Non-fungible tokens (or NFTs) are blockchain-developed tokens that attest to the governance of digital items such as images and video files or (less common) physical assets.
Throughout 2021, NFTs have exploded in popularity and transaction volume as big brands and celebrities create and buy them.
Many leading NFT projects such as Bored Ape Yacht Club, CryptoPunks, and Pudgy Penguins are standard ERC-721 tokens built on the Ethereum blockchain.
On Ethereum, the OpenSea NFT market dominates NFT transactions: As of October 2021, 97.9% of Ethereum NFT activity occurred on OpenSea.
In this decryption guide, you will learn some simple steps to buy your first Ethereum NFT:
– Buy Ether (ETH) on cryptocurrency exchanges like Coinbase or Kraken.
– Create a crypto wallet such as MetaMask.
– Send Ether from cryptocurrency exchanges to your wallet.
– Sync your wallet with NFT marketplaces like OpenSea.
– Buy NFTs on this marketplace with ether in your wallet.
1) Buy Ether
You need ether to enter the world of NFTs because it is the native currency of the famous Ethereum blockchain network, on which most NFTs are developed.
To get ether, you need to visit a cryptocurrency exchange such as Coinbase or Binance.
Not all exchanges allow you to buy and sell all cryptocurrencies. However, as it is the second-largest cryptocurrency by market cap, ether is listed on almost every exchange.
If you’re new to the crypto market and don’t know which exchange to use, check out the guide to help you decide.
While most NFTs are on Ethereum, there are other options. Some, like NBA Top Shot, are built on Flow, an NFT-focused blockchain created as a replacement for Ethereum.
More recently, there has also been an explosion of NFTs based on Solana, the “Ethereum Killer” (a term for the network that could replace Ethereum in the future).
Back to NFTs developed on Ethereum…the second step is to create a crypto wallet!
2 Create a crypto wallet
There are many Ethereum wallets out there, but the most popular is MetaMask.
MetaMask is a browser plugin that works well on Google Chrome or Brave. Once installed, it allows you to store ether and tokens developed on Ethereum.
Creating a crypto wallet sounds difficult, but it’s fast and easy. Download and install MetaMask from the website, and when the little fox logo appears in your browser, click it. You must fill in some steps, such as creating a password.
MetaMask will provide you with a “recovery password”, which you need to keep in a safe place, such as a piece of paper. This is a twelve-character phrase that can be used to unlock wallets on MetaMask.
Be careful with your crypto wallet. Phishing scams target MetaMask users on social media. Sometimes they look so realistic that even big NFT collectors fall in love with them.
No need to panic: as long as you don’t share your seed phrase, you’re safe.
3) Send Ether to your wallet
Now that you have ether and MetaMask, it’s time to send ether to your wallet.
If you can buy NFTs directly on Ethereum using your brokerage account, you do not need to complete this step.
But NFT transactions work like going to a grocery store that doesn’t accept cards, so you need to carry physical cash in your wallet.
It is also possible to buy ether directly on MetaMask. However, the fee for this option is higher than what the broker charges. Fortunately, sending Ether to MetaMask is much simpler!
Go to your exchange’s “Submit” or “Withdraw” page, which allows you to transfer funds to a crypto wallet.
It will ask you to enter the amount to send and the blockchain address, then you need to copy the public address (starting with 0x) shown in MetaMask. Think of your Ethereum address as your blockchain bank account number or something.
Remember: MetaMask automatically generates a public Ethereum address for you when you create your wallet. In the future, you can create any number of addresses.
4) Sync your wallet with OpenSea
NFTs are traded on the NFT marketplace, and OpenSea is by far the most popular when it comes to NFTs powered by Ethereum.
Creating an OpenSea account is just a few clicks away. In the upper right corner of the OpenSea website, you will see a wallet icon.
Click on it and you’ll see a long list of supported crypto wallets. If you created this wallet, choose MetaMask. If you choose an alternative, select it from the list; many wallets support the WalletConenct protocol for connecting to websites.
When you select MetaMask from the list, OpenSea will display a window indicating “Connect with MetaMask”. Click Next and your profile will be created automatically. get ready!
Until you customize your OpenSea account with a profile picture and username, your profile will be “unnamed”, containing only your public Ethereum address. But don’t bother adding more details – OpenSea is not a social networking platform.
5) Buy NFT on OpenSea
The crypto industry is not known for its user-friendly platforms and applications. However, OpenSea is an exception: the site is almost as intuitive as if you were visiting an e-commerce platform.
The downside is that customer service is almost non-existent, but you’re unlikely to need much help.
Once you’ve decided which NFT to buy, you’ll have three options on OpenSea: Buy Now, Bid, and Offer.
NFTs may be listed by their owners at a fixed price (the “current price”), usually denominated in ether. You can buy this NFT by paying the asking price.
You need to click “Buy Now” and follow the steps. Before continuing, make sure you have enough ether in MetaMask!
If you want to buy NFTs for a fixed price, you will have to pay transaction fees (called “gas” in Ethereum), which are by no means fixed. Prices fluctuate frequently, which can be confusing for new investors.
You can check the gas status (NFT transactions may require gas, like “ERC-20 Transfer”, so you can use that as an estimate).
MetaMask will suggest an amount based on current network conditions, so you don’t need to calculate it.
make an offer
Maybe you like to negotiate and find your counter-offer attractive. If so, you can make an offer and see if the seller accepts.
If you make an offer on the NFT and the seller accepts, the seller pays the gas.
Some sellers like to compete for their NFTs, so they will auction them off instead of selling them at a fixed price. Your only option is to bid what you think is fair.
But your bid needs to be at least 5% higher than your previous bid. If the highest bidder also meets the minimum bid requirements, they will win the auction.
Finally, some NFT owners will not sell their NFTs (either at a fixed price or by auction). But that doesn’t mean you can’t try to convince him with an attractive offer.
These NFTs will only have a “quote” option available. If you don’t ask, you won’t get it.
If you’ve followed all these steps to make a purchase, congratulations on purchasing your first NFT! Click on your profile in the top right corner of OpenSea and you will see a list of all NFT purchases.
You can hide your NFTs in your profile (like Visa, Coca-Cola and Budweiser should do!).
Remember: you cannot hide them in your public Ethereum address (viewable in block explorers like EtherScan). Unlike traditional finance, cryptocurrencies are very transparent.
*Translated and edited by Daniela Pereira do Nascimento with permission from Decrypt.co.