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NFTs for Dummies - The Quick Cheatsheet You Need
An NFT supporter can do a lot of things with NFTs, or non-fungible tokens, including raising money for humanitarian causes. These digital assets can be created, bought, and sold, but you can’t do any of that if you don’t know the space. NFTs aren’t that complicated, though they may seem very foreign. We have put together a quick guide to help you get into NFT trading.
NFTs Explained
Let’s answer the big questions first: what are NFTs, and what is NFT trading? NFT stands for non-fungible token, which means the asset is 100% unique, and completely yours, with proof of ownership. NFTs can be anything from entire music albums, art, videos, and even virtual land.
If you buy an NFT legitimately, there will be a permanent record of the transaction on the blockchain it’s built on. Even if someone else screenshots or copies it, there is incontestable proof that you own it.
NFT trading is the act of buying an NFT at a certain price, and selling it off in the future in the hopes of making a profit. It’s like trading stocks, and like stocks, sometimes the price of your NFT will fall and you’ll take a loss.
How to Start NFT Trading
There are a few things you can do with NFTs. You can do direct trading, investing, renting (in some cases), and of course, creating your own.
The easiest and most straightforward way to start with NFT transactions is to do direct trading, where you would buy an NFT and sell it at a later date on the secondary market. You can invest, where you purchase an NFT for its benefits and remain a part of the community. Of course, you can potentially make a profit by creating your own collection and selling them.
We also mentioned renting NFTs, which can happen in a metaverse. A metaverse is a virtual world, and Decentraland is one of the most popular and largest ones. NFTs come in various forms in Decentraland, and the actual digital land is one of them. You can purchase a piece of virtual real estate, build on it, and even rent out your land or what you build on it (much like in real life).
What You’ll Need to Start Trading NFTs
In order to start trading NFTs, you will need the following:
• A Crypto Wallet
A crypto or digital wallet is where you store the NFTs and the cryptocurrency securely. Make sure the one you pick is supported and compatible with your chosen blockchain and cryptocurrency. Ethereum is currently the largest blockchain for NFTs, but there are growing chains such as Solana, Cardano, and Algorand that offer faster transaction speeds and cheaper gas prices.
• Cryptocurrency
You need to fund your crypto wallet with the native cryptocurrency of the blockchain. In Ethereum’s case, it’s ETH. Meanwhile, it’s SOL for Solana, ADA for Cardano and ALGO for Algorand.
• A Chosen NFT Marketplace
The next step is to choose a platform to buy, sell, trade, create and find NFTs. The marketplace you pick is in direct correspondence with the blockchain technology you select. The marketplace must also support the wallet you choose. Everything is intertwined, so make sure you check the compatibility.
How to Get Into NFT Trading Safely
There are risks with something that has the potential to earn plenty of profit in a space that is still largely unregulated. We have a few tips to keep you and your assets safe when you trade NFTs.
Always keep in mind that any investment has the potential to fail. Yes, there are those who have become millionaires overnight with the “right” investment, but there are plenty of novices and even experts who have lost money.
Sometimes, even the moment you choose to sell your asset plays a big role as crypto and NFTs are very volatile. Getting in on the ground floor right at the drop can sometimes be the key to purchasing at a low price. You can check out NFT Drops for the latest details.
If trading sounds a little scary, you can always stake in NFT pools, where they lock up your NFTs. In exchange, you would get certain benefits.
FAQ
• What is NFT in simple terms?
An NFT is a digital asset that can be digital or represent real-world items. NFTs can be anything from physical items to digital art and even virtual land. In order to buy NFTs, you would need cryptocurrency, a digital wallet, and an NFT marketplace.
• How do I start trading in NFT?
You can start trading NFTs as soon as you have all the tools ready. You would need to fund your digital wallet with the native cryptocurrency of the blockchain the NFT is built on, make sure everything is supported by the marketplace you select, and then create and connect all your accounts.
Conclusion
We firmly believe that NFTs are here to stay. They are more than just art to appreciate because some can carry real-world utility and be used to support charitable causes. However, with any type of investing and trading, we would caution our readers to remember that some losses are to be expected.
