Should I Buy Non-Fungible Tokens (NFTs)?

Updated: September 28, 2022
by Jess Adeola

It’s no secret that blockchain technology is going to be a huge part of the future. And with that comes the potential for a whole new way of doing business. One such example is the use of non-fungible tokens (NFTs).

Non-fungible tokens (NFTs) are a new type of digital asset that has seen a surge in popularity in the past few years. NFTs are unique because they can represent anything, from virtual assets to collectables. In this article, we'll teach you how to buy NFTs and explore some of the benefits they offer.

Should I Buy Non-Fungible Tokens (NFTs)?

What is a Non-Fungible Token?

"Non-fungible" goods are those that cannot be exchanged or substituted for one another. For example, a book that's signed by the author with a message to you is unique and special to you.

Non-fungible tokens are digital assets that are not interchangeable and do not have a traditional fiat value. These tokens represent unique assets or properties and can be used to purchase goods and services on the blockchain. Non-fungible tokens can be used in a variety of applications, including gaming, music rights management, and asset trading. Non-fungible tokens are often associated with the Ethereum blockchain, but they can be used with other blockchains as well.

So to summarize, NFTs are digital tokens that are unique, and can only be used by specific individuals or groups. 

What is an ERC-721 Token?

ERC-721 tokens are digital assets that use the Ethereum blockchain. These tokens are designed to be non-fungible and unique, and they can be used to purchase goods and services on the blockchain. ERC-721 tokens can also be used in a variety of applications, including gaming, music rights management, and asset trading.

How to Buy Non-Fungible Tokens (NFTs)

There are different ways to buy NFTs, depending on the platform you use. Here are three examples: 

  • Use an exchange: Most exchanges offer a range of NFTs for sale, including major players like Binance, Coinbase, and Bitfinex. You can usually find detailed information about each exchange's NFT offerings on their websites.
  • Use a wallet: Many wallets allow you to buy NFTs directly from the app. Popular choices include Ethereum and NEO wallets, as well as Ledger and Trezor hardware wallets. Note that some wallets may not support all NFT types, so it's important to check before buying.
  • Create your own token: If you want to create your own NFT, you'll need to read up on blockchain technology and develop a secure Ethereum or NEO wallet.

Once you have your wallet set up, you can start creating your own NFTs by:

  1. Uploading a token asset file: This is the file that contains the information about your tokens, such as their name, symbol, and description.
  2. Generating a public and private key: This key will allow you to transfer your token to other people and wallets.
  3. Issuing a token transaction: This transaction will include the information about your asset, along with the public and private keys that you generated in step 2 above. 

Note that some NFTs, such as gaming assets, may require additional steps before you can use them. Consult the specific documentation for your asset to learn more.

NFTs are still in their early stages, so there are still some limitations to consider. For example, they may not be suitable for all applications, and they may not be compatible with all hardware wallets. However, overall, NFTs offer many benefits that make them an interesting option for digital assets.

Do I Need Ethereum to Buy NFTs?

Do I Need Ethereum to Buy NFTs

You will be required to pay in ETH (Ethereum) most of the time because most NFTs are Ethereum based. So if you already have a cryptocurrency exchange account, it may be an easy solution. I will show you where you can buy NFTs later in this article.

What Are The Benefits of Using Non-Fungible Tokens?

There are a number of benefits to buying NFTs, including:

1. Increased liquidity: 

Most exchanges offer a wide range of NFT assets for sale, so you're likely to find what you're looking for. This increased liquidity makes it easier to buy and sell NFTs, which can increase their value over time.

2. Increased security: 

Since NFTs are unique, they can't be easily copied or counterfeited. This increases their security, making them an ideal choice for high-value assets like cryptocurrencies.

3. Increased flexibility: 

Since NFTs are not tied to any traditional fiat currency, they can be used in a variety of applications. This increased flexibility can help them to reach a wider audience.

4. Increased accessibility: 

Since NFTs are not tied to any specific country or region, they can be used in a variety of markets. This increased accessibility can help them to reach a wider range of people. 

5. Reduced costs: 

NFTs can reduce the costs associated with transferring or storing money because they do not require a third party to operate.

6. Easier transactions: 

NFTs eliminate the need for multiple signatures, which makes transactions faster and easier.

7. Increased transparency: 

NFTs allow users to see the ownership and details of an item without having to contact the creator. This increases trust between users and businesses that use NFTs.

Where Can You Buy NFTs?

Where Can You Buy NFTs

There are a number of ways to buy non-fungible tokens: through exchanges, online marketplaces, or directly from the creators. Here is a rundown of some of the most popular platforms:

  • OpenSea: OpenSea is the largest marketplace for digital collectables that operate on Ethereum. In order to use the platform, you're required to have a web3 cryptocurrency wallet such as MetaMask. Connecting your Ethereum wallet address and username will allow you to interact with the OpenSea market and place bids.
  • Binance: Binance is one of the world’s leading cryptocurrency exchanges. It offers a wide range of features, including support for non-fungible tokens. You can buy and sell NFTs on Binance using its native BNB token.
  • MetaMask: MetaMask is an Ethereum wallet that can be accessed via a Chrome extension or an app. To sign up for OpenSea and other NFT platforms, you will need an Ethereum wallet.
  • KuCoin: KuCoin is another leading cryptocurrency exchange. It offers a wide range of features, including support for non-fungible tokens. You can buy and sell NFTs on KuCoin using its native KCS token.
  • OmniToken: OmniToken is a decentralized platform that allows you to create, trade, and use non-fungible tokens. You can buy and sell NFTs on OmniToken using its native OMG token.

Should I Buy Non-Fungible Tokens (NFTs)? Conclusion

A growing number of people are becoming interested in NFTs as a new type of digital asset. If you're interested in getting involved with this exciting new market, here are some tips on how to buy NFTs.

Whether you're looking to invest in a new project or just want to make sure you have the best chance of trading your NFTs for value, these steps will help ensure a successful purchase. Thanks for reading!

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About the author 

Jess Adeola

Jess is a working mother of two small children. Writer, graphic designer and a trainee accountant, who's looking to set up a design institution for children under 13 in the UK.

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