After cryptocurrency, the finance market is now seeing an increasing prevalence in non-fungible tokens, also known as NFTs, as crypto and traditional investors seek to own these assets.
NFTs are pretty much similar to cryptocurrencies, except each one is unique and represents ownership of a digital object. These may include a collectible, soundtrack, artwork, or even an in-game item. These tokens are called ‘non-fungible’ because no one can replicate them. After all, as stated earlier, each one is unique, making them irreplaceable.
Furthermore, NFTs aren’t available or purchasable in centralized crypto exchanges. Instead, you’ll have to find an online marketplace built explicitly for NFTs. These marketplaces are platforms where one can display, store, or trade NFTs.
If you intend to engage in NFT investments, you must first find the right marketplace. Fortunately, with these tips, it should come easy:
#1 – Take a look at the transaction fees of the platform
Each NFT marketplace requires users to pay a fee for each transaction they make within the platform. For your reference, the transaction fees may range from 50 cents to 15 US dollars.
If you’re looking for an NFT marketplace, you’d want to choose one that has a transaction fee on the lower end of the spectrum. However, it’s worth noting that the fees may vary according to the number of transactions ongoing in the platform. The rule of thumb is that the higher number of people making transactions, the higher the fees. Thus, it’s advisable to constantly monitor the fees on a marketplace since they may change now and then.
That’s precisely why it’s crucial to stay up-to-date with NFT news. An example of an excellent platform to get the latest news on this subject would be NFT Club, a community of NFT enthusiasts.
#2 – Make sure they allow users to integrate into many crypto wallets
When you decide to invest in NFTs, there are several steps you must first take. For starters, you should create an account on the marketplace you’ve chosen. Once that’s done, the platform may ask you to connect to a crypto wallet of your choosing, where your NFTs will be stored.
However, that’s often not the case, at least for certain marketplaces, especially if they would only allow you to integrate to their own wallet. This is where you must take the first consideration.
Naturally, you’d want to choose a marketplace that would allow you to integrate your account to many crypto wallets, preferably one with both hosted and non-hosted wallets:
- As the name suggests, a hosted wallet is a type of crypto wallet hosted by the NFT marketplace. This means they’re responsible for the safety of your cryptos or NFTs. Users prefer this type of wallet as they no longer have to worry about losing crypto when they forget their passwords. Hosted wallets also tend to be easy to set up and user-friendly.
- A non-hosted wallet, on the other hand, doesn’t rely on the NFT marketplace. You, the user, are responsible for the safety of your own assets.
While it’s indeed much more of a hassle when you use a hosted wallet, you retain complete control over your funds. Moreover, with a non-hosted wallet, you don’t have to submit a request to the platform every time you want to make a transaction, making things a bit more convenient in the long run.
Apart from selecting the type of crypto wallet, you must also ensure the marketplace can integrate with wallets that allow for Ethereum transactions since most NFTs are Ethereum-based.
#3 – Check the currencies available in their platform
If you look into a list of NFT marketplaces, you may notice that specific platforms offer both fiat currencies (e.g., USD, EUR, GBP) and cryptocurrency (e.g., BTC, ETH, XRP) options.
Of course, if you want to find the perfect NFT marketplace for your investment efforts, you may have to focus on platforms that have as many currencies available as possible. Again, NFTs are compatible with Ethereum-based coins, so you’d want to look for a marketplace that’s compatible with coins built in the Ethereum blockchain.
Here’s a look at some examples of these coins:
- 0x (ZRX)
- Augur (REP)
- Bancor (BNT)
- Basic Attention Token (BAT)
- Civic (CVC)
- OmiseGO (OMG)
- Status (SNT)
- TenX (PAY)
When choosing a marketplace, the more currency options it offers, the better. But you might want to focus on Bitcoin and Ethereum currencies since NFTs revolve around these two cryptos.
#4 – Decide on a specific type of NFT marketplace beforehand
Although most NFTs nowadays involve artworks or soundtracks, there are other types of NFTs that you may not be aware of. These NFTs are traded and stored in specific kinds of marketplaces. If you intend to find the right platform, experts suggest choosing the particular type of NFT marketplace before anything else.
Here’s a closer look at your options:
- Mass Marketplaces: This refers to the type of platform where one can store and trade all kinds of NFTs––trading cards, artwork, in-game items, soundtracks, and many more.
- Art Marketplaces: An art marketplace focuses on storing and trading artworks as NFTs. There are two subcategories of this type of marketplace: non-curated and curated. Non-curated is available to all users, while curated platforms are available to a select few. It’s open to collectors, buyers, and even content creators, particularly artworks.
- Gaming Platforms: As the name suggests, a gaming platform focuses on virtual reality tokens and in-game items. The traders in these platforms are mainly players of specific games, although there are also investors that collect different in-game items and sell them when the time is ripe.
- Sports Marketplaces: Sports marketplaces are platforms that mainly involve sports memorabilia, such as sports highlights, NBA trading cards, photos, or even digital autographs.
Since each type of marketplace handles different kinds of NFTs, it’s a good idea to decide on the kind of NFT marketplace before you even consider anything else.
As profitable as it may be, you must remember that non-fungible tokens aren’t as established as cryptocurrency in the digital world, and there are a lot of things you may not know about NFTs. Hence, if you want to invest in NFTs, you need to find a marketplace that can actually help you get used to NFT investments. Fortunately, these tips should be able to help you in that regard.
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