The Complete Beginner Guide To NFTs | Part 6 | How To Start Investing In NFTs

In this complete beginner’s guide, we will answer all the following questions and always keep it up-to-date, so make sure you bookmark this guide to your browser:

1. What are NFTs? Everything You Need To Know.
2. How to buy NFTs? The Best Way And The Safest.
3. How To Mint NFTs? The Easy Way.
4. How to Sell NFTs? Comparing The Best Platforms.
5. Best NFTs To Buy And Hold Right Now?
6. How To Start Investing In NFTs.
7. Explaining All NFT Utilities

NFTs are another very exciting spin-off from blockchain technology. NFTs are mostly digital art, but they could also include other assets. Based on blockchain technology, NFTs are a very exciting new way to secure ownership of digital property.

NFTs feature cryptographic data that makes them unique and impossible to duplicate. Of course, NFTs can be viewed without ownership, and that makes us wonder:

What gives NFTs all that value?

Yet, some NFTs have been sold for millions of dollars. Jack Dorsey’s first-ever tweet was sold for $3 million.

The most valuable NFT ever was the piece of art, The Merge, created by artist Pak, which holds the record for the most expensive NFT sold at $91.8 million.

So how can you invest in NFTs? That’s our aim in this part of our complete beginner’s guide to NFTs, and to do that, we’ll be looking at the following:

• What are NFTs?
• Should you Invest in NFTs
• How To Start Investing in NFTs? A Step-By-Step Guide.

What are NFTs?

NFTs are the digital assets that are used to represent real-world valuable assets like art, music, and videos.

NFTs offer a way of guaranteeing ownership of a digital asset. It does this by leveraging the blockchain technology that is used by cryptocurrencies. A blockchain is a public ledger that records transactions that cannot be altered once added. This technology is what makes it possible for bitcoin and other cryptos to be valid ways of payment.

Unlike cryptocurrencies, NFTs are non-fungible which means they cannot be easily compromised.

They are also not equal in value because each NFT has a unique signature that makes trading them for equal value impossible.

For example, EVERYDAYS is not equal to One NBA Top Shot clip, even though they are both NFTs.

Once an NFT is minted, it is launched on the blockchain in a process that’s called “going live.” Once live, the NFT can now be bought and sold with all the records visible for the public to see.

Ethereum is the most commonly used blockchain for the buying and selling of NFTs but other blockchains support the use of NFTs.

Some of the most common NFTs include:

• Paintings
• Shoes
• Music
• Videos e.g sports highlight
• Video game accessories
• Art
• Collectibles.

NFTs provide proof of certifying ownership of an asset. NFTs have unique data like identification codes which are built into the system. Blockchain technology then makes it impossible to duplicate the asset.

Interestingly, many people can view NFTs without owning them. This is even more interesting when you realize that many people spend thousands of dollars paying for assets that they could view or even download for free.

The advantage of NFTs is that though they can be viewed, the original cannot be duplicated. This is useful for artists and people who need to sell digital assets while protecting their ownership of their assets.

Like other cryptocurrencies, NFTs can be traded on exchanges. This is usually done through a peer-to-peer transaction through a supported crypto wallet, or via a virtual auction using a crypto exchange wallet.

Should you Invest in NFTs

NFTs are still a very new investment class without much history to use to judge them. They are certainly useful in the creation and sale of digital art and other assets. This is very important for creators.

Beyond that, purchasing NFTs as investments is a very risky venture. The asset is still very speculative. There are also very few if not any market regulations regarding the trading of NFTs.

The most important predictor of the price of an NFT is demand for the asset or the artwork itself. NFTs are not subject to the same economic forces that cryptocurrencies are subject to.

NFT investing would come easily to those who enjoy the collection of art like paintings, music, etc. Having an eye for good art can help you spot an NFT that would become a winner in a few years.

Some NFTs also come with options that offer the owner of the NFTs a recurring income like a paid commission every time the NFT is sold.

Please note that an NFT’s price is mostly based on what someone is willing to pay for it. Sometimes, nobody wants a given NFT and its price drops to 0.

Always be very careful when investing in an asset class that is still in its beginning stages, especially crypto investments which are known for their extreme volatility.

How To Start Investing in NFTs

Buying NFTs is simple and straightforward once you followed our NFT guide.

Here are our a step-by-step guide for investing in NFTs:

First of all, you need to set up a crypto wallet. Make sure your wallet is Ethereum compatible because most NFTs are on the Ethereum blockchain.

Visit NFT market places; There are various NFT market places where you can buy digital assets and collectibles. Some examples include OpenSea.io, Binance NFT, Rarible, Axie, SuperRare, Nifty Gateway, etc.

Select the Nft you want to purchase. Many marketplaces arrange their NFT collections by categories.

Bid on the NFT. Once purchased, the NFTs will be transferred to your crypto wallet.

Please note that buying NFTs comes with a charge called gas fees as we explained earlier. The amount of gas fees that would be charged depends on the blockchain you are using. Some NFT collectors have reported paying more in gas fees than for actual NFTs.

Conclusion

NFTs are another groundbreaking way that blockchain technology is being used to change our lives.

With NFTs, people can sell and purchase digital assets with the surety that ownership of the NFT is secure.

Their very limited supply contributes significantly to the gain in prices of NFTs. Some NFTs have gone on to sell for millions of dollars.

However, investing in NFTs is a very risky business. It is even riskier than investing in cryptocurrencies. This is because NFTs do not have equal value and that makes them very difficult to trade or exchange.

Make sure to be very careful when trading NFTs as they are both a nascent and a very speculative market.

And always remember to invest what you can afford to lose.

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