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Non-fungible token (NFT) popularity is growing. Collectors and investors are looking to buy and sell these hot digital assets, and the prices are insane. These one-of-a-kind, non-fungible digital art pieces have disrupted markets and sold for millions of dollars.
Major companies and brands such as AMC, Under Armour, Nike, and Adidas have stepped into the game. In addition, NFTs have become status symbols for famous athletes and celebrities.
Getting started with NFTs isn’t hard. There are several NFT marketplaces to create, buy, and sell these desirable virtual assets. However, buyers and sellers must understand NFTs and the marketplaces.
What is an NFT?
NFTs aren’t new. They’ve been around since the launch of Bitcoin in 2009. They grew from blockchain technology into a new type of investment–virtual assets.
Fungible refers to an equal asset exchange. For example, a dollar is mutually interchangeable with another dollar. Therefore, both dollars have the same value.
On the other hand, an NFT isn’t interchangeable. One NFT doesn’t necessarily equal another. An NFT is a digital collectible containing art, virtual avatars, video, tweet, music, or audio. They represent tangible and intangible items. However, you can’t replicate its digital signature.
In 2021, sales reached $2.5 billion.
What is the Blockchain?
Cryptography, the act of writing code, has existed for years. Decentralized databases with node-to-node connections secure the blockchain’s infrastructure.
There are public, private, consortium, and hybrid blockchains where millions of transactions occur every second. For example, financial institutions, medicine, security, and digital currency exchanges use blockchain technology for everyday business. And public blockchains facilitate the sale of common cryptocurrencies like Bitcoin, Ethereum, and Litecoin.
Anyone can use the open ledger to record transactions where every record is triple-checked with a consensus mechanism.
OpenSea is a popular NFT marketplace. Devin Finzer and Alex Atallah founded it in 2017. It features an easy-to-use interface for beginners to navigate and make trades easily. In addition, the NFT exchange allows users to mint, buy, and sell domain names, virtual lands, trading cards, tweets, and other collectibles.
OpenSea accounts are free, and you can start browning in minutes. It features several cryptocurrency wallets, including Bitski, MetaMask, Authereum, Coinbase Wallet, TrustWallet, and Dipper. Furthermore, it accepts more than 150 cryptocurrencies.
Users transfer Ethereum tokens to their wallets to make a sale where prices are set by the digital asset owner or via an auction. However, the platform also uses the Polygon blockchain.
Rarible sets the stage for digital artists and creators to issue and sell their artwork as verified assets. The platform links digital creators and sellers via an Ethereum ecosystem.
Users will find art, collectibles, music, videos, and other items in the marketplace. In addition, the website doesn’t have restrictions on entry, and all creators can sell pieces of art without prior approval.
LooksRare is a solid exchange platform to buy and sell NFTs. Its simple framework offers security, scalability, and speed.
The exchange forum operates like other platforms with standardized tokens with Ethereum. LooksRare rewards traders and creators with 100% of the trading fees and activity on the platform.
DraftKings is new to the NFT marketplace to hit the market. Users buy, sell, and trade NFTs on DraftKings. Scheduled drops get posted daily.
The platform exchange offers gambling and gaming to fantasy sports and NFTs. In addition, you’ll find some of the top sports NFTs like Tom Brady, Wayne Gretzky, Derek Jeter, etc.
The marketplace runs on Ethereum but also accepts Fiat payment methods. That means buyers don’t have to own cryptocurrencies to buy NFTs. Unfortunately, buyers can’t move their NFT from Draftkings. So, active NFT buyers will be stuck using the DraftKing platform until this can be fixed.
Binance is a popular, easy-to-use platform for NFTs. The exchange accepts Binance coins and Ethereum cryptocurrencies.
Users find virtual land, art, gaming items, and more for a flat 1% trading fee.
6. Larva Labs
Larva Labs is best known for the CryptoPunks NFT project. Since they gave the original NFT was given away for free, some CryptoPUnks have sold for millions. Unfortunately, the original is sold out but can be purchased via third-party marketplaces.
7. NBA Top Shot Marketplace.
If you’re looking to get NFTs from the National Basketball Association and the Women’s National Basketball Association, check out the NBA Top Shot Marketplace. Collectible NFTs, such as video clips and play highlights, are bought and sold using the Flow blockchain built by Dapper Labs. You’ll find NFT collectibles for a few dollars and up.
Mintable is an Ethereum blockchain marketplace. Billionaire Mark Cuban backed the easy-to-use and well-established platform to mint, buy and sell NFTs. In addition, Mintable introduces a “rarity meter” to evaluate the rarity and uniqueness of NFTs when data is available.
Users can find NFTs without hours of research. However, they must have a cryptocurrency wallet with Ethereum.
Nifty is a high-end marketplace with eye-catching NFTs. The platform is home to many celebrity NFTs and offers limited edition sales that time after a specific time. Users purchase NFTs with Fiat currency, including credit cards.
The scarcity fuels more robust secondary sales. Some of the world’s most expensive NFTs have sold at Nifty, including Pak’s The Merge, for $91.8 million.
SuperRare describes itself as Instagram meets Christie’s. The platform focuses on unique, single-edition digital artworks created by a small number of artists. They are perfect for social environments and offer a built-in social network.
The digital collectibles are secured by cryptography on the blockchain. Sellers and buyers must have a crypto wallet with Ethereum for transactions.
NFT Marketplace Considerations
NFT buyers and sellers must review the marketplace terms of service. Not all of these decentralized applications are created equal. They differ in how they are encrypted and have obtained the rights, licenses, and permissions to create, display, and sell NFTs.
An NFT is a token, not a physical asset. The digital file (an image, video, audio file, etc. ) is uploaded to the platform and linked to a blockchain-based token. Buyers must verify their rights in the underlying asset. The transfer of ownership must be documented. Buyers and sellers must consider the names and likeness of the NFT to ensure that its owner has the intellectual rights and permissions to use the asset as they desire.
How To Buy NFTs?
- Get your finances in a good place. Avoid bad debt. Establish an emergency fund, and stop unnecessary spending. Remember that buying NFTs is extra, and their long-term value is speculative. You need a solid financial plan that ensures your ability to be financially independent and free. Then, you can buy and invest in NFTs.
- Set up a cryptocurrency wallet with digital money. Buyers must purchase a digital cryptocurrency that the NFT marketplace accepts.
- Connect an online wallet to an NFT marketplace. Then, browse the marketplace and make a purchase. Finally, you can store your NFT in your crypto wallet.
- Protect your purchase. NFTs must be stored safely to prevent being hacked. Consider using a hardware storage wallet like Ledger or Trezor. Hardware wallets use seed phrases, touch authentication, and offline measures to control access to hackers.
Should You Buy NFTs?
The future of NFTs is uncertain as their current popularity doesn’t tell the whole story. NFTs were virtually worthless for many years. Their value rests between buyers and sellers.
Demand drives the price, not fundamentals. As a result of market volatility, you may sell it for more or less than you paid. Unfortunately, there’s always a chance you won’t be able to sell it.
Buyers and investors should evaluate the risks and benefits of NFTs compared to traditional and alternative assets (stocks, cryptocurrencies, digital real estate, commodities, and physical collectibles) to make the best decision for themselves.
The Bottom Line
NFTs are the latest obsession on the blockchain. If you’re looking to buy or sell an NFT, you’ll need a marketplace. This list of the ten best NFT marketplaces is a great start. Choose the marketplace that fits your NFT niche and blockchain. Most marketplaces use Ethereum, but the footprint is changing. Some accept Fiat and other digital currencies.
Whether you’re a collector or a creator, approach NFT marketplaces with your homework. Take time to research, understand the risks, and be prepared for a loss (buyers and sellers). The future of NFTs is unknown, and the market is volatile. If the investment decision still drives you, proceed with caution.
This article originally appeared on Wealth of Geeks.
Theresa is the founder of the blog In The Game Investing. She is a personal finance and investing enthusiast, helping professional women take control of their money and investments.