NFTs have gained massive popularity over the last couple of years.
Enough people are talking about it, and if you are part of those that have shown interest, you will be looking at ways to potentially start your own collection.
Here is what you have to know about doing it the right way.
Educate Yourself And Research
When you decide that you want to start collecting NFTs, the first thing you need to do is to educate yourself on everything that is involved with NFTs.
Understanding NFTs begins with understanding blockchains as well as certain cryptocurrencies that act as their primary means of transactions.
The blockchain provides the databanks in which NFTs are stored as well as certain cryptocurrencies that are mined and exchanged, which in certain cases, are the only means that you can purchase NFTs.
What Are NFTs?
NFTs are non-fungible tokens. Fungible means something that can be replicated or replaced, so an NFT or non-fungible token refers to assets that are uniquely created and cannot be easily duplicated. It takes certain pieces of art or digital assets and mints them.
This means that those art assets are given a signature when they are developed digitally.
In a similar fashion to how art is minted and verified, this is done digitally with the piece itself, allowing people to see its certification, increasing its value and worth.
This translates to what is known as NFTs in today’s current market, as pieces of work that hold value much in the way that art does.
The reason many people are putting money into NFTs is that it is just as much of an investment as it is an aesthetic piece of work.
However, being created and developed recently after a massive interest in cryptocurrencies, NFTs is another investment that many people believe will bring huge earning and financial potential.
Creating A Wallet
In order to purchase an NFT, you’ll need to create a wallet. You cannot just simply use a credit card or cash to buy NFTs.
You need to choose a platform that provides you with cryptocurrencies, ideally selecting a platform that provides the currencies you will need to purchase NFTs.
Once you’ve selected your platform, you will create a wallet much like you create an account for any platform.
However, the data here is much more important and it is crucial to keep passwords and security phrases safe in multiple secure locations to ensure that you do not lose access to your wallet which you would expect to hold a significant amount of cryptocurrency.
Once set up, you are free to purchase NFTs through your debit card and send the currency to your wallet.
This sounds like extra steps, but this translates to the security of both cryptocurrency and NFTs and directly contributes to the value of NFTs as investment opportunities.
Buying NFTs
When you want to buy an NFT, you typically need to link your wallet to the marketplace platform.
Some wallets also double as markets where you can directly purchase NFTs.
Every market provides different benefits, from the securities involved, as well as the NFTs offered.
Consider the different features and what you feel you must prioritize in your platform.
As exemplified on Jungle, consider community as a key feature for those that want to interact and connect with each other.
As a buyer, you might want to better interact with creators, and as an artist, having the opportunity to reach out and talk to enthusiasts that might be interested in your work is invaluable.
Benefits Of Specific NFTs
There’s a multitude of benefits when looking at NFTs that are unique to this medium in contrast to others.
As a collector of art, one of the biggest concerns you have is the legitimacy of the work itself. With physical pieces, duplication and falsification are common problems.
Having your pieces on a digital screen that can verify the authenticity of each piece provides great confidence to every trade and transaction.
These platforms reduce the opportunity for any kind of illegal reproduction, allowing you to see the transactional history of different NFTs to be able to trace it back to their original artists.
Additionally, the artists and creators of different NFTs and collections also benefit as well as the customers.
This is because, with every transaction, the artists continue to see revenue through a percentage payment of each purchase.
This helps support artists in ways that other traditional means of art transactions did not provide before.
Artists with physical pieces would only see the initial payment with the original purchaser, and then their work is allowed to be sold for however much profit by resellers, collectors, and other industry connoisseurs as they have purchased full ownership.
With NFTs, artists retain their ownership. This provides a great incentive for creators to begin to develop their works online and through this medium.
Purposes Of NFT Collecting
As mentioned, you can collect NFTs with the purpose of investing, putting your money into these digital assets in hopes that others will see the value and continue to purchase and extrapolate a financially viable market.
However, these are not just assets with intentions to solely invest in them for value.
Many NFTs provide different benefits and perks as well.
Certain collections provide access to exclusive benefits, depending on those that created the collection.
This can act as tickets or access to events, promos, and memberships to secret and exclusive clubs.
Other NFTs provide access to artist opportunities, collaborations, and a unique way to connect with your favorite creators.
This diverges from traditional art sales in a unique way that connects future buyers with artists, and those that care for their work.
Additional purposes are infinite in terms of technology and the evolution of the blockchain and the platforms NFTs are found in.
Consider how video games already have different skins and avatars. NFTs can take these concepts to the next level, holding value with unique designs and pieces of art.
It is important that you understand exactly how these NFTs work, and what you are getting with your money.
These can be quite financially sizable investments. You want to feel safe and secure about where you put your money.