One of the hottest markets right now in the cryptocurrency space is the trending NFT market. These art pieces, backed by blockchain technology, change the way we think about collectibles.
However, what is an NFT, and why does it have value? And, where does one go to buy and sell these growing collectible commodities? While it may seem confusing at first, NFT marketplaces are easier to understand and use than they seem at first glance.
What is an NFT?
An NFT, or non-fungible token, is a unique token that cannot be replicated or held by more than one person. This token is verified by the blockchain backing the token. For most NFTs out there, the Ethereum cryptocurrency network is what supports these tokens and proves that they are one-of-a-kind. While Bitcoin is the most well-known crypto right now, Ethereum can mint and verify these tokens.
An NFT can back anything. Pictures, video, gifs, audio, and all sorts of other digital files can all have NFTs associated with them. That token then acts as a proof of authenticity that cannot be forged or recreated by any means. No one can go into the blockchain and edit where that NFT is addressed to or duplicate it, keeping the NFT unique.
However, an NFT does not keep people from duplicating the digital art backed by the NFT. The NFT itself is the asset that can’t be duplicated, not the digital art itself. When buying an NFT, you’re buying the collectible aspect of the file, not the file itself.
What is an NFT Marketplace?
NFT marketplaces are where a lot of the action around the NFT marketplace occurs. On these marketplaces, you can buy, sell, store, and mint NFTs. These websites are where you go to do almost anything related to NFTs.
To use an NFT marketplace, there are a few things that you’ll need on hand to take full advantage of them:
- A crypto wallet: You’ll want a wallet that works with the blockchain backing the NFT you want to buy. Wallets only work for one type of cryptocurrency, so they must match the coins you’ll use to buy the NFT.
- Cryptocurrency within the wallet: Digital wallets don’t come pre-supplied, so you’ll need to fund the wallet with the cryptocurrency you’ll need to buy the NFT.
- An account with the marketplace: NFT marketplaces require that you have an account to ensure that you can secure your NFTs.
Once you have those items on hand, it’s time to find a place to shop.
NFT Marketplace Options
There are quite a few different NFT marketplaces out there. Each one specializes in a different type or style of NFT. Here’s a list of some of the domain names for the more popular marketplaces:
- OpenSea: The most popular, this NFT platform has NFTs for all sorts of media, including trading cards, artwork, and other digital collectibles.
- Rarible: Utilizing RARI tokens, this marketplace mostly focused on artwork NFTs.
- SuperRare: Concept art is the most popular medium for NFTs minted on this marketplace.
- Nifty Gateway: One of the largest marketplaces, this website has had popular artists such as Beeple and deadmau5 sell NFTs here.
- Foundation: Growing quickly, this marketplace has a large trading volume of NFTs of all kinds.
- NBA Top Shot: Digital cards and videos featuring NBA moments are the most popular on this Flow-backed NFT marketplace.
- Axie Infinity: This marketplace has NFTs of the character from the Axie Infinity game.
- Sorare: On this marketplace, you can buy football NFTs to use in the global Sorare fantasy football league.
- Decentraland: The NFTs on this platform feature virtual land or wearables submitted by users.
- Valuables: This marketplace features NFTs of tweets. Jack Dorsey’s first tweet from back in 2006 sold here in March 2021.
How to Use an NFT Marketplace
Once you know which platform you want to use, there are some steps you’ll need to take to buy NFT art:
Signing Up to a Marketplace
Each marketplace will have different requirements to create an account. However, most of them require you to connect a digital wallet or fund a digital wallet on the NFT platform. In either case, you will supply a password and approve the connection of the platform and the wallet.
NFTs are purchased at either a fixed price by the digital artist or through an auction. Some platforms also allow you to message the NFT artist and negotiate a price privately.
Selling unique digital collectibles is a more involved process than buying them. This is especially true if the artwork in question is novel or made new by the artist. Here is the order of how things go when you want to sell an NFT:
- First, you’ll upload the digital asset to have an NFT made for it. The seller either sets a fixed price or enables an auction to take place for the NFT.
- The platform then verifies the asset. If it gets approved, the asset has an NFT assigned to it, and the sale goes live.
- When the seller accepts a buy or a bid, the marketplace allows the purchase to go through and the NFT transactions clear.
Once you’ve sold the NFT, you can choose to migrate the funds out of the marketplace or use them to purchase some NFTs of your own.
The Ethereum blockchain is the most used system for minting NFTs. So, this platform is where you can expect most NFTs to be minted. Ethereum wallets that can support the ERC-721 token standard are required for NFT marketplaces. That protocol is critical for the creation, purchase, or selling of an NFT on that blockchain.
Most platforms have a shortcut to where you can mint NFTs on their homepage. Follow the instructions that the platform gives to mint your NFT and put it up for sale.
Whether the subject is memes, Cryptokitties, or something more serious, NFTs are a way to own something unique and collectible. Backed by the Ethereum blockchain, these tokens prove that you are the sole owner of the digital asset in question, no matter how many copies may exist on the Internet. Check out one of the marketplaces mentioned above, and think about getting some of your own NFTs!