How to Buy an NFT? The Beginner's Guide
Crypto Basics

How to Buy an NFT? The Beginner's Guide

This week, we will walk you through the ways to buy your first NFT and explain how to identify a promising NFT collections!

How to Buy an NFT? The Beginner's Guide

Table of Contents

The world has become hooked on NFTs.

Jimmy Fallon bought a Bored Ape. McDonald's is issuing NFTs in China. There will even be a movie with the Bored Apes NFT collection. If you haven't yet learned how to buy an NFT, you better do so ASAP. Academy put together a comprehensive beginner's guide to help you buy your first NFT. You will learn:
  • What NFTs are and how you can easily explain them to anyone.
  • How to buy NFT tokens (a guide with screenshots)?
  • The different marketplaces where you can buy NFTs.
  • Five vital tips and tricks on how to invest in NFT collections.

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What Are NFTs?

A non-fungible token (NFT) is a unique token stored on the blockchain. This token can be an image, digital art, a video or audio file, a video game skin, or any other digital asset stored on-chain. The adjective non-fungible means that no two tokens are the same.

For example, you can exchange a one-dollar bill for another dollar bill. Or one Bitcoin for one Bitcoin. They are not identical (dollar bills have serial numbers) but can be exchanged.

Say the president (or any other person) signs one of the dollar bills. This bill is now non-fungible because each signature is unique. The bill could be exchanged for the other one, but the owner will probably keep it (because it's one of a kind and the president's signature makes it valuable).

A non-fungible token works like the real-world example, only that it is unique on the blockchain for everyone to see and authenticate.

How to Buy NFT Tokens?

To buy an NFT, you need:

  • A crypto wallet: this can be a hot wallet or a cold wallet.
  • Access to a computer and a blockchain like Ethereum (this is where most NFTs are sold, but there are also NFTs on other chains).
  • Funds to buy the NFT: ETH for Ethereum-based NFTs, SOL for Solana-based NFTs, and so on.
Buying an NFT is not much different from any other purchase online. Open an NFT marketplace like OpenSea:
You can search on the top row for a collection or click on explore to browse around and see what you like. Let's say you have won the lottery and can afford one of the highly valuable Bored Apes. OpenSea verifies official collections with a blue tick to prevent fraud (which still sometimes happens):

You can choose one of the Bored Apes you like. Apes with a pink Ethereum symbol are being bid for and have no fixed price. Apes with a price next to a black Ethereum symbol have a fixed price and can be bought immediately.

If you're feeling generous and have the 108 ETH to buy Bored Ape #6846, click on the Ape and see the NFT's price history and an option to buy.

Once you click on Buy Now, you will proceed to the checkout window. Each transaction requires gas fees, although this should not be a problem if you are buying a Bored Ape. However, say you want to bid instead of buying an NFT, remember that the bid itself will cost gas as well.
You can also pay by credit card when checking out. However, the transfer is done in ETH, so you will have to pass KYC if you want to pay by card.

Where to Buy NFTs?

OpenSea is the most popular NFT marketplace. It benefited from the incredible boom of NFTs in 2021 when trading volumes shot up from virtually zero to a record of almost $5 billion in January 2022.
OpenSea was founded in 2017 and was the first in the market, which allowed it to achieve its dominant position today. It has also received investments from several high-profile crypto funds like a16z. Although OpenSea faces criticism from the community for being too centralized and profit-oriented and has been the target of hacks, the platform is still one of the most popular in the NFT space
LooksRare is a decentralized NFT marketplace, which, unlike the centralized OpenSea, redistributes fees to its token holders. You can earn rewards from your NFT sales and re-sales, making LooksRare an interesting alternative. LooksRare burst on the NFT scene with an airdrop to wallets that had crossed a 3 ETH transaction volume threshold on OpenSea. That is how LooksRare tried to get customers from OpenSea and it worked. The two platforms now generate a similar amount in transaction volume:
LooksRare has been criticized as well, mostly for wash trading to artificially inflate trading volumes and for cashing out some of its team tokens. Still, the platform is an interesting decentralized alternative to OpenSea.
Another popular NFT marketplace is Rarible. In contrast to the other two marketplaces, which both focus on the secondary market, Rarible is also a launch platform for new NFTs. In March 2021, more than a third of the sales volume on Rarible came from newly minted NFTs. Like LooksRare, Rarible is a decentralized marketplace and redistributes some of the sales fees back to RARI token holders.
SuperRare is a curated decentralized NFT art marketplace that focuses on listing NFT art by famous and non-famous creators. Artists can use SuperRare as their storefront and independently mint, promote, and sell their work directly to collectors. The platform focuses less on hyped NFT collections and massive trading volumes and more on independent artists selling their creations.
Solanart is a popular NFT marketplace on Solana. Although NFTs on Solana generate only a fraction of the volume of Ethereum-based NFT collections, there are a few popular collections like SolPunks, Degenerate Ape Academy, and Aurory. Solanart works the same way as NFT marketplaces on Ethereum, although traders will be happy about Solana's significantly lower gas fees.

How to Invest in NFTs

As an NFT collector, you can either buy NFTs on the secondary market or mint NFTs from a new collection. Secondary-market NFTs are collections that are already published and thus often promise less price upside. If you aim to make stellar returns, you should consult tools like the NFT Calendar, which gives you an overview of new NFT art collections being launched on all blockchains. Of course, new collections also carry more risk, so mint responsibly.
To help you invest in NFT art, here are five easy tips and tricks on how you can identify a promising NFT collection.

Treat NFT Investing Like Investing in Tokens

You should not invest all your money in one cryptocurrency. Equally, you should not invest all your funds in only one NFT collection because NFTs are even riskier than cryptocurrency. Assume that many collections will go to zero, but a few will make it. Treat NFT collections like lottery tickets, where only a few can win.

Check the Team

If the team is not doxxed (public), they should at least be communicating regularly with the community. If the team is highly involved in the Discord and has regular AMA sessions, that is a good sign. Trust your gut feeling and if you think the team will work on the project even in bad times.

Check Community Involvement

Does the community have a lot of grassroots support or big influencers? Ideally, you want both, but grassroots support is more important. These fans will stick with the project even in bad times. The more grassroots support a project has, the higher the chance that influential people will find the collection and get involved.

Look for a Narrative

NFT art comes in waves. Some months it is booming and other months are very quiet. Look for a good narrative and if the collection is building a good brand. Even if it does not have much utility yet, you are investing in the collection's marketability in the future.

Try to Evaluate the Future Price Action

NFT collections are highly speculative. You should ask yourself if the NFT collection has a chance of intriguing bigger investors (whales) in the future. Many of the most important NFT art collections command high prices because the wealthy people holding them have no pressure to sell. Think about whether the NFTs you want to invest in can become interesting to whales.
Finally, Academy has created two guides on how to mint new NFT collections for free:
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