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Looking to Buy NFTs? Do These 3 Things First
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Back in the 80’s collectors scrambled for baseball cards like they were the new gold. What one would do for a mint condition Babe Ruth, you could only imagine.
The 21st century brought a new take on what’s valuable and what’s not. Over the years, technology has transformed humankind into visual animals.
No longer is the appeal of vintage plastic - or anything physical, for that matter.
NFTs, or non-fungible tokens, have changed the way we look at things. Better yet, they’ve made us only want to look at things.
The hype was inexplicable at first, but as the concept developed and collections sold for millions, it started to make sense.
It wasn’t about owning a unique copy of something. In fact, NFTs have little to do with ownership. It’s the right to decide what to do with something that holds value.
You can sell your NFTs, trade them, gift them or flaunt them on social media - it’s all entirely up to you. The power of deciding what happens to a property without ever touching it is the new Babe Ruth of modern collectibles.
If you’re reading this, chances are, you’ve thought about buying an NFT. You might want to see what the fuss is all about, or maybe you’re just given to the art. Whatever the reason, what you need first is preparation.
Here are a couple of things to consider before rolling up in your digital shopping cart.
What Do I Plan to Do with My NFT?
Buying an NFT is like adopting a parrot - it has to speak to you.
Even if not, in one way or another, it needs to serve a purpose. Everyone has a reason for buying something, including the most mundane of them all.
There are two types of buyers when it comes to NFTs - those who seek art and those who seek value.
The first groups may include celebrities, pro athletes, or just rich people who are running out of ways to spend their money.
The second group consists of people like us. Ones who want the opportunity to later hand down our digital treasure for a decent gain.
Buyers who seek value keep a keen eye on the current trends, the market and everything in between. Before investing in an NFT, you should be able to predict how popular it will get. This relies on factors such as the brand the NFT is built upon - is it a household name or an aspiring startup?
Most importantly, pay attention to how people react to certain products your NFT may relate to.
For example, if you like shoes you might want to look into Nike’s recent NFT venture. The RTFKT Studio is helping them make virtual shoes to wear in the metaverse and the designs are futuristically grand.
Nike is an established brand, but it also had a lot of political drama in the past. Depending on your stance and how people perceive that stance, the NFT you buy can become a label of your belief.
The market plays a big role in your NFT buying decision, too, or at least, it should.
Most NFTs are built on a blockchain and every blockchain runs on a cryptocurrency. The value of an NFT is tied to the performance of whatever crypto on its blockchain.
The most common network for NFTs right now is Ethereum and ETH is doing pretty well. So, buying digital art on Ethereum is reliable in terms of return on investment.
What you also need to consider is that Ethereum is a huge network. There are thousands of cryptocurrencies and tokens and more are getting produced every day.
So, while the NFT you buy might be super exclusive on one specific platform or game, it’s still likely insignificant compared to everything that’s going on in Ethereum as a whole.
Who Am I Buying the NFT From?
In general, you can buy NFTs from anyone with a crypto wallet, be it from an individual or a company. The question here refers to the specific kind of NFTs since it can determine their long-term value.
There are two main types of NFTs you can buy: branding collection and gaming collection.
Branding collection NFTs are pieces of art that are valuable in the eyes of the beholders. Think Crypto Punks, Royal Cubs and pretty much anything Beeple makes. There’s also been a recent craze on the new Bored Apes collection, one of which was bought by rapper Eminem for nearly half a million dollars.
Here’s one of the top-ranking Royal Cubs who’s sitting at a reasonable price of 1.5 ETH.
Gaming collection NFTs are in-app items and actually serve a purpose. Most metaverse games allow players to earn and trade rare items as NFTs.
Decentralization makes it so that players are the actual owners of their NFTs and not the gaming company. These NFTs can grow in value over time as the game progresses but only within their own blockchain.
Use Tools to Find NFTs
Once you’ve determined what type of NFTs you want to buy and what you plan to do with them, it's time for some window shopping.
There’s a variety of tools that help you search for the rarest and most authentic NFTs available on the market. When we say authentic we mean ones from either established artists, companies, or those which have been sold at significant amounts.
Some of the popular tools you may want to check out:
- Rarity Tool - most used for its rarity tracking feature, this site can help you find the rarest of them all.
- Dune Analytics - this one gives you the metrics and performance of NFTs. If data often helps your decision, this tool is your friend.
- Icy Tool - provides real-time price tracking for your NFTs. This is great if you’re a deal hunter. It does have a smaller collection than the two above.
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