If you’re like me, you spent several months hearing the word NFT (which stands for Non-Fungible Token) and letting it go in one ear and out the other.
Nope, not for me. I’m too busy building my businesses and playing golf to be concerned with such nerdiness. Plus, I don’t need more stuff in my life. Aren’t NFTs just a way to clutter up your digital life?
Then I discovered there was an NFT related to golf (my current passion/obsession), AND this particular NFT would give me exclusive access to purchase a membership to play golf in the future on a real course that the community was going to build or buy. What!? Now I’m in.
I’ll tell you about my golf-related NFT purchase, as well as my very first NFT buy, the Coachella music festival NFT. But first, let me give you exactly what you came here for. Here’s how to buy an NFT (the exact steps so you can quickly buy your own).
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Exact Steps: How to Buy an NFT
You’ve decided to buy an NFT. You’ve heard some of the positives and negatives about this space, but you’re still ready to try it for yourself.
There is definitely some friction involved in purchasing an NFT. Thankfully, technology is advancing very rapidly. In the future, this process will look much easier. Here are the steps for now:
1. Setup a Platform/Exchange Account to Purchase Cryptocurrency
Most NFTs are sold for cryptocurrency. Therefore, the best place to start on the journey is to purchase some cryptocurrency for yourself.
You can purchase cryptocurrency at a number of places. By and large, it’s mostly purchased through exchanges and/or platforms. On these platforms, you can exchange US dollars (via bank transfer or credit card) for cryptocurrencies.
Yes, that means you’re going to have to learn a little about cryptocurrencies as well.
Thankfully, most of the platforms do a great job with education, which is free with your account. So it’s best to just go to a platform, like Coinbase, and get started educating yourself and eventually purchasing crypto.
2. Setup a Crypto Wallet
Next, you will need to create a “wallet”. The wallet will be used to hold your cryptocurrency and actually make the NFT purchase. It will also be used to hold your NFT after purchase.
Why not just use the platform to buy/hold the NFT? Well, in some cases the platforms have created their own wallets. For instance, Coinbase has Coinbase Wallet.
But not having a wallet is missing one of the biggest benefits to the whole digital asset world – easy exchange. A wallet – your own wallet – is needed to move about and use your digital assets across all the exchanges and platforms.
A crypto wallet theoretically acts just like the physical wallet in your pocket, but even better. You take it with you everywhere and can access your currency AND your other digital assets (like NFTs).
One of the most popular cryptocurrency wallets is MetaMask. But like platforms, there are many wallets available today.
3. Research NFTs
Now the fun part. Start looking closer at NFTs. If you’re like me, you might have taken a peek at NFTs or stumbled upon a headline six months or a year ago and thought, “collecting silly pictures of apes? Nah, I’m out.”
Look again. A lot has happened over the past year in the NFT world. There are some great NFT projects, backed by great artists and founders.
Also, NFTs have moved well past digital art and into the world of what’s known as Utility NFTs. Utility NFTs come with real-life benefits (access and community). This is what got me hooked!
The best place to see all of the NFT projects is probably on the OpenSea.io viewing/trading platform. Yes, this means you need another account. Join OpenSea for free and start browsing NFTs. Be sure to check out the Utility NFT section.
But don’t just scroll…think of the brands/passions/themes you love and search OpenSea for related NFTs. For instance, I love golf and events. So I’m now on the lookout for all golf-related NFTs or NFTs around events.
Research should not be limited to OpenSea. Twitter is big for the NFT world so be sure to search there as well (i.e. search for “your interest + NFT”).
Other places to spot NFTs:
4. Join a Discord (Optional)
Many NFTs will come with a community of people interested and/or invested in the project. This community usually exists on a Discord server. So it’s a good idea to join Discord and connect there.
If you’re not familiar, Discord is like a Facebook Group, Slack, etc. It’s just a place with channels to discuss topics.
At first, I wasn’t sure why but the NFT world seems to love Discord. Then I realized it was the verification process – not only for limiting bots but to create private rooms through wallet verification.
So jump into Discord and search for NFT projects you might want to participate in. This isn’t a required step to buy an NFT, but it’s one I take and recommend.
Being a part of the NFT’s discord community will give you a sense of what other NFT holders are thinking and will also give you a chance to participate in the benefits associated with the NFT, if any.
You will need to connect your wallet with the discord server to show you have the NFT – which may or may not unlock secret Discord channels for discussions.
You can usually join an NFT’s discord server before the NFT has minted (been created) and can get early access to buy one of the NFTs.
5. Participate in a Minting (If Available)
If you get the chance, I recommend participating in an NFT minting. They are super exciting! The mint (or minting) is the act of releasing the NFT and making it available for purchase for the first time.
NFTs are usually minted as a collection – so you may have a handful (or thousands) of NFTs released through the mint. It’s up to the NFT creator to decide how many they are minting.
The creator will usually set a fixed price for the NFTs involved in the mint. If multiple versions of the NFT exist (which is often the case, but not required) then the purchaser will get a random NFT.
The urgency of the mint (NFTs can sell out in seconds) and the randomness of the NFT you actually get makes the mint a must-do part of your NFT experience, in my opinion.
Of course, the downside of buying during a mint is that you have to wait for a minting to happen. You can see upcoming mints at NFT Calendar.
But if you don’t want to wait for an NFT to be minted to make a purchase, you can simply buy one immediately on the secondary market.
6. Buy/Bid on the Secondary Market
The secondary market for NFTs exists across all of the NFT exchanges/viewers. OpenSea.io is probably the largest secondary market. You could start there.
There are three ways to buy an NFT on the secondary market. You can buy it immediately, place a bid on an NFT being auctioned off, or place an offer on an NFT that’s not being auctioned off.
To buy your NFT immediately simply locate the NFT you want and click buy now. The exchange will ask to connect to your wallet where the NFT will be exchanged for the sales price in cryptocurrency. Simple.
Bid/offers take more time and they are not guaranteed to result in a sale in your favor. Still, this may be the best way to purchase an NFT for the “best” price.
7. Secure Your NFT
Once you have purchased your NFT, it will reside in your wallet. Like your physical wallet, you need to secure your crypto wallet to ensure that your NFT stays yours.
I asked, Nick True, founder of Mapped Out Money Youtube Channel, and this is what he had to say about securing your NFT:
“When you’re first getting started and don’t have a large amount of money in NFTs, it’s likely not worth doing more than basic security. This includes using your own secure wallet like MetaMask, a difficult password generated automatically from Last-pass or One-password, keeping your Seed Phrase hidden in a secure location, and use 2FA when logging in.
Once you have a significant amount of money tied up in NFTs, you would likely want to pursue moving them to cold storage using something like Ledger.”
More Questions and Tips For Buying Your First NFT
It took me several days to get comfortable with the idea of buying an NFT. There are so many questions. Here are some of the questions I had, along with my two experiences.
How Much is an NFT?
NFTs range from worthless to multi-millions. You can purchase an NFT right now for less than a $1 or you could spend your whole life’s savings on an NFT. Your call.
NFT prices fluctuate with supply and demand. NFTs skyrocket in value. NFTs crash to being worthless.
If you’d like to know what the cheapest price you’d have to pay for a random NFT from any one collection would be, look no further than the “floor price” of the NFT collection.
The average floor price of the top 10 NFTs by volume on OpenSea.io at the time of this article was 13.45 Eth. That’s $335,893.35 in US Dollars!
Most Utility NFTs tend to be released at a price relative to their utility value. In my case, I purchased a Coachella poster NFT and it was sold initially for $180 US Dollars.
Is NFT a Good Investment?
This is THE question! You’re potentially interested in NFTs as a way to increase your wealth over time. I get that. NFTs are extremely volatile and speculative, however.
So as a caveat up front, you have to realize you could lose all of your money buying an NFT. The same could be said of stocks, of course.
Certain NFTs have proven to be an excellent short-term investment. Investors are getting rich. Many investors are losing big as well. It’s the wild west in NFT land right now.
Like any investment, you want to practice a few disciplines to get the best result:
- Start small and only risk an amount of money that you’re willing to lose entirely;
- Buy a portfolio of NFTs vs just one to spread your risk around;
- Understand WHO you are buying – research the artist and founders (do they have a good track record?); and finally,
- Buy low and sell high.
As I shared, I have Utility NFTs. I believe my two NFTs will rise in value as the benefit of holding these particular NFTs increases in value. I’m willing to hold these two NFTs for a long time to find out.
Some investors are using the NFT opportunity to arbitrage (or flip) for profit. Purchase NFT pre-mint or at mint and then sell when hype surrounding the NFT is at it’s peak.
What’s the Best Place to Buy an NFT?
I have purchased NFTs from FTX (at mint) and OpenSea (a secondary market buy). I found both purchasing experiences seamless and straightforward.
How Do I Get the Most Value from an NFT?
My advice is to stick to Utility NFTs. Unlike simple digital art NFTs, these utility NFTs some with the promise to deliver value down the road. This increases the chance that buyers will hold their NFTs longer as well.
Secondly, join the community around the NFT. Join the discord server, follow other holders on Twitter, and attend IRL events that your NFT community might put together.
Finally, show off your NFT. Setup your OpenSea profile. Even consider printing your NFT in physical form using a service like Flow NFT.
How Do I Sell an NFT?
You can sell your NFT on OpenSea.io or any other NFT exchange. You can list a “buy now” price or place it up for auction.
My NFT Purchases
As promised, here are my first two NFT buys – where I found them, how I made the purchase, and what I’m expecting from them.
How I Purchased an NFT on FTX: The Coachella Collectibles (purchased at mint using Solana)
I first discovered this NFT when looking into NFTs as a way to market your event/conference. I had heard of Gary Vaynerchuk using this strategy and wondered if it could work for me.
Startup BlockFi was a major sponsor at last year’s event and cyrptocurrency was a topic for discussion, so I thought mixing NFTs/crypto and our event made sense.
So, I joined the Coachella (music festival) Discord server and started learning about their NFT project. It turns out they were planning to mint the first collection of NFTs that weekend. I took it as a sign that I should participate.
Coachella was minting 2 NFTs collections:
- 1,000 Desert Reflections Collection (posters)
- 10,000 Sights and Sounds Collection (event photos and sounds)
They were also auctioning off a 3rd set of 10 NFT keys, which come with exclusive event access and perks.
To prepare, I opened an account and wallet with FTX and purchased $1,000 of Solana coin (the platform and coin were dictated by Coachella).
On the day of the mint, I headed to the launch landing page and waited until the countdown clock said 0:00. Then I acted fast and purchased one of the Desert Reflections posters. I immediately tried to purchase another poster and they were sold out. They sold out in three seconds!
Then I purchased four photos from the Sights and Sounds Collection. That was the end of my minting experience as Coachella limited your NFT purchase to five.
It was a blast to participate in my first NFT mint. My plan is to sell my Coachella NFTs in the near term. I’m not a fan of Coachella, per se, and so I’d like a true fan to be able to experience the benefits of holding.
The issue is that many Coachella fans don’t understand NFTs yet. I’m hopeful as more of them come to understand this technology, the demand for a first edition Coachella NFT will increase in value. That might happen in the next few weeks leading up to the event. Or it might happen next year. Time will tell.
How to Buy an NFT on OpenSea: The LinksDAO Global NFT (purchased on secondary using Ethereum)
The idea behind LinksDAO? Create a decetralized autonomous organization (DAO) that would release an NFT collection and build a golf course (yes, a real course) and membership. Holders of the collection would then get voting rights in the DAO, and more importantly, get exclusive access to become a member of a future golf and leisure club.
Have I told you I’m obsessed with golf? Sign me up! I jumped into the discord and learned everything I could about the project. I listened to podcasts featuring the founders. I poured over all of the press they were getting. I check out activity on Twitter.
Once I felt comfortable, I loaded up my Coinbase account with Ethereum and set up my first wallet, with MetaMask. I then navigated to OpenSea and searched for the LinksDAO NFTs. A few NFTs were available for sale so I bought it. After a few days I decided to buy a second LinksDAO NFT. This time I grabbed up the Global version, giving me more voting rights, event access, and membership options.
I’m a long-term holder of this NFT – at least until the course purchase is made and I get to play it once. 🙂
So that’s my big brain dump about NFTs and how to buy them. I hope you learned something and feel more comfortable about jumping into this yourself.
Leave a comment. What questions do you have about buying NFTs? Which NFT do you want to buy?