NFTs (non-replaceable tokens) have revolutionized the world of digital art by changing the approach to collecting and selling unique assets. These tokens are single digital items encrypted on the blockchain. Due to their uniqueness and inability to be directly exchanged, each NFT represents a separate value. NFTs can include artwork, music, gaming items, and more.
Read more about NFTs in the article Non-Fungible Token (NFT): What It Means and How It Works. And now, we’ll break down how to invest in NFT in 2024, focusing on current trends and opportunities.
The main types of non-mutualize tokens
NFTs (non-replaceable tokens) are unique assets on the blockchain with individual codes that distinguish them from each other. They cannot be exchanged equivalently because each NFT represents an exceptional value and rights to a specific object. They open new possibilities for digital collection, monetization, and asset ownership.
The main types of NFTs are:
- digital art – artists create unique works of art that are then sold as NFTs, one of the most popular trends;
- sports highlights and music – audio files, sports videos, or match highlights can also be tokenized, allowing fans to own unique copies;
- real-world assets – NFTs can tokenize ownership of real-world objects such as real estate or collectibles;
- domain names – unique domain names that are registered as NFTs and can be sold or used by the owner;
- digital versions of licenses, diplomas, or certificates;
- patents – legal rights to inventions can be tokenized, making them easier to transfer;
- tickets and attendance confirmations – NFTs can be used for access to events or to confirm attendance at an event;
- documents – important papers such as contracts can be encrypted and validated via blockchain.
NFTs are changing the approach to ownership and monetization by allowing creators to interact directly with audiences, eliminating middlemen, and making transactions more transparent.
Marketplaces for buying and selling NFTs
Today, NFT marketplaces exist for buying, selling, and exchanging non-mutualizable tokens – special online platforms created to simplify these procedures. Before the emergence of such marketplaces, interaction between buyers and sellers of NFTs was difficult due to the lack of centralized resources. NFT marketplaces have become a solution to this problem, offering convenient conditions for thousands of creators, collectors, and investors. These platforms function similarly to cryptocurrency exchanges but focus on digital assets such as art, music, sports highlights, and other types of NFTs.
Most popular sites:
OpenSea
The largest NFT marketplace, supporting multiple blockchains, including Ethereum, Polygon, and Solana. The platform charges 2.5% for secondary transactions and between 2.5% and 10% for primary drops. OpenSea offers a wide range of NFTs, including art, domain names, and virtual worlds.
Magic Eden
A community-oriented marketplace on the Solana blockchain. It does not charge listing fees and commissions depending on the transaction scenario. The platform rewards users with Magic Ticket tokens that give access to MagicDAO.
Rarible
A decentralized marketplace that supports multiple blockchains such as Ethereum and Polygon. Rarible charges a commission based on the value of the transaction: the more expensive the item, the lower the commission percentage. RARI token holders can participate in the management of the platform through the DAO.
Binance NFT
Marketplace from the largest crypto exchange, Binance. It offers a low 1% transaction fee and a wide selection of NFTs, including collectibles, events, and mystery boxes.
Niche Marketplaces
Specialized platforms like NBA Top Shot and NFL All Day focus on selling sports NFTs. These marketplaces allow fans to buy, sell, and trade official digital collectibles, as well as participate in various drops and challenges.
Other platforms
In addition to those listed above, there are many more NFT marketplaces, such as:
- SuperRare – a platform for unique digital art with a 15% commission on initial sales and 3% on transactions;
- Foundation – a marketplace for auctions of exclusive NFTs, charging 5% on each sale;
- KnownOrigin – marketplace for exclusive digital art with a 15% commission and royalties for artists on resale;
- Nifty Gateway – a marketplace that supports fiat payments, with a commission of 5% + 30 cents per transaction;
- Zora – a decentralized, commission-free platform focused on direct NFT management.
These marketplaces provide a variety of opportunities to buy and sell NFTs, offering different commission models and functionality. When choosing an NFT marketplace, it’s important to consider a few key factors:
- what type of NFT you want to buy or sell;
- the percentage of transaction and listing fees;
- the user interface and convenience of the platform.
Most importantly, check the marketplace’s reputation and user reviews to avoid potential scams and secure your transactions.
Step-by-step instructions for buying NFT
Buying NFT may seem complicated, especially for beginners, but the process is quite simple and involves several steps:
- Create an account.
Choose an NFT platform, such as OpenSea, and sign up by creating an account. You will need to connect a cryptocurrency wallet, such as MetaMask or Coinbase Wallet, to store cryptocurrency and manage transactions.
- Funding a cryptocurrency wallet.
After creating a wallet, fund it by purchasing cryptocurrency on a reliable exchange such as Coinbase or Binance. Make sure you use tokens supported by your chosen NFT platform.
- NFT Research.
Browse what’s available on the NFT platform using search or categories. Find digital assets that interest you, such as art, collectibles, or virtual lands.
- Bid on or buy an NFT.
If the NFT is for sale at a fixed price, click the Buy Now button. If it is available at auction, read the rules and bid, keeping an eye on the current price.
- Transaction Confirmation.
Before finalizing your purchase, check the details of the transaction, including price and commission. Confirm the transaction using your chosen payment method.
- Managing your NFT.
Once you have successfully purchased your NFT, you will be able to view and manage it through your wallet and account on the platform. The NFT will now become part of your collection, and you will be able to track its status and owner.
Ways to sell NFTs
There are several ways to sell NFTs, each offering unique opportunities for creators and collectors. One of the main options is to create a unique NFT and put it up for sale. It can be digital art, music, or other original content that you want to be tokenized on the blockchain. To do this, you need to create a high-quality digital item, register on the NFT platform, upload it, and follow the instructions for release.
The second option is to resell the NFTs you have already purchased. This can be profitable if you have purchased tokens that have become popular or valuable. Many platforms allow royalties for creators, which means you will receive a percentage of each subsequent sale of your NFT.
As for the selling process itself, you have the choice of putting your NFT up for a fixed price or auction. In the former case, you offer buyers the opportunity to immediately purchase your NFT at a fixed price, while an auction allows the market to set the final price through competitive bids. Both options have their advantages and can be chosen depending on market conditions and your personal preferences.
When selling NFT, it is important to avoid scams. Always check the addresses of the wallets you interact with, use only reliable platforms, and read the terms and conditions carefully to avoid unpleasant situations. Also, be wary of offers that seem too good to be true.
Step-by-step instructions for selling NFTs
You can sell NFTs through various marketplaces, and the process involves a few key steps. Here’s how to do it:
Go to your profile on the NFT platform and select the specific token you want to sell. Click on it to open the details page, where you can see all the information about your NFT.
If you haven’t created it yet, you’ll need to use a minting platform such as OpenSea, Rarible, or others and follow their instructions for creating and uploading your digital content.
On the NFT details page, find the option to sell your NFT. Here, you can set a fixed price or choose an auction format where potential buyers can bid on your token.
Fill out additional information about your NFT, including a description and terms of sale. If you choose a fixed price, specify the amount you want to sell the token for. When setting the price, take into account any fees charged by the platform as well as the market for similar NFTs. This will help you set a competitive price and attract potential buyers.
If you decide to hold an auction, familiarize yourself with the types of auctions supported by your chosen platform – it could be an English or Dutch auction.
When creating a listing, make sure to include an accurate description, quality, and other important details about your NFT. Double-check the accuracy of all data and make any necessary adjustments before confirming the sale.
Once the buyer agrees to your price or wins the auction, confirm the sale. Once the transaction is complete, the NFT will be transferred to the buyer’s wallet.
Following these steps will help you successfully sell NFT and avoid common mistakes.
FAQ
How safe are the trading platforms?
Most NFT trading platforms are safe but require caution on the part of users. It is important to scrutinize the information and advice you receive. For example, even celebrities such as Kim Kardashian and Floyd Mayweather have faced legal problems due to their involvement in blockchain projects, highlighting the risk of insufficient regulation.
It is advised to invest only the amount you can afford to lose and avoid spontaneous buying decisions. First-time users are advised to seek help from people they know and carefully research the projects they want to invest in. It is also worth following the recommendations of platforms such as OpenSea, for example, not to share the secret recovery phrase and to beware of suspicious links.
Remember that even in well-moderated communities such as Discord, scammers can occur, so it’s best to disable the ability to send private messages from strangers.
Why is it profitable to invest in NFT?
Investing in NFT can be attractive for several reasons. First, it’s an opportunity to profit from unique digital assets such as artwork, music, and collectibles. Second, NFTs allow you to support and interact with artists and content creators directly, which creates new forms of monetization and recognition. In addition, the growing interest in digital assets and blockchain technologies may provide value to NFTs in the future. However, like any investment, investing in NFT comes with risks, and it is important to research the market thoroughly before buying.
Is investing in NFTs still a profitable endeavor?
Yes, NFTs can still be profitable, but their value and demand fluctuate depending on the market and trends. Some collectibles and works of art still achieve high prices at auction, while others may not live up to expectations. Success in investing in NFT requires careful study, analyzing current trends and understanding the risks.
How do I get started with NFT?
To get started with NFT, choose a trusted blockchain platform. Then, create or buy digital assets and use decentralized financial tools to manage them. Digital artists can mint their work as NFTs, while collectors should focus on acquiring assets with the potential to grow in value.
What are some ways a beginner can make money from NFTs?
There are several ways a beginner can make money from NFTs. One is by creating and selling your NFTs. If you are an artist, musician, or author of unique content, you can convert your work into NFTs and put them up for sale on marketplaces. You can also engage in reselling NFTs, buying them at a low price and selling them for more when their value increases. Participating in projects that offer free NFTs can also be profitable – these tokens can be sold or used for other benefits. If you don’t want to delve into the details of the market, consider investing in specialized NFT funds, which will allow you to diversify your investments without having to monitor each asset yourself.
Do NFT marketplaces make money, and in what ways?
NFT marketplaces make money by charging commissions on sales and listings. When users sell their NFTs, the platform usually retains a percentage of each transaction. In addition, some marketplaces may charge a fee for creating or listing NFTs on their platform. These fees provide revenue to maintain and develop the platform’s services.
Are NFTs real money, or not?
NFTs are not real money but are digital assets that can be bought, sold, or exchanged. While they can have significant monetary value and can be used as investment instruments, their value depends on the supply and demand in the market rather than a stable monetary equivalent.
Summary
The world of NFTs is a unique and dynamic ecosystem where technology, art, and collecting come together, opening new horizons for creativity and investment. Market participants have the opportunity to not only buy and sell unique digital assets but also to create their NFTs, allowing them to generate income from primary and secondary sales. Despite the risks associated with this new field, with the right approach and creative thinking, everyone can find their niche and take advantage of the rapidly evolving market.