If you’re familiar with the world of cryptocurrency, chances are you’ve heard of NFTs and the big splash they’ve made in the art world. NFTs are quickly gaining popularity as the latest investment trend in the blockchain.
Here’s a quick look at NFTs and how you can get involved in the NFT market.
What is an NFT?
NFTs are immutable records of ownership secured on a blockchain network. NFTs can represent real-world and digital assets, but they are not the asset themselves. NFTs may hold a version of the asset, such as artwork, within its encryption, but this is not necessary for all NFTs. In recent years, NFTs have been used by digital artists to create scarcity and build a digital art marketplace using NFTs.
Digital art NFTs are unique and cannot be replicated. They’re minted by artists, musicians, or anyone with access to the marketplace. NFTs can also be used as collectibles for people who want to own unique digital assets that have value in the real world. Some NFT collections have sold for millions of dollars online, and the NFT marketplace continues to be endorsed by celebrities like Justin Bieber and Steve Aoki.
The application of NFTs goes beyond the entertainment and collectible world. NFTs can be used for contracts, property ownership, data storage, and much more. Investing in the NFT marketplace could prove a lucrative undertaking, but keep in mind the possibilities of blockchain technology and look for an opportunity that best fits your financial goals.
Where to Buy NFTs?
Crypto exchanges are the most obvious place to start. If you already have a crypto portfolio, you can likely buy NFTs through your exchange of choice. Some popular exchanges, like Coinbase and Binance, have opened up their platforms to support NFTs in recent months.
In addition to these popular options, several alternative exchanges are worth checking out. Not only will they offer more competitive prices, but they may also provide more robust trading tools—like charts and graphs—to help you better understand how much an asset is worth at any given time.
You can purchase NFTs using most crypto, particularly ETH, as most NFTs are secured to the Ethereum blockchain. You can select an exchange like FTX that offers ETH USDT trades and access to NFTs through ETH and other cryptos.
FTX is a great option for accessing the NFT marketplace. Not only does FTX offer some of the lowest fees in the market, but they also make it easy and intuitive for collectors and artists to utilize their trading tools. Artists can easily mint their NFTs through the platform, and collectors can quickly search through and bid on or purchase NFTs directly from artists or other collectors.
Risks of investing in NFTs
While NFTs may seem like a good investment option, there are many risks that you should be aware of before deciding to invest.
- You can lose money. If an NFT’s value falls, it will affect your initial and subsequent investments in the same NFT. This is true even if you believe in the project and think it has great potential for growth in the future; if others do not agree with your assessment, then their perception could result in a decline in price over time.
- Fraud can happen anytime – even when dealing with reputable companies and individuals. Fraud can take many forms: fraudsters may try to sell fake items or projects by pretending to be someone else; they may trick investors into giving them money under false pretenses, or they could steal funds from legitimate investors through hacking accounts or other means of gaining access to private information stored online (such as passwords).
NFTs can be an excellent option for diversifying your digital investment portfolio, but you need to do your research before you start investing in random collections. You can check out the FTX knowledge base to learn more about how to make smart investment decisions in the NFT marketplace.