Non-fungible tokens (NFTs) are one of the big crazes in cryptocurrency right now. These tokens represent the sole ownership of digital art, digital files, and other collectibles in the crypto space. Backed and verified by blockchain technology, NFTs can sell for ridiculous amounts right now.
Although this speculative asset is still in its infancy, the idea of owning something that can’t be duplicated is enticing. However, the NFT space isn’t as straightforward as going down to an art gallery and buying a painting. There are certain steps you have to take to get NFTs of your own efficiently and safely.
Step 1: Buy ETH Using a Cryptocurrency Exchange
The first step to buying an NFT is having the funds to do so. NFTs aren’t purchased with standard fiat currency, however. Instead, they are purchased with cryptocurrency.
Since the Ethereum blockchain is the most popular ecosystem for NFT marketplaces to build their smart contracts on, Ethereum (ETH) is the popular cryptocurrency for buying NFTs.
What Exchange to Use?
To purchase ETH, you’ll need to go to a cryptocurrency exchange. There you can buy cryptocurrency using your regular currency of choice. A cryptocurrency exchange works like a stock market site or app. However, instead of buying and selling stocks and stock options, these exchanges allow you to convert your money into cryptocurrency.
When choosing an exchange to buy ETH, you’ll want to make sure it is an exchange that allows you to transfer the Ethereum off of the platform. Most exchanges allow you to do this, but some platforms, such as WeBull or Robinhood, let you buy cryptocurrency but not transfer it off the platform. This enables you to trade the currency based on price action but isn’t helpful when buying NFTs.
Here is a list of some of the popular cryptocurrency exchanges that let you transfer cryptocurrencies off their platform:
- Binance: The U.S. version of this exchange requires identifying documents to use but has a proprietary blockchain backing their platform.
- Coinbase: The U.S.-based, publicly-traded company is the most popular exchange in the United States.
- Gemini: This New York trust company has a small selection of cryptos.
- KuCoin: Based in Hong Kong, this exchange doesn’t have any Know Your Customer (KYC) requirements to buy, sell, and transfer crypto. Instead, the KYC requirements unlock convenience features such as checking accounts and wallet linking.
While all of the above have different KYC requirements, they allow you to transfer crypto off the platform once you create and verify your account.
Creating an account on these platforms requires a valid email address and possibly other identifying information. Many of these platforms also require a driver’s license or another government document to ensure that you are who you claim to be.
Since regulations require many of these exchanges to know their customer’s identities, these additional documents are required based on where the exchange is based.
Buying Ethereum
Once you have your account verified, you’ll be able to send money from the linked bank account to the exchange. Once the money is loaded into the account, you can buy ETH. How much ETH you can buy will depend on the market price of ETH, so make sure that you send enough money to your exchange account to buy what you need for your NFTs.
It’s not uncommon for these exchanges to take a few days to process funds that you load into your account. In a way, you are transferring your money between financial institutions. So, the exchange and your bank have to approve the transaction before you can use the funds.
Step 2: Get a Cryptocurrency Wallet
In addition to having the ETH on hand to buy the NFT, you’ll need to have a wallet that can connect to the NFT marketplace. Specifically, you want a non-custodial wallet or a wallet that gives you complete control over the cryptocurrency within the wallet.
In the cryptocurrency world, a wallet is a place where cryptocurrencies are assigned. Each time you view your cryptocurrency totals, your crypto will be inside your wallet, regardless of which application or website you use.
A wallet has private keys, which are the passwords used to get to the funds in that wallet and prove that the funds are yours. With non-custodial wallets, the only one that has those keys is you.
Since we want access to the funds in the wallet on our terms for this project, using a non-custodial wallet is best. The MetaMask wallet service is a secure wallet provider that allows for non-custodial software wallets to be made. MetaMask wallets also have integrations with many of the NFT marketplaces, making it an excellent choice to use.
Here’s how you would set up a MetaMask wallet on both desktop or mobile devices:
Setting Up MetaMask on Desktop
To set up MetaMask, you’ll want to go to the official MetaMask website. Once you are on the website, you’ll follow these steps:
- Click on the Download button on the website’s homepage.
- Click on the Install MetaMask for Chrome option to be taken to the Google Chrome store. For now, MetaMask only works for the Chrome browser.
- Select Add to Chrome to add the extension into the web browser. The extension should show up as an icon in the top-right of the browser when you are done.
- Click on the icon and choose to set up a new wallet with the Create a Wallet option.
- Create and confirm a password for your MetaMask account after agreeing to the website’s terms and choosing a password you haven’t used before.
Once you’ve followed these steps, you have a MetaMask wallet for you to use! Before you continue, make sure that you write down and store the 12-word seed phrase for your wallet. This seed phrase is used to recover your crypto in case you have to recover the account.
Don’t take a digital screenshot of this seed phrase! Saving this as a digital file makes the seed phrase easier to get, meaning your wallet’s security is much weaker. Write it down and keep the seed phrase somewhere safe.
You’ll also need to confirm your seed phrase in your new MetaMask account. Once you’ve done this through the extension or the app, click on “All Done”. Doing so will finish the set-up process.
Setting Up MetaMask on Mobile
If you want to connect your MetaMask wallet with your smartphone or tablet, MetaMask has an app for both Android and iOS. Here are the steps for setting this up through the mobile app:
- Download the MetaMask app from the App Store or Google Play Store, depending on your operating system
- Open the app once it is installed and select “Get Started”
- Click on “Sync With MetaMask Extension”
- Open your MetaMask desktop extension and go into the Settings
- Click on the “Advanced” option, and then click the “Sync With Mobile” option
- Scan the QR code generated by the program with your phone or tablet’s camera
With these steps done, you’ll be able to review your MetaMask wallet from your phone or tablet.
You can also make your wallet without the browser extension in the mobile app. Follow the steps above until you reach Step 3. At that point, select the “Create a New Wallet” option instead and follow the instructions on the screen to create your wallet.
MetaMask also allows you to connect hardware wallets from brands like Ledger or Trezor. Connecting a hardware wallet gives an extra layer of security to your crypto funds and makes it so that MetaMask can access the hardware wallet while it is plugged in.
Step 3: Transfer Your ETH to MetaMask
Now that you have ETH in your crypto exchange account and your MetaMask wallet set up, we’ll need to transfer over the ETH to MetaMask. This way, the funds will be available to us when we buy an NFT from the marketplace.
To transfer the ETH, you’ll want to follow these steps:
- Go into MetaMask (either the browser extension or the app) and copy your public wallet address.
- Go into the exchange’s website or app and choose to Send or Transfer the ETH.
- Enter how much ETH you want to transfer to MetaMask.
- Paste the wallet address you copied into the To line.
- Hit send and wait for the transfer to happen!
Once you follow these steps, the funds will be sent to the blockchain, and the transaction will be verified shortly. Depending on the number of transactions happening on the chain at that time, you might have to wait a few minutes for the funds to show up in MetaMask.
Gas Fees for Transfers
When you transfer your cryptocurrency, you might notice that the exchange is taking some of the money you want to send from you. Or, you might see that the amount you want to send is less than what the exchange is willing to do. This is because of the concept of gas fees on the Ethereum blockchain.
Gas fees are the portion of cryptocurrency that you pay to transfer the ETH. Gas fees are built into the Ethereum blockchain, so you can’t avoid them unless you never transfer your ETH anywhere. The purpose of these fees is to reward the individuals that confirm the transaction on the blockchain: the miners.
ETH miners are people that commit computing power to the Ethereum blockchain. As a reward for spending resources on these transactions, the blockchain gives these miners the gas fees to confirm the transaction. This way, there is an incentive to commit computing power to the blockchain.
So, don’t think of this as a way for the exchange to take more of your money. Instead, this is a tip to the people out there trying to make the Ethereum network possible. Without miners, the confirmation of transactions or the generation of new ETH would not be possible.
Step 4: Connect Your MetaMask Wallet to OpenSea
Now that you have ETH in your MetaMask wallet, you can sign up for any of the top NFT marketplaces out there and start buying NFTs. Because of the wide variety of NFTs that they offer, we recommend OpenSea for those that want to see a myriad of different kinds of NFTs.
Here are the steps you’ll need to take to connect your MetaMask Wallet to OpenSea:
- On the OpenSea homepage, go to the top right and select My Profile.
- Sign In using MetaMask.
- Once this step finishes, you’ll be in your Profile on OpenSea.
Here inside your OpenSea profile, you’ll be able to change the settings for your profile, review any transaction activities you’ve had before, and check the status of any NFTs you are selling on the platform.
Step 5: Buy NFTs
With everything connected and your wallet funded, it’s finally time to grab some NFTs! Browse through the NFTs offered on OpenSea and see what catches your eye.
Categories of NFTs on OpenSea
OpenSea offers a wide variety of options for NFTs. Here are some of the categories of NFT you’ll find on the marketplace:
- Art: Paintings, sketches, and other visual arts are available under this category.
- Music: In this section, you’ll find MP3s and other audio formats backed by NFTs.
- Domain Names: Various Ethereum-based domain names are paired with NFTs in this section.
- Virtual Worlds: These NFTs feature alternative realities for projects like Decentraland, Cryptovoxels, and The Sandbox.
- Trading Cards: Digital collectible trading cards can be exchanged via NFTs using this category.
- Collectibles: The Mutant Ape Yacht Club, CryptoPunks, Creature World, and other digital collectibles are featured in this NFT category.
- Sports: Sporting brands like Formula 1 feature in this NFT collection.
- Utilities: Redeemable rewards and other turn-ins can be backed by NFTs, thus making this category popular on OpenSea.
Browse through these categories and see what they have to offer. Once you find one that you like, you’ll either have to pay a fixed price for the NFT or enter the auction for it.
Buying NFTs With a Fixed Price
When buying NFT-backed digital assets with a fixed price, you buy an NFT that has a price declared by the artist or creator. These NFTs stay up on the platform until either the artist takes down the NFT for sale or until a buyer claims the NFT for the price listed.
To purchase a fixed price NFT on OpenSea, you’ll want to follow these steps:
- Explore the marketplace and find an NFT you like.
- Review the price history for that NFT, if it exists.
- Select the Buy Now option when you are ready to buy the NFT.
- Review the information OpenSea provides about scammers and authenticity to ensure that you are prepared to buy the NFT.
- Review the transaction in the Checkout screen and select Confirm if everything looks good.
- Confirm the transaction again and wait for the NFT to be transferred into your OpenSea account.
From there, you can keep the NFT on OpenSea or transfer the NFT into a wallet of your choosing. In either case, you are now the proud owner of an NFT!
Making Offers and Auctions
Alternatively, some NFTs sell under auction instead of a fixed price. These NFTs have an initial bid set by the artist and a time that the auction lasts. Once the auction is over, the NFT goes to the highest bidder, and the smart contract completes when the transaction is confirmed.
Auctions are the most popular way digital artists will sell their NFTs. Auctions have the potential to drive prices for NFTs up much higher than they would typically sell for at a fixed price. This is especially true for artists that are popular or who make NFTs that are highly desired.
For these NFTs, it might be possible to negotiate a deal with the artist directly. Reaching out to the artist and offering cryptocurrency immediately could give the artist their payday faster and in a guaranteed amount. In return, you would receive the NFT without having to fight a bidding war or waiting for the auction to finish.
Regardless of how you play the auction game, it’s still the most common way NFTs are sold on OpenSea and other NFT platforms.
Where to Buy NFTs Other Than OpenSea
Although we recommend OpenSea for most NFT buyers, there are plenty of other choices for NFT marketplaces. Here’s a list of NFT marketplaces that offer NFTs other than the categories on OpenSea:
- Rarible: Using the RARI token system, this marketplace has many NFTs up for sale.
- NBA Top Shots: Videos, gifs, and other digital files related to the NBA are available as NFTs from this NFT marketplace.
- Mintable: In addition to their NFT offerings, this site also offers videos on buying NFTs and selling NFTs of your own.
- Christie’s: High-end artwork auctions take place on this NFT platform.
- SuperRare: This platform tends to focus on concept art NFTs, but other media categories can be found here, too.
Still, we recommend OpenSea for your first NFT, thanks to all of the options and categories of NFTs they have. The above marketplaces all have their niches that they excel in, but OpenSea offers a solid collection of many different kinds of NFTs.
Frequently Asked Questions
The world of NFTs is a complicated one. To help you out, here are some of the most common questions we’ve seen about buying NFTs:
Can You Buy an NFT Without Crypto?
Unfortunately, you cannot buy NFTs without cryptocurrency. NFTs are backed by blockchain technology, specifically smart contracts. These smart contracts allow the marketplace to automate the buying and selling of the NFT.
This can all be done without the need for arbiters. Without cryptocurrency, the trigger for the smart contract would never activate or release the NFT for ownership.
To add crypto into your NFT account, you’ll go to a cryptocurrency exchange and buy the crypto there.
Once purchased, you’ll transfer the cryptocurrency into a non-custodial wallet so that you have full control over the funds. That wallet can then be linked to an NFT marketplace and the crypto inside used for transactions on the marketplace.
Can You Buy NFT With Bitcoin?
Right now, Bitcoin isn’t a feasible cryptocurrency to buy NFTs with. This is because Bitcoin doesn’t have the protocols built into its blockchain to create and verify tokens in the way other blockchains do, such as Ethereum or Solana.
For Ethereum, the ERC-721 protocol is the main one that allows for tokens to be created and verified. Since this blockchain was among the first blockchains to have this feature, it became the standard used in the NFT marketplace development world.
This is why Ethereum, not Bitcoin, is the most popular crypto used in buying NFTs.
What is the Best Wallet for NFTs?
Since NFTs are tokens backed by crypto, they are stored and handled similarly to the base cryptocurrency. In other words, NFTs are stored in wallets, just like crypto.
When choosing a wallet to store your NFTs, you want to make sure that it is non-custodial. This way, you have access to the private keys for the wallet, and you can recover access to the wallet as needed.
Finally, you’ll want to ensure that the wallet you use has a good user interface, supports multiple devices, and can work with NFTs from various blockchains.
Summary
Buying an NFT isn’t as simple as going onto eBay and buying one with your PayPal account. Instead, NFT purchases happen through cryptocurrency transactions. This means you have to have a crypto exchange account and the funds to convert into cryptocurrency.
By sending those crypto funds to a wallet and connecting that wallet to an NFT marketplace, you can buy NFTs (selling NFTs is a tad more complex).
Buying an NFT for either its fixed-price or going auction rate will render you the owner of the NFT. Place that NFT into a safe and secure wallet and enjoy your ownership of this unique asset!