The NFT marketplace has been raging lately as the penetration of cryptocurrencies and the overall utility of the blockchain are being realized by the masses. NFTs are generally conceived as digital photographs or other valuable art pieces, but the real utility of NFTs is way beyond that. The picture format of NFTs is a dominant format but there are other formats as well such as audio, videos as well as virtual objects available in the metaverse.

Why purchase an NFT?

First things first, NFTs or Non-Fungible Tokens are digital assets (such as art, audio, photographs, in-game purchases, etc) which is backed by blockchain technology. As NFTs are integrated with the blockchain technology as their underlying, you can visit and verify any NFT that has been minted or transferred on the network.

Purchasing an NFT not only offers you proof of ownership but in addition offers other benefits. Some of them are:

1. Become a part-owner of an exclusive community. (Example Bored Apes, Crypto Punks, etc)

2. To own a valuable form of digital asset that provides proof of ownership and bragging rights.

3. The ability to receive commissions on the sale of your NFTs.

4. To be able to receive additional passive income with the help of staking your NFTs.

5. The ability to multiply your investment value in the long term.

6. The security and reliability of the underlying blockchain technology.

What are the steps to invest in NFTs?

Now that you have looked at the benefits and reasons to own an NFT, and if you are still convinced to own one. Here are the three steps following which you can easily purchase your valuable NFT.

1. Find out good projects and research on them

The cryptocurrency industry has received a lot of traction recently. Thereupon, the number of new NFTs that come onto the market every day has increased multi-folds. Out of the hundreds of NFTs that are out there, only a handful of them has some true intrinsic value.

Hence, it is important you do proper research and find out sound projects which are genuine in nature and aim to stay and grow over time in the market. Some of the key traits of successful NFTs include, a Genuine and passionate team behind the project, High usability, and real-world use cases. You should also make sure that there is an existing community, who are genuinely interested in the project and are ready to invest in them.

2. Look for a credible exchange that facilitates the NFT transaction.

After you have conducted your thorough research and made up your mind to invest in a particular NFT. The second step is to look for a credible exchange or an NFT marketplace from where you will actually purchase the NFT. Always try selecting the leading exchanges that are already established and have sufficient buyers and sellers within. This will eliminate the risk of fraud and theft. Some of the top global NFT exchanges are OpenSea, Rarible, Nifty gateway, SolanaArt, Binance NFT Marketplace, etc. Also, buying your NFT from a good marketplace will make sure you don't have to worry about liquidity, in case you want to sell your NFT in the future.

3. Obtain a cryptocurrency wallet

NFTs are digital assets, therefore you need to have a virtual wallet in which you will store your NFTs. For this, you need to create a crypto wallet. Some of the most commonly used wallets are MetaMask, Trust wallet, etc. After you have successfully created the wallet, you will have to add cryptocurrencies to it, in order to purchase your NFT. Most of the NFT exchanges work on a particular cryptocurrency like Ethereum, Solana, etc. Hence you will need to first convert your fiat currency (Rupee or Dollar) into the required cryptocurrency. After that, you'll have to connect your wallet with the exchange and conveniently purchase the NFT. A small ‘Gas Fees’ (transaction charge) would be charged, which you’ll have to pay in terms of the native currency. Post this, you will be the owner of your desired NFT.

Conclusion

The most significant part of the process of acquiring an NFT is examining the project. If you can find out the hidden gems from the industry, you will be able to generate insane returns in the future. Some of the most common examples of such are Crypto Punks, which were initially given out for free but are worth millions of dollars presently. Henceforth, try to research and find out the best NFTs in the marketplace and purchase them with the intention of possessing a valuable asset, rather than a short-term trade. Even after the rising trend in this space, cryptocurrencies and NFTs are extremely risky and speculative investments, hence access your risk appetite before you purchase any NFT or other cryptocurrencies.