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Non-Fungible Tokens popularly known as NFTs have been commanding a great deal of attention these days, especially from the artist, art collector, and speculator community. The past few years have seen a tremendous rise in their popularity with many NFT traders hitting the headlines frequently for selling these artworks for millions of dollars. This has many wondering, what are NFTs and how to trade NFTs safely for profit?
Celebrities too have joined the bandwagon and some of them like Tom Brady, now have their own exclusive NFTs. As no middlemen are involved in the trading process and the tokens can be bought directly from the sellers, NFT trading is very popular.
The Ultimate Guide on How to Trade NFTs Safely for Profit
What Are NFTs?
In simple words NFTs are tokens that are completely unique and once owned by you can be owned by no one else unless you decide to sell them or give them to some other person. Though attempts may be made in the market to copy whatever the NFT tokens owned by you represent, you can maintain sole ownership of it. Moreover, NFTs involve high levels of security as ownerships are locked via a blockchain which keeps a permanent record of every time the NFT changes hands.
Just like stocks and cryptocurrencies, NFTs are tradable but their value is not fixed and entirely depends on market demand forces. This means a piece of artwork can either be totally worthless or extremely valuable depending on whether anyone else wants to buy it. You also need to know how to trade NFTs safely so that you derive complete value off of them.
Where to Trade NFTs?
To start trading these digital assets you need to visit the NFT marketplaces. There are various marketplaces these days on the internet that let NFT enthusiasts trade NFTs safely. Some of the famous marketplaces like OpenSea literally contain thousands of these digital assets that can either be purchased directly from there or by getting involved in the auction process. So, if you want to get involved in NFT trading then you should keep checking out these marketplaces frequently so as to not miss the drops of any of the highly sought after NFTs.
Can You Trade NFTs for Cash?
The prices of NFTs are set in terms of cryptocurrency used by the network on which the cryptocurrency is being registered. For example, say if a creator has minted an NFT on the Ethereum Blockchain then to buy it one has to pay using Ethereum. So, if you are wondering if you can use cash to trade NFTs then the answer would be usually no. However, some marketplaces do accept payments in terms of fiat currencies like US dollars, but in most cases, one cannot use their cash or credit cards to directly pay for an NFT.
Things to Know Before Starting With NFT Trading
Before starting with the trading journey, it should be clearly understood that NFT trading is not a random get-rich-quick scheme. The NFTs are merely demand-driven digital assets and there are certain levels of probability that the price of an NFT might increase or decrease. Due to a lack of proper understanding, there have been a large number of amateur NFT traders who have lost a whole lot of money during the trading process. Read on to understand how to trade NFTs safely for profit.
How to Trade NFTs Safely?
Trading NFTs is a pretty easy process that can be done by every other person. One only needs to earn or buy the tokens at a lower price and then sell them at a higher price to book gains.
There are some steps that you should be following while starting off with your NFT trading journey
Step 1: Get yourself a crypto wallet
The first thing you need to do before starting with the trading process is to obtain a crypto wallet. This is because the crypto wallet is the place where you will be storing the NFTs that you earn, purchase or sell.
[NOTE: As most NFTs are built on the Ethereum blockchain, it would be beneficial to get a suitable crypto wallet such as Metamask which is suitable for that type of technology.]
Step 2: Purchase the NFTs
After setting up the crypto wallet purchase the NFTs that you want to trade. The NFTs can be purchased from the NFT marketplaces where they are being sold. On the contrary, NFTs can also be won by playing some fun NFT games.
Step 3: Visit the NFT marketplace
Visit the NFT marketplace from where you want to purchase your desired NFT and create your user account. This step won’t require much time and your profile will be ready within a short span itself.
Step 4: Start with your trading journey
Finally, now after completing all the above-mentioned steps, you will be ready to start trading your NFTs. This means you can now you can purchase NFTs you like and list the NFTs that you want to sell-off.
Indirect Ways of Trading NFTs
The easiest way of NFT trading is buying and selling them through various NFT marketplaces. However, the ones who don’t want to trade them directly can resort to some other indirect ways as well.
Investing in the NFT industry
Trading on NFT marketplace tokens or cryptocurrencies is another way of NFT investing. Some larger NFT marketplaces like FLOW are being traded on crypto exchanges and those can be purchased to get indirect exposure to the NFT industry. Similarly, cryptos like Ethereum which are widely used for NFT trading can also be purchased as their value would also get somewhat influenced by the demand of NFTs that require them.
NFTs can also be traded within a virtual reality world called Decentraland in which each parcel constitutes an NFT. With popularity, the price of these parcels goes up. The parcels can be sold or rented to others thus facilitating a range of NFT trading options.
Creating and Selling NFTs
By simply creating NFTs as per market requirements and then selling them a lot of money can be made. NFT creation requires no special knowledge but transferring can be somewhat difficult.
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