How to Buy NFTs or also known as Non-Fungible Tokens?

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From the famous NBA player Lebron James dunking highlight sold for more than $200,000 to the neon cat meme gif sold for about $500,000+ to Jack Dorsey‘s first-ever tweet that costs $2.5 million, we cannot deny the fact that non-fungible tokens (NFTs) are becoming overactive. Although there’s no physical exploit attached to them, they are uncontainably booming fast-paced in a way we never expected them to be.

In a nutshell, NFTs are established on blockchains like PolkadotCardanoEthereum, and anywhere people can put their money to issue customized tokens and smart contracts to which they can put up digital art. People around the globe are able to connect so they can buy, trade, sell and exchange currency however and whenever they want.

But are these non-fungible tokens a good and profitable investment? Or are they just a hype everyone wants to flock in? In what aspect were they valuable?

How to Buy NFTs?

To buy an NFT, you will be needing a crypto wallet like MetaMask.

MetaMask is a platform that lets its users access their Ethereum wallets through a mobile app or browser extension. Here, you can fund your wallet and use it to buy digital artworks or collectibles.

Are the NFTs a Good Investment?

The reason behind the fever and frenzy over NFTs was just like any other piece of art. NFTs are on the hype, and that’s why people think they are valuable enough to take a hold of them. 

You must have thought about why creators can’t just create more copies of them, however, that is not possible. The producers of digital art cannot issue more of the same token as it is placed in the blockchain. The creator of the digital content cannot just step in and do as he pleases the moment the rules were written, and a contract was made.

illustration of Mona Lisa for NFT

 

Technically speaking, the creator could make more issues of the digital product. Still, there would be a variation on either the launch date or ticker symbol that probably makes them different compared to the original artwork even when it looks 100% identical. Similar to physical artworks, you can buy a copy of the Mona Lisa, yet there will only be one genuine Mona Lisa that exists.

So, are non-fungible tokens considered a good investment?

Once the resale price of the digital product or artwork is considered, NFTs can give you an opportunity to make money. Like buying physical art, having the art itself is not consistently profit-making; it is selling at the right price that makes more revenues. If you can obtain a high-cost NFT and sell it more expensive than it initially cost, you could actually earn a decent profit.

Moreover, NFTs can be good as their blockchain component is designed to hinder possible fraudulent activities. For example, although people can create a duplicate of authentic digital art, the original and rights still belong to the person who holds the NFT.

Non-fungible tokens are a good investment and are profitable depending on what you buy. They are pretty much a modern type of investment so there are still ample things to learn about them. But if you are really interested in putting up your money to invest in these tokens, here are the things you should consider in choosing an NFT:

  • Is the NFT notorious? You should go for famous creators, brands, or genres that have a name for themselves, famous or “notorious.” The more eminent the creator or brand is, the safer your investment will be. Big names like Star Wars or Harry Potter will always have value because of their fandom worldwide to buy up their merch. So, if you will go for brands and creators that are already well-known, you will be at ease knowing that these big names have supporters to back them up. 
  • Is the NTF the first one to be created? People will always value a piece of history. Does the NFT you set your eyes on the first of its kind in the industry? Or the first and original product from a specific creator? Acquiring the first is an advantage, it creates excitement, hype, and buzz, so if you can buy something that is “first,” chances are big that it will be valued greatly.
  • Is the NFT rare? I bet you already know, but the rarer the item is, the more valuable it becomes. That is the reason why limited items are also such in a hype where people worldwide go crazy just to get a hold of them. You could take advantage of the rarity of an item as they are only available in a short period before they become super valued and ultra-rare. Scarce digital collectibles can be sold at an extremely high price.
  • Does the NFT have physical privilege? Ideally, an NFT should offer something more than the digital element linked to it. Perhaps, a physical asset that has value to people attached to it. For example, buying Logan Paul’s NFT allows you to meet him personally. The physical aspect holds a value that could entice them to support the NFT.

Best NFTs You Could Go For

With countless NFTs around, here are a few NFTs you could consider when buying one.

NBA Top Shot NFT illustration

Sports NFTs

There’s a big probability for sports non-fungible tokens to be huge as an impressive number of sports NFTs capital flooding into the market. Dapper Labs, who created one of the most well-known sports-related NFT applications, NBA Top Shot, has made more than $500 million in gross sales. This platform is a marketplace that provides highlight reels and NBA-licensed digital videos of players. Perhaps a time will come that NTFs will render players to negotiate their rights over the footage of themselves. 

When an NFT is bought on NBA Top Shot, the buyer does not gain the rights to own the NBA highlight reel but rather earn a license to use, display and copy the highlight. The bought NTF can be used non-commercially, on a marketplace to sell NTF, or as part of a third-party website that could likely be used to qualify the trading game aspect of the NFT.

Music NFTs

The electronic dance music (EDM) industry surely comes big and still holds the potential to be bigger. Artists like Blau, Steve Aoki, etc., can create hype as no one has seen before. 

MetaMask homepage

Key Takeaways

The widespread of blockchain is visible in many industries. Creating, selling, or flipping digital collectibles became an entirely new way to earn money. While many aspects have led to the evolution of blockchain, the emergence of non-fungible tokens is now driving extension even in the professional sports world and entertainment across the globe. 

Every minted NFT can be traced back to the first issuer using the blockchain NFT has created. The ability to be traced back to the original creator eliminates the requirement for third-party verification and offers a built audit trail that is used for authentication purposes. However, the potential for both willful and unintentional infringement still remains.

With this being said, NFTs and blockchain firms need to be attentive to the potential and compliance issues as regulators. Essentially, a business operating in this industry must secure legal documentation with proper representation, covenants, terms and conditions, disclosures, and legal representation to avoid vital conflicting legal consequences.

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