Globally, the blockchain market was estimated to be worth $5.92 billion in 2021, and it’s growing at a rapid pace! One aspect of this market that’s breaking through with prominence is the practice of NFT investing.
An NFT is a non-fungible token. Non-fungible means that a particular item (token regarding NFTs) can’t be replaced; it’s unique. Blockchain technology allows non-fungible tokens to exist and their popularity is growing.
In this guide, we’ll talk about the current thoughts and trends concerning NTF investing. We’ll let you know about any potential risks involved and some of the best practices currently on offer when it comes to putting money into the NFT market. So let’s get started!
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NFT Examples
You already know what NFT stands for, but to better describe an NFT, it’s best to look at some common examples. Some examples include:
- Digital artwork
- In-game items
- Domain names
- Music and videos
- Digital identities
- Memes and GIFs
- Tweets and other text
In general, NFTs can be any sort of digital collectibles. However, NFTs can be real-world items too. The whole idea is that any NFT item is unique and it should stay this way due to it being logged onto a blockchain network’s ledger.
The scope of what an NFT can be is vast, and once you start exploring the market, you may be shocked by how weird and quirky some of the most expensive NFTs are! You should also be aware that many people now trade and invest NFT in the Metaverse.
To understand NFT concepts much better, we recommend you check out a resource from sandbox builders involved in the market. By looking at how people are constructing NFT concepts within the Metaverse, you can get to grips with some of the latest trends to help you invest more wisely.
NFT Market List
Several NFT marketplaces have sprung up over the last few years in response to the demand of NFT investors and collectors. Here are some of the more popular options to check out:
- OpenSea
- CryptoPunks (from Lava Labs)
- Axie Marketplace
- Rarible
- SuperRare
- NBA Top Shot Marketplace
- Nifty Gateway
- Foundation
We should also mention Mintable, a marketplace with backing from Mark Cuban. There’s also Theta Drop, which launched itself with a focus on the World Poker Tour and its digital collectible items.
Finding The Best NFT Marketplace
With so many options on the table it can be hard to find the best NFT marketplace. You need to find something that suits you as an investor and collector, not just something that’s been suggested to you. In short, the best nft marketplace is one that you’ve researched, know it isn’t some sort of scam, and is easy to use, fast, and has a lot of options. Some of the newer nft marketplaces are a lot more future-forward. They’ll include fair prediction launches, a community hub, and are built around pure usability for the investor. Don’t just jump straight in at the first marketplace you see…look around. The biggest marketplace isn’t always the best.
Investing in NFT
To begin investing in NFTs, you need to get yourself an account at an NFT marketplace. OpenSea is probably the most popular marketplace right now, and it’s a good place to start for beginners. Rarible is another great option to consider.
Beware, there are many fraudsters out there that will try to mimic some of the popular platforms in various creative ways. So make sure to double-check you are on the right platform.
Set Up a Digital Wallet
Next, you’ll need to set up a digital wallet. This is where you can store cryptocurrency tokens along with your NFT keys.
There are two main wallet types to choose from: digitally integrated wallets and external hardware wallets. The easiest option is to go with an integrated wallet on a platform such as Coinbase. MetaMask is a go-to option for many.
Funding Your Account
If you are new to both cryptocurrencies and NFT investing, then your first port of call is to buy some cryptos. To do this, you’ll need to connect your credit card or bank account to the platform you use as a digital wallet.
Depending on which wallet you use, there may be certain verification criteria to go through. These will be for security purposes.
Buying NFTs
Buying an NFT is a pretty simple process in most cases. You go onto the marketplace, search around for what you want or take a liking to, then buy your NFT. On many platforms, the process is as simple as buying something on a site like Amazon.
You’ll find that some NFTs are free, while others have values running into the millions of dollars! To begin with, we recommend you make small NFT purchases so you can better understand the process before committing to higher-level NFT investments.
What’s the Best NFT to Invest In?
The best NFT to invest in is all down to your personal preferences and what you research the most. Yet, since NFT is very popular right now, it’s an interesting place to start.
If you are a gamer and know there are in-game NFTs you can buy, you might want to start there. However, where NFT art is pretty simple to invest in, in-game NFTs might have more complexity to them if you want to maximize your gains with them.
For instance, some NFT games allow you to use the in-game NFT you purchase to provide you with an income stream. There may be certain criteria that you have to fulfill every day to earn that income by playing the game. With NFT art, you just buy and hold it until a time comes when you might want to sell it for a profit.
With NFT music, the original creator might maintain a royalty percentage that they get whenever someone resells the NFT they created. Other musical artists may relinquish all royalties to the buyer.
A Sensible Approach to NFT Investing
Since NFT investing is very new and unknown in many ways, people see it as a high-risk investment. So, a sensible approach to NFT investing is to buy NFTs as part of a wider portfolio.
For example, a sensible investor might invest no more than 5% in NFTs. This low investment amount would be to safeguard them against a volatile NFT market.
NFT Investing Explained
NFT investing is an exciting new way to make money. NFTs are a pretty new concept and there’s no doubt we will see some incredible developments in the industry. Use this guide to kickstart your interest in buying NFTs.
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