framework regulating them independently.
What are the Pros and Cons?
All investments carry some amount of risk. NFT Investing is an emerging investment option and as with any new financial instrument has its advantages and disadvantages. The upsides include offering a fair price, exclusive ownership, transparency and provenance. NFT transactions are expected to see high volumes and sales as interest rises.
However, one must also consider the risks. The RoI may not always be the same or higher.
Just as is the case with stocks. You also need to consider the trading fees involved and factor that into your expenses.
Do you want to know more?
We hope this article was helpful. If you would like to know more about investing in NFT and NFT development services, contact EDIIIE.