How to Buy Non-Fungible Tokens (NFTs)

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Fortnite skins are character decals add no real value to one's gaming experience, yet kids across the world beg their parents to spend hundreds of dollars on them to show off to their friends. Digital ownership is a relatively new concept that is becoming increasingly popular, especially with younger generations. NFTs take digital ownership to the next level with the help of the blockchain.

Prior to NFTs, digital ownership relied on central servers of companies, which can be manipulated. After the incident at Travis Scott's concert, for example, Fortnite deleted users' Travis Scott skins, leaving them with nothing. The only way to truly own a digital item is through ownership on a public blockchain; NFTs aren't controlled by a central entity, allowing for true ownership of these assets.

In December 2021, Pak’s ‘The Merge’ set a record for the highest selling non-fungible token (NFT) to date. Almost 30,000 collectors pitching together for a total cost of $91.8m. Pak is a digital artist and cryptocurrency investor that uses NFTs to release digital artwork that can be verified authentic through the blockchain. 

Non-fungible tokens are much different from other cryptocurrency investments. Many of these tokens don’t have value from their utility like other cryptocurrencies. Instead, NFTs have value because of the media attached to them –– the most common forms of media on NFTs today are art and music, but NFTs have the potential to tokenize any real world asset.

Learn how you can buy NFTs now.

How to Buy NFTs

What is an NFT?

NFTs are typically Ethereum blockchain-based tokens, and they’re used to authenticate digital ownership of whatever asset is attached to the token. Ethereum's blockchain can be thought of as a shared global database and virtual machine. A blockchain token is a uniquely identifiable piece of data whose existence is permanently carved into the chain. Similarly, users of the blockchain are uniquely identified by their wallet address. Anyone can view the contents of anyone else's wallet using a blockchain explorer like Etherscan or The Graph (GRT).

Non-fungible tokens make it possible for artists to release their work digitally without the risk of counterfeits. Sure, you could copy the image file from someone else’s NFT. You could also print out a copy of the Mona Lisa, but neither of these pieces would be considered authentic. Also, many NFTs give special access to events; you need to own a token to get access into these events. For example, Bored Ape Yacht Club has thrown private concerts and parties for token holders, including an open bar, and to get in one must own a mutant or bored ape NFT.

As prices for NFTs increase, the clubs behind these NFTs become more exclusive. Notable members of Bored Ape Yacht Club include Stephen Curry, Snoop Dogg, Jimmy Fallon, Post Malone, The Chainsmokers and the list goes on. Most of these celebrities show off their apes by using them as their profile picture on Twitter, further expanding the influence of the brand.

Similar to fungible tokens like Uniswap or Chainlink, the price of a non-fungible token reflects demand for what the token represents. Many NFTs derive their value from social capital, perks associated with holding them, and other ownership privileges, among other things.

You can think of NFTs as an authentication method for digital media and ownership. These NFTs can't be regular cryptocurrencies, as each NFT has a distinct value, hence non-fungible. Other cryptocurrency, like Bitcoin and Ethereum, are fungible, meaning that each ETH or BTC holds the same value as any other BTC or ETH.

Although NFTs can be expensive, you’re paying for more than just a JPEG file. The token gives you ownership rights to the piece you receive, and you’re able to sell your NFTs on marketplaces like OpenSea and Nifty Gateway. Saying that NFTs are just JPEG files is the equivalent of calling a Google image of Van Gogh's The Starry Night the real thing. Similar to traditional artwork, the value of NFTs comes from ownership of the "original".

How to Buy Metaverse NFTs

The two most known metaverses in which you can purchase land are Decentraland and The Sandbox, but to buy either you will need to make an investment of over $1000. However, for prime real estate, be prepared to pay 6-figures during times of extreme demand.

While land in Decentraland and The Sandbox is extremely limited, Upland has mapped out real-world addresses into a play-to-earn metaverse game. Since there's so much real estate in Upland, you can own a plot of land for as little as a few dollars. Prime locations sell for large premiums, and there are plenty of options to choose from within Upland. Upland's native token, UPX, is used as an in-game currency which can be used to buy and sell land. Get started today and receive a 6,000 UPX token bonus to jump start your metaverse land ownership.

Current Crypto Prices

Based on previous changes in value, NFTs usually appreciate when the fungible token markets are idle. The beginning of 2022 saw many NFTs skyrocket in value, but many collections have since settled down and/or phased out. However, unlike cryptocurrencies, the NFT market shows low volatility spillover within NFT marketplaces. This means that, unlike the heightened volatility cryptocurrencies experience among one another, NFTs act more independently of each other. Additional factors influencing NFT value include utility and projected value based on supply and demand. Check out our table below for the most up-to-date prices on cryptocurrency prices:

How are NFTs Created?

Creating an NFT is a surprisingly easy process. All you need to do is make an account with a marketplace like OpenSea that lets its users create NFTs. You don’t need to know how to make an ERC-721 (NFT) token or have any experience with blockchain for that matter.

Although anyone can create an NFT, that doesn’t mean you can make money selling NFTs. Tons of NFTs made by random people never sell or sell for extremely low values. For an NFT to have value, the media needs to have some sort of significance. NFTs often gain value from the artist’s reputation or the historical significance of the media.

Pros and Cons of NFTs 

NFTs clearly benefit artists who produce digital media. Before NFTs, it was extremely hard to verify the authenticity of digital media, as anyone would be able to copy and paste the file.

However, not all NFTs are valuable, and there are clear pros and cons of NFTs.

Pros

• Non-fungible tokens make it easy to buy and sell digital media online.
• These tokens use the blockchain to make it easy to verify authentic artwork and digital ownership.
• NFTs can make collectibles like trading cards more interactive and engaging.
• NFTs can be used to fractionalize ownership of physical assets.
• NFTs foster marketplace efficiency by eliminated intermediaries and bolstering security.

Cons

• The NFT craze has made prices for some collectibles extremely expensive, and they may not hold their value in the long term.
• If you don’t store your NFTs safely, they may be at risk for being hacked in a similar way to other cryptocurrencies.
• NFTs can be used to perpetuate fraud.

There are many types of NFTs, but the most popular categories are art, music and collectibles. Big name musicians who’ve created NFTs include Grimes, Kings of Leon, Steve Aoki and 2 Chainz.

A lot of artists who use digital media as the medium for their art have been drawn to NFTs, such as Jon Noorlander, Mike Greg and Beeple. Even the public company Score Media and Gaming Inc. (SCR) has started covering NFTs in its weekly show Mint Condition.

One of the first big NFTs was a crypto collectible called CryptoKitties. These digital cats were released back in 2017 are collectible in a similar way to Beanie Babies. There are many other unique collectibles such as NBA Top Shots, Cryptopunks and in-game items for video games.

The Future of NFTs

Right now most NFTs are used to sell digital art and collectibles. This may be a fad or it could be the new form of exchanging collectible assets ranging from trading cards to artwork.

In the future, NFTs can be used to tokenize any real world asset, making ownership of assets transparent and incorruptible. Non-fungible tokens could be extremely valuable for real estate deeds, intellectual property rights and business ownership. While the future of NFTs is uncertain, it's clear that this technology has the potential to change the entire landscape of the internet –– and we are still incredibly early.

How To Secure Your Privacy Trading NFTs

Many NFT collectors value their privacy, and a public IP address can expose one's location, as well as other pertinent information. Moreover, some countries will block the usage of their platforms based on a users' location, leaving traders without the tools they need. A common solution that adds a level of privacy and security for NFT collectors are VPNs. VPNs allow you to mask your IP address and set your location to a desired country. Far and long, ExpressVPN is the best VPN for investors, as it supports extremely high speeds and connects automatically upon receiving internet connection to avoid revealing your IP address. Try ExpressVPN today through Benzinga, and receive 3 months for free!

Frequently Asked Questions

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