In the first quarter of 2022, almost 7.5 million NFT sales took place. While this is about a 50% decrease compared to the previous year, the total trading volume saw a big increase. Thanks to these staggering numbers, investing in NFTs has become even more popular.
But how do you even start?
Luckily, with this simple guide, you can learn all you need to know about NFTs and how to start investing in them
So let’s jump straight in.
What Is An NFT?
Non-Fungible tokens, or NFTs, are digital assets that are created and secured using blockchain technology. Because of this, there are many types of NFTs. But, they can essentially signify the ownership of anything digital. The most popular NFTs remain collectables and avatars, though.
One of the most notable NFTs in recent years has been the ‘bored apes yacht club’ or BYC.
But You’re Probably Wondering, How Do NFTs Work?
Most NFTs are linked to the cryptocurrency of Ethereum, Ether. When you buy an NFT, the transaction is loaded onto a network of computers. The owner of the NFT is then given an access code.
Remember, the digital asset or piece of art isn’t stored on the blockchain. Instead, the data is just the information of the person who currently owns it.
Benefits of NFTs
There are several benefits to investing in NFTs. Firstly, they’re highly accessible, so anyone can start investing in them. However, they’re also highly secure. NFTs can be bought anonymously via a secure online source and safely stored in a digital wallet of your choice.
Even better, investing in NFTs exposes you to blockchain and a world of new assets. They’re also highly transferable.
And because NFTs are non-fungible, they’re all completely unique!
As with anything, there are a few downsides to NFT investments though. While they’re highly accessible, NFTs can have high network fees. In many cases, it can cost you hundreds of dollars in Ethereum gas fees to procure the token.
Unfortunately, NFTs are also high-risk and have the potential for very large losses. Like cryptocurrencies, NFTs are extremely volatile, so proceed with some caution.
How To Invest
Investing in NFTs isn’t difficult, but a helping hand always helps. Here are the steps you need to start your NFT investment journey!
Open an Account at an NFT Market Place
The very first step is to create an account with an NFT marketplace, like OpenSea. Luckily, buying from OpenSea is simple – its platform works like eBay, so there’s no learning curve.
Create a Digital Asset Wallet
Before you go off and buy NFTs, you’ll need a digital asset wallet to store them. This ‘crypto wallet’ can either be software-based or a hardware device, like a secure hard drive. The choice is up to you. Software wallets are often far more convenient, but hardware-based ones are often far more secure.
Purchase Ether
Next, you’ll need to either buy some Ether or link your credit card to your digital wallet. From there, link your digital wallet to your NFT marketplace account.
Buy an NFT
Now you’re ready to start buying! Your NFT marketplace of choice should walk you through the process. Remember though, most NFT marketplaces function like auction sites, so it may take several hours to complete a transaction.
From there, you can decide what you want to do with your new digital asset. You can either keep it or after some time, sell it off.
Investing In NFTs: Should You?
Despite what many think, Investing in NFTs isn’t difficult. With this simple guide, you can go forth and expand your investment portfolio!
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