NFTs have been sweeping the financial landscape recently due to the enormous value that they hold. With artist Beeple’s digital work Everydays: the First 5000 Days selling for an eye watering $69.3 million at auction last month which has piqued the interest of many people around the globe who are thinking about investing into NFTs.
This collection of 5000 artworks has now been seen all around the world and Metakoven, the man who won the auction, predicts that Everydays could one day be valued at $1 billion which would make it the most expensive piece of art in history.
But how does a digitally based piece of art garner such value? Standing for Non-Fungible Tokens, NFTs are different from other forms of cryptocurrency as they relate to a form of media and the value associated with that rather than the usual cryptocurrency model that Bitcoin and Dogecoin follow.
The value of the NFT is dependent on how much the buyer is willing to pay. The opening bid for Everydays was $100 and this managed to rise up to millions of dollars due to the high demand.
NFTs haven’t just found a key place in the art world but the cryptocurrency world as well with signs of increased growth and interest.
A huge advantage that NFTs have over other forms of cryptocurrencies is that anyone can invest regardless of income. Whether you are wanting to form a collection of NFTs or are seeking to make investments to resell in the future, there are options available at all price points for all interests.
Because NFTs can take the form of photographs, artwork, videos, memes and even Tweets among many other options, there is something for everyone whatever they are interested in.
So how can you buy NFTs? If you are familiar with cryptocurrencies then you probably have an idea of how it works but for those who have never invested in any kind of cryptocurrency before, you have come to the right place.
Before you even purchase any NFTs, you need to have a crypto wallet. These wallets can be found on online exchange sites and apps which can then store your cryptocurrencies securely and safely.
Whether you are wanting to invest in NFTs only or are thinking about investing in other forms of cryptocurrencies such as Bitcoin, you will need a crypto wallet to do so. In the same way that you have a physical wallet to store your physical money and credit cards, crypto wallets have the same function but with cryptocurrencies.
Traditional forms of cryptocurrencies are easy to store but with NFTs it is a bit different meaning that these exchanges are having to source teams to design new software to support them.
Can I buy NFTs on Binance?
Binance is the largest online exchange where users can buy and trade cryptocurrencies. It provides a crypto wallet for traders which is needed to store their funds.
Binance is a great place to start for those who have never ventured into cryptocurrency before since it includes features that can advise its users on investments so they can make the right decisions as well as allowing the use of a wide variety of cryptocurrencies and keeping them all in one place for convenience.
With the majority of cryptocurrencies available to trade, exchange, buy and sell, Binance is also the most popular online exchange with an incredible 100 million users which helps to contribute to its $500 million daily trading volume.
Last month, Binance announced its plans to open an NFT marketplace in June in which people can buy and sell NFTs through two different schemes. They are releasing a premium venue for artists and exhibitions in which 10% of all final sales will go to Binance and 90% will go to the artist regardless of final bid.
The second marketplace is a standard trading market where Binance will charge a 1% processing fee and creators will receive 1% royalty. Artists can contact Binance about potential partnerships via the landing page that they have launched in anticipation of the marketplace’s opening in June.
It’s probably no surprise that as the world’s leading online exchange, Binance has reacted so rapidly to the rising demand for NFTs. Their low commission fees also rival that of many independent marketplaces such as Rarible which takes a 15% commission rate from each sale.
With the popularity of NFT seeing a huge spike in recent months, its inclusion on Binance is going to make it even more accessible to those who want to purchase and sell NFTs. Because Binance is the largest exchange, including NFTs, they will ensure that you can keep all of your cryptocurrency purchases in one place.
Another huge advantage of introducing NFTs on Binance is that users can see at a glance what the market is like on a daily basis alongside the prices of the NFTs and how much they can earn on a regular basis with up to date figures.
Bear in mind that Binance is not available in the United States and it blocks U.S residents from selling or buying due to ongoing investigations. However, outside of the United States, Binance is the best option as it lays out all of the most up to date stock listings in a way that is clear whilst also providing the resources you need to make fully informed decisions you can feel confident with.
Can I buy NFTs on Coinbase?
For those who live in the United States and want to invest in cryptocurrencies, Coinbase is the best place to start. It is the largest online exchange in America and when the company went public in April this year, the total value of the company was worth a staggering $47 billion with each share costing $328.28 on its first day of closing.
Not only is this proof that NFTs are rising in demand but also highlights how the cryptocurrency industry is one that the financial sector is seriously investing in and seeing positive results.
Like Binance, Coinbase is a secure platform where users can buy, sell, transfer and store cryptocurrencies safely and easily. It doesn’t hold as many cryptocurrencies as Binance but in the United States market, it is one of the best online exchanges you could choose to trade in.
While they don’t offer NFTs as of yet, there are plans to consider doing so in the future. For the time being, you can have a non-custodial wallet which will allow you to buy and sell NFTs and store them there while also using Coinbase.
They do sell major cryptocurrencies such as Bitcoin and Ether, the latter is important if you are wanting to purchase NFTs meaning you can purchase the currency needed if you don’t want to use any credit cards.
With the demand and supply for NFTs on the rise, it is highly likely that Coinbase will develop an infrastructure that will support NFTs as this will create a more seamless and enjoyable experience for the customer. If they don’t, they may see their users switching to alternative services that have stayed ahead of the curve and don’t have the inconvenience of using more than one crypto wallet.
With Coinbase going public last month, this could be a sign of growth, not only in terms of the profit margins but also in terms of the future plans that lie ahead for the company. They can now focus on trading more cryptocurrencies and expand the amount of services that they offer.
Now that the total value of the business has skyrocketed, the team at Coinbase are able to create an American alternative to Binance that offers similar services, including NFTs.
Coinbase is a great place for beginners to start as it has an easy process and allows you to exchange one cryptocurrency into another should you wish. Whether you are investing $10 or hundreds of thousands of dollars, Coinbase is incredibly secure and is trusted by 56 million people and has a trading volume of $335 billion showing that it is a major player in the cryptocurrency sector.
Can I buy NFTs with a credit card?
Those who have never ventured into the world of cryptocurrencies may be a bit intimidated by the idea of using more than one currency but are interested in investing in NFTs. Credit cards can be a great way of ensuring that all of your transactions are made from one account and you can keep track of your expenses from your domestic currency.
It is important to bear in mind that credit cards can have larger transaction fees than using cryptocurrency but this is dependent on your current credit card provider as well as what the site you are purchasing from charges in terms of transaction fees and any additional taxes..
Whether you can purchase NFTs using your credit card isn’t completely consistent throughout the internet. The form of payment usually differs depending on the seller or the site.
Some places will allow both cryptocurrencies and credit card usage, however, major marketplaces such as OpenSea only allow the use of cryptocurrencies as this is the only currency that they trade in. This is mainly because allowing cryptocurrencies only demands lower fees overall whereas there can be added taxes from using credit cards.
As NFTs is a cryptocurrency based industry, it’s more common to see cryptocurrency as the only acceptable form of payment. For example, Metakoven paid for the artwork Everydays with 42,329.453 ETH (Ether) which is equivalent to $69.3 million.
Not only does it make it the most expensive NFT sold to date, but it is also the first time that auction house Christie’s has accepted cryptocurrency as a form of payment.
The hugely popular site NBA Top Shot allows its users to pay for NFTs with credit cards which is great for those who want to start buying into NFTs but are a bit intimidated by how cryptocurrencies work. NBA Top Shot works by selling “Moments” which are video clips that feature the best basketball moments.
By incorporating credit card payments alongside cryptocurrency payments, it makes the user experience simpler and seamless by allowing buyers to have the choice. The most expensive payment made on the website was by Jesse Schwarz who paid $208,000 for a Moment where LeBron James leaps over Sacramento Kings’ player Nemanja Bjelica to slam a ball through the hoop.
Some sellers only allow for cryptocurrency payments so it’s always important to double check. If you do have to pay with cryptocurrency then the chances are you will need to pay using Ethereum which can be bought on all major online exchanges.
The best way to think about cryptocurrency in this instance is like a foreign currency that can only be used online.
Can you buy NFTs with Bitcoin?
The most well known cryptocurrency in the world is Bitcoin. The first modern cryptocurrency was made in 2009 by its developer who goes by the pseudonym, Satoshi Nakamoto.
As of 2021, one Bitcoin is equal to around $46,000 making it the most valuable cryptocurrency in the world. Bitcoin can be stored in a crypto wallet and is compatible with all of the major online exchanges which can be accessed via a smartphone app or on a computer.
Bitcoins can be traded as whole coins or parts of coins due to their value and every trade is stored in a blockchain which is a public list of all transactions to avoid any double charges or fraud.
NFTs are part of the Ethereum blockchain which means that it requires Ethereum to purchase them. This cryptocurrency is currently valued at $4,046.12 per 1 Ether making it substantially less valuable than Bitcoin.
However, this also makes NFTs more accessible to those who don’t have higher incomes and want to invest in cryptocurrency. Ethereum can be purchased on eToro, Gemini or Coinbase, making it just as accessible as Bitcoin.
However, Bitcoin’s blockchain and the Ethereum blockchain have completely different makeups meaning that they have different features and are not always interchangeable.
At the moment, it doesn’t appear possible to purchase NFTs with Bitcoin as it uses a completely different blockchain which wouldn’t be able to support the purchase. Due to the nature of NFTs and the extra information they contain, the Ethereum blockchain is substantially different from that of Bitcoin and Dogecoin, for example, as it can support these files.
However, other blockchains are starting to develop their own versions of NFTs that can be purchased using their own cryptocurrencies for those who want to stay loyal to one form of cryptocurrency. Whether other companies are developing their blockchains to support NFTs or wanting to create their own unique software is unknown but either way, it is further proof of an industry that is going to stay.
However, there is a possible way to purchase NFTs indirectly using Bitcoin by exchanging your Bitcoin for Ether and then purchasing the NFT that way. As Bitcoin is valued much higher than Ether, you may not have to trade your entire stock depending on the price of the NFT in question.
Like Bitcoin, Ethereum can be bought or sold in smaller quantities and not just as whole coins making it easy and simple to do. For those who want to minimize the amount of cryptocurrencies in their crypto wallet, they may have to wait until Bitcoin’s blockchain can support the buying and selling of NFTs or have developed their own solution entirely.
Either way, it is not impossible to use your Bitcoins to buy or sell NFTs, it just cannot be done as easily at the moment due to the differing blockchains.
Are NFTs a good investment?
The most important part of buying NFTs is its investment value if you plan to resell in the future for a profit. It's important to think about the rarity of the NFT as well as the format, how it is sold as well as how long you plan to keep it before selling it.
Just as with physical goods, there is a lot to consider when looking to buy NFT. Unfortunately, it is not as easy as making a purchase and then immediately selling it for millions of dollars but if you do your research thoroughly and know what you are looking for then you should be able to make a nice sum of money in profits.
The first thing to consider is that NFTs are a new investment and there is a lot that needs to be learned. The first bunch of NFTs were released on the market in 2017 but it is within the past few months that the huge spike in demand has appeared when Beeple’s artwork Everydays was sold at auction for $69.3 million.
Understandably, people began to notice NFTs and the potential for this growing market but it’s important to note that the average NFT does not sell for nearly that amount so try not to get your hopes up too much.
The best way to think about it is that there have been collectibles in various forms around for centuries and the rarity of the collectibles adds to the value of the product. A modern example of a failed attempt would be the TY Beanie Baby craze that swept the late 90s/early 2000s where people believed that they would be worth hundreds of dollars in the years to come.
However, due to the mass production of the bears and the lack of interest in the market, they hardly bring any profit at all with the limited edition “Princess Diana” memorial Beanie Baby failing to gain the traction that they were hoping for.
On the other hand, Pokemon cards were released around the same time and were a pioneer in the modern trading card games that swept the world in the 1990s. The desire for nostalgia has seen Pokemon cards make a comeback in recent years and select rare cards from the 1st base pack have been selling for as much as $75,000 each in mint condition.
The most expensive Pokemon card sold was the coveted Pikachu Illustrator card which was purchased for $175,000 in 2019. This shouldn’t be surprising as Pokemon cards were loved by millennials in the 1990s when they were children and now, as adults, they are dominating the market through their love for nostalgia.
It is this same logic that runs the NFT industry. The files are only worth as much as the buyer is willing to pay for them.
The majority of the NFT demographic are millennials and this trend for collectibility seems to be a new and exciting way of trade and it seems that the Ethereum blockchain that supports NFT has perfected a way to make it both profitable with demand increasing.
So when you are researching various NFTs and deciding on what is going to be the best investment to make a profit, always consider the risks that can go alongside the purchase. There is definitely the potential to gain something that may be worth as much as a rare Pokemon card one day but there is the possibility of also investing in something that won’t give you as much money.
Are NFTs for real?
Following on from whether they are a good investment, are they even for real? This is another complicated question due to the complex nature of NFTs.
The idea of NFTs can be difficult to wrap your head around but once you realise the similarities between them and physical goods, it’s easy to understand the value and potential of them as investments.
As stated earlier, NFT stands for Non-Fungible Token which means they are a completely unique token that cannot be duplicated and all information of any transaction involving the NFT is logged on the Ethereum blockchain to prevent any possibility of fraud.
Unlike regular cryptocurrencies such as Bitcoin or Ethereum, NFTs are reminiscent of the physical product that you would buy in a shop rather than the money itself. Bitcoin and Ethereum are examples of cryptocurrency which are fungible because they can be exchanged for other cryptocurrencies or cash. NFTs don’t have that same value and are only worth as much as the buyer is willing to pay for them.
If you go into a shop and purchase an item of clothing off the rack, you then own that piece of clothing but you don’t own the design or the copyright to the design. You own a copy of the design.
On the other hand, if you go directly to a designer atelier and have a dress made for you from scratch then the value of that item goes up because it has been made to fit you specifically and has been designed with you in mind. NFTs work in a similar fashion as they consist of a file that contains a form of media such as an image, an audio clip or a video clip to name a few examples.
The rarer the NFT, the higher the value. If you purchase a copy of a digital artwork NFT then it probably hasn’t cost you too much because the artist has put lots of copies available on the market.
However, if you own the original digital artwork file NFT signed by the artist then that is going to be worth a whole lot more because of the scarcity, desirability and collectibility of the NFT.
Even though NFTs are a virtual purpose that can only be viewed on a smartphone or computer, this doesn’t make them any less real. To purchase an NFT, you need cryptocurrency and purchasing cryptocurrency requires real money. This is a real purchase just as if you were purchasing an item of clothing. How much you wish to spend is up to you as you determine the worth of the NFT and whether it is the right investment for you.
Conclusion
If you’ve been wanting to invest in cryptocurrencies, now is the time to do so. With online exchanges opening the doors to support NFTs in their crypto wallets, you can easily set up your account and start investing.
Whether you are wanting to do it to collect NFTs related to your passions or for entertainment purposes or maybe you’re solely wanting to invest and are planning to resell your NFTs later down the road, this is the perfect time to do so. You can check marketplaces such as OpenSea which sells over 4 million NFTs and is the largest marketplace for buying and selling tokens at all price points.
If you’re unsure where to start with your research then have a look on there and see what is on offer and if any NFTs stand out to you.
