NFT Trading has become one of the most trending activities in recent times, especially with the boom that happened to the NFT industry in 2021. NFTs have been disrupting intermediaries, especially with regards to things like selling art; artists no longer need to go through intermediaries since they can now sell their artworks directly through NFTs. This article describes the steps and technicalities involved in buying and selling NFTs.
What Is A Non-Fungible Token?
A Non-Fungible Token (NFT), is, in simple terms a token with a unique identifier and other characteristics that enable you to store data on it. A token’s non-fungibility is due to its unique identification. Text, photos, audio, and video files can all be included as additional information.
NFTs, unlike fungible cryptocurrencies, are one-of-a-kind and cannot be exchanged. Because each bitcoin or Ravencoin is uniform and indistinguishable from the others, you can trade them freely on cryptocurrency exchanges.
However, because no two NFTs are alike, trading an NFT is difficult. Even though they may appear similar on the surface, each NFT has its unique identification and feature, making each piece unique. Furthermore, unlike traditional cryptocurrencies, NFTs cannot be broken into smaller bits. Bitcoin, for instance, may be divided into eight decimal places. As a result, NFTs are typically illiquid and difficult to sell because they must be purchased in full.
Fungible assets have the advantage of being uniform and interchangeable, making trading more convenient. Shares are traded on stock exchanges such as the New York Stock Exchange, NASDAQ, and London Stock Exchange, for example. Fungible coins can also be traded on crypto exchanges like Coinbase, Binance, and Uniswap because they are interchangeable.
Non-fungible assets, especially those that are one-of-a-kind and rare, are not appropriate for trading on such platforms. The value of each commodity is determined by a variety of factors and can vary dramatically. Non-fungible products are posted and sold on marketplaces like eBay and Etsy or consigned and auctioned off by auction houses such as Christie’s and Sotheby’s in the real world.
A marketplace is also required for NFTs to support the minting, selling, and secondary trading of NFTs between potential buyers and sellers. There are several NFT marketplaces to choose from, each specializing in distinct types of NFT buyers and sellers.
If you will buy and sell NFTs, interaction with an NFT marketplace is a necessity, examples of marketplaces include OpenSea, SuperRare, and Nifty Gateway. The marketplace is where the NFT is listed before it gets minted.
Requirements To Trade NFTs
Before you can begin to trade NFTs, you must set some things in place to ensure that you must be able to buy and sell smoothly without any complications. They are:
- Create an account on an online marketplace, this enables you to be able to buy NFTs.
- Have a cryptocurrency wallet and buy some relevant cryptocurrencies so that you will be able to conduct transactions. Note that the name of the cryptocurrency must match the name of the wallet you will be using.
Once these are in place, you will be able to buy and sell NFTs.
Before you can purchase your first NFT, you have to connect your wallet to your account on the marketplace of your choice. After linking your wallet to the marketplace, you will now be able to go through the different NFTs that are available on the marketplace and select one that you would like to buy. After selecting which NFT you want to buy, you will return to your wallet and be asked to confirm or reject the transaction. After you confirm the transaction, you will be able to view it on your profile. It is that easy.
There are two primary ways of selling NFTs; selling a freshly minted NFT or selling one that an NFT collector has bought and now has a willingness to trade. The NFT minting procedure is likely to finish in one of two ways. Minting is a simple technique by which content such as works of art, collectibles, melodies, memes, and other items become accessible on the blockchain, tamper-proof and safe, and the content transforms into an NFT and is “tokenized.” From then on, these digital assets have been able to be sold and exchanged as NFTs, as well as being digitally traced when re-sold.
To begin minting, content creators will just require a Mac or PC, a crypto wallet that accepts NFTs, and a profile on a blockchain NFT marketplace.
Read our book review on buying and selling NFTs
Despite the instability and immature nature of the crypto market as a whole, as well as the high amount of uncertainty surrounding nonfungible token prices, the NFTs revolution continues to spread. Buying NFTs is still seen as a fantastic way to help artists, singers, designers, and other creative people who collectors are fascinated in such digital assets, even if creators and collectors do not always profit from selling NFTs.
Disclaimer: The information provided on this page does not constitute investment advice, financial advice, trading advice, or any other sort of advice and it should not be treated as such. This content is the opinion of a third party, and this site does not recommend that any specific cryptocurrency should be bought, sold, or held, or that any crypto investment should be made. The Crypto market is high-risk, with high-risk and unproven projects.
Readers should do their own research and consult a professional financial advisor before making any investment decisions.