FxBrokerReviews.org – One of the most time-consuming aspects of buying and selling NFTs is finding the right one from the NFT marketplace. Selecting the perfect NFT for your collection can be quite intimidating, especially if you are a beginner. The NFT marketplace is submerged with various NFT collections, but it is hard to guess which ones are profitable.
NFTs not only offer art in terms of painting and photographs. Tokens can be audio files, trading cards, virtual merchandise, gaming characters, and a lot more. While it is a great platform to trade unique assets you can get confused and fall into an NFT fraud or scam. Therefore, you need to be careful before you decide to invest in any digital asset.
Needless, there are plenty of good reasons to buy NFTs, and If you’re ready to find the NFT that’s right for you, this guide will help you know how to buy an NFT and which one’s are profitable for you!
How to know which NFT to buy: top things to check
1. Verify the seller
Like Instagram, the verified sellers on popular marketplaces such as OpenSea and Binance have a blue verification tick next to their account name. This is to prove that they are not fake accounts and can be trusted by the buyer. So, if you’re looking for a seller to buy an NFT token make sure the account has the blue verification tick.
However, sometimes the verification tick does not prove to be quite legitimate and is used to lure the buyer. For this, you can read the reviews or ratings by other buyers to cross-check or check the seller’s social media account.
It is also possible that many official NFT sellers do not have a verification tick. So it is always advised to check and research well about the NFT properties as well as the seller before you invest.
2. The transaction fee of the marketplace
When you sell an NFT, you have to pay a transaction fee to your marketplace. The fees depend on the platform and the type of NFT you want to trade. For example, OpenSea charges a 2.5% transaction fee for allowing the sale of an NFT token. Buyers don’t need to pay any transaction fee in most of the marketplaces.
But some platforms like Rarible charges the buyer a 2.5% fee of the NFT price per transaction. So, before you decide to invest make sure you’re aware of any existing fees on the marketplace.
3. Properties of the NFT
NFTs are unique possessions and can not be manipulated, hence before you buy one make sure you check the properties of the digital asset you wish to acquire. If you want to determine whether an NFT is worth buying, check the rarity of the properties it has.
Look for an NFT token that has the lowest percentage of commonness among the collection. You can check the properties and the percentages in the Properties section on the NFTs page. It also helps to confirm the legitimacy of the asset as it is almost impossible to replicate the properties.
4, Short-term vs. long-term investment
If you’re looking for a short-term investment in the marketplace, you should look for the NFTs that are trending in the marketplace and you should be very active to find the right ones. But if you are looking for a long-term investment then you should look for NFTs that have a large community. For this, you check the rankings of the NFTs in your chosen marketplace.
5. Invest in what you like
After considering all the safety measures you should Invest in what you like! When you are deciding on what NFT to buy, list all the categories you like and then choose the one that fits best with your requirements. Along with that, you should also keep an eye on the next best NFTs that might shoot up in the marketplace. This is an easy way to know which NFT to buy for yourself.
For example, if you’re a sports fan, you can look into sports NFTs specifically, and if you like a music artist you can buy their exclusive versions or merchandise available on the NFT marketplace.
How to buy an NFT?
In the NFT marketplace, the tokes are developed by blockchain technology and are recorded on a public ledger. When a digital asset is minted you get ownership of a digital certificate that allows a trader to sell or buy digital art.
Buying an NFT token on the marketplace is quite similar to buying an asset from a physical marketplace. However, unlike common marketplaces, the purchase is not paid with dollars or euros but with crypto coins. When you find an NFT token on the marketplace like Opensea or Binance you need to add funds to your crypto wallet to store and buy the NFTs. Since NFTs are traded using cryptos having a crypto wallet is essential.
Take a look at a step-by-step guide on how to buy an NFT.
Step 1: Top Up Your Wallet With Crypto
In the first step, you’ll need to create an account to top up your wallet with crypto that is accepted by the marketplace you want to trade in. You can easily buy crypto or top up your wallet on the same platform.
Step 2: Access Binance NFT Marketplace on the App or Browser.
Once your crypto wallet has sufficient funds to trade an NFT, you are required to go to your chosen NFT marketplace either through the App or web browser and log in with your details.
Step 3: Find The Right NFT
To find the right kind of NFT you can use the filter functions on the secondary market or the Mystery Box Market and search for NFTs according to different categories/ collections. Or you can even select from the handpicked recommended collections of the marketplace.
Step 4: Buy The NFT token
The marketplace allows you to buy an NFT in three different ways. It depends on how the creator/ seller has set the format of the sale. You can participate in an Auction and bid for the NFT you want to buy, make an offer to the seller or simply buy at the fixed price.
How to buy a profitable NFT?
Below are some methods that are commonly used to help you buy a profitable NFT. read below to know more.
1. Find a Budget
First of all, to make sure to invest in profitable NFTs, it is important to set a budget for your trading. Investing in NFTs can be expensive. Therefore, it’s important to know your risk appetite. Do not blindly invest in any token just because it looks appealing and has given investors high returns. If you are a beginner it is advisable to go for smaller projects as there you’re more likely to get better returns, compared to the mainstream or popular projects.
2. Find A Suitable marketplace
After setting a budget, look around for a marketplace that can give you an idea of potential NFT projects. There are lots of platforms that serve various categories of tokens, including art, music, sports, and a lot more. OpenSea and Binance are just a few more examples to consider.
3. Join an NFT Community
Joining an NFT community is another way to get insight into profitable NFTs and upcoming projects. The following creators can provide you with information about all the latest launches and updates about the tokens. Some of the communities have a paywall, which is reflective of the value they can provide to their members.
In the NFT marketplace, community members help you by providing information about the market and offering practical guidelines regarding useful investment strategies. Also, the buying and selling activity of the tokens greatly depends on the number of active members an NFT community has
4. Seller Credibility
The NFT marketplace is newly found, so there are chances of scams with people who are completely inexperienced with trading. Therefore, To be on the safe side only pick projects that are credible and verified and have a successful record of trading NFTs in the past. The more experience the team has, the more likely the project will succeed.
5. Gas Fees
To create, buy, sell and transfer NFTs, you have to deal with the gas fees. Gas fees are the transaction fees that keep fluctuating and have to be paid for trading NFTs. Blockchains like Ethereum have the most expensive gas fees in the marketplace. So, before venturing into a project, try to evaluate the gas fee and whether or not it will fit your budget. For this you can take the help of certain tools like Rarible Analytics and NFT Gas Station, to trace such expenses.
When is the best time to buy an NFT?
With people earning thousands of dollars from the NFT marketplace, it is quite understandable that you also want to start investing in NFTs as soon as possible. But, if you are a beginner do not jump into the market without research and knowledge. While there is no set best time to buy NFTs you should always be aware of the trending NFTs and updates in the marketplace.
Look at some of the advantages of investing in the NFT marketplace listed by forex broker reviews
- Easy to invest: Anyone can invest in NFTs and it is accessible to all. Trading in NFTs involves digital ownership of assets which makes it more easily and efficiently be transferred among people anywhere in the world.
- NFT is highly secure: Since NFTs are based on blockchain technology they are highly secure and can not be manipulated easily. Blockchain technology digitally signifies your ownership of unique assets and makes your asset more secure. Moreover, Blockchain technology can also make ownership of assets more transparent.
- Knowledge: It provides an opportunity to learn more about blockchain technology. Investors can become more knowledgeable about blockchain, while diversifying their portfolios, by allocating a small sum to tokenized assets.
Also read: A Beginner’s Guide To NFTs: How To Generate And Sell NFTs?
Is it smart to buy an NFT?
Similar to any trading, NFT trading has its pros as well as cons. The marketplace has today taken the internet by storm from famous artists to celebrities everyone is investing in NFTs. and probably you might also be wondering if it is smart to buy an NFT. while we have already mentioned some of the advantages of NFT let us take a look at some of the cons of NFTs, to help you make a decision.
1. NFTs can be volatile
NFTs are new in the trading market so these digital assets are not very liquid. Besides currently, there are not many potential buyers and sellers in the marketplace. As a result, trading NFTs can be incredibly challenging, especially during bad times. It also means that NFT prices might vary greatly.
2. There may be scams in the marketplace
Even though digital assets are backed up by blockchain, there may be chances of fraud in the marketplace. There have been many several artists that have recently reported finding their work for sale as NFTs on online marketplaces without their permission.
3. NFTs generate no revenue
Unlike stocks and bonds, where owners receive dividends or interest. NFTs do not come with any such revenue. The returns on NFT investments, like those on antiques and other collectibles, are based on price appreciation, which you can not count on.
4. NFTs Can Be Harmful to the Environment
Building a blockchain requires a significant amount of computer energy. Which can be harmful to the environment in the long run. It also increases carbon emissions emitted due to mining cryptocurrencies. NFTs are going to exceed in the coming years which can pose a serious threat to the environment.
5. You need to own Ether (ETH)
Most of the NFT marketplaces run on the Ethereum blockchain. This means that you need to own Ether to be able to buy NFTs on that platform. Now, ETH is one of the most expensive crypto and therefore many investors may have limited options.
Also read: Best NFT Marketplace List 2022: Detailed Review
The demand for NFTs is constantly expanding. However, even though they are quite appealing and have a lot of potential, you should tread cautiously when investing in new, markets since they are unstable and not verified
NFTs have both benefits and drawbacks, but we would advise not to invest in just about any asset even though it has been tokenized. Do your research, read reviews and only then plan to invest.