Buying and selling NFT tokens and investing in them
Non-fungible tokens, or NFTs, have grown in popularity during the pandemic, leading many investors to question how to buy them.
Many are being created recently and many have sold for millions of dollars, artists, collectors, and speculators alike have flocked to the action as the prices of cryptocurrencies and other digital assets soared.
NFT tokens herald the birth of new digital assets that can be bought and sold, and they are not cryptocurrencies as only one or several copies are available.
How to buy, create and sell non-fungible tokens
These tokens are created and managed on a blockchain, the same digital ledger technology system used by Bitcoin and other types of cryptocurrencies.
NFT is usually based on the Ethereum network, but other chains are used by some non-fungible tokens as well, such as Solana and Polkadot.
Think of these digital tokens as a kind of virtual certificate similar to a certificate or physical address you might provide to prove that you own a physical asset such as real estate.
It is a digital proof of ownership originally designed for digital assets and art, yet it can also be used to secure ownership of unique physical assets for everything from possessions to collectibles to physical artwork.
How to buy NFT Tokens
These tokens are bought and sold via a purpose-built NFT marketplace, such as Amazon or Etsy, only for digital assets These markets can be used to buy NFTs at a fixed price or act as a virtual auction, like an exchange system for buying and selling cryptocurrencies and stocks.
The prices on non-fungible tokens listed for sale by auction are therefore volatile and their value changes according to demand, and the higher the demand, the higher the price.
One of the main differences between NFT and stocks and cryptocurrencies is that stocks and cryptocurrencies are exchangeable which means that each unit is exactly the same as the other, unlike these tokens are non-fungible and are unique.
To bid on these digital assets, you will need to open and fund a crypto wallet on the NFT marketplace.
A crypto-wallet like a digital wallet on an e-commerce platform stores the cryptocurrencies needed to purchase NFT.
The wallet must be funded with the cryptocurrency needed to purchase the target NFT, for example, an NFT built on the Ethereum blockchain technology may require the purchase of quantities of Ethereum.
There are a range of platforms you can buy these tokens from, including the best NFT OpenSea Markets, Rarible, SuperRare, and Foundation.
There are other niche markets that specialize in certain assets, for example the NBA Top Shot is owned by the National Basketball Association and sells clips of players' performance.
How to sell non-fungible NFT tokens
Once you own the NFT, the digital assets are yours to do as you please, you can keep them as a collection, display them for others to see, or use them as part of a larger digital project.
You can also offer it for sale Marketplaces charge fees for NFT sales This fee can fluctuate based on the Blockchain network that NFT is using since the blockchain computing needed to verify NFTs is energy-intensive, otherwise known as “gas fees.”
To sell a digital asset you own, you must upload the piece to the market or platform of your choice, provided the marketplace supports the blockchain on which the NFT is built.
From there you can choose to list it for sale at a specific price or choose to sell in an auction style where buyers bid to sell at the higher price.
Once uploaded the marketplace will verify the asset, after selling it the marketplace will handle the transfer of NFT from seller to buyer and also transfer crypto funds to your wallet minus the listing fee and other related blockchain computing expenses.
Is it appropriate to invest in NFT tokens ?
The new NFT movement is early evidence of the potential cryptocurrencies that should make the digital economy work for more people, but during the third quarter of 2021 $11 billion of these tokens were sold, continuing to grow from the $1.3 billion in sales made in the second quarter. .
Creating and selling digital assets can be very beneficial for content creators, but when it comes to buying NFTs for their collectible value, they are a speculative investment, the value is uncertain and will fluctuate based on the demand for the work itself.
There is no set rule as to which collectibles will increase in value and which will not, but identifying a new trend for NFT early on can pay off a lot later. Some digital artwork that originally sold at small values has sold for several thousand dollars.
If you are interested in art, music, etc. and you enjoy collecting, then subscribing to an NFT investment might make sense for you.
Some things to look for when buying include the originator of the asset, how unique the piece is, the history of the asset's ownership, and whether the asset once owned can be used to generate income (eg payment for viewing the part or re-licensing fees).
When you invest in stocks, the stock price is how much the investment is worth, if you buy a stock at a certain price and then sell it when it is at a higher price you can make a profit, same with cryptocurrencies.
However with digital art, how much it is worth depends on how much someone is willing to pay for it, there are no guidelines on how much a gif, tweet, photo or artwork is worth, so anyone can guess how much you can get for it or what If you will be able to sell it at all.
If you are determined to invest in non-fungible tokens, limit your spending and only buy what you can afford to lose, the prices here are highly speculative, so there are no real factors to predicting prices and making profits.