If you’ve seen the latest buzz craze in the NFT industry, seeing cartoon apes change hands for the price of a house, brand new and don’t know where to start – this article will help you buy your first NFT!
To put things into perspective, this is not a guide on which NFT to buy.
That’s up to you after you’ve done your own research and due diligence.
If though you’ve made your choice but are seeing technical jargon like wallets, MetaMask, minting, cryptocurrency, OpenSea and need a step by step guide, then read on.
This article will help walk you through the exact steps involved in buying an NFT, and how not to run in to scams or lose your money.
To buy an NFT you will need a digital wallet, cryptocurrency, gas fee and the official link to purchase. A digital wallet provides a unique address assigned to you. All NFTs are purchased using cryptocurrency and are linked to the wallet address as proof of ownership.
The good news is setting up a digital wallet is 100% free and no more complicated than applying for a bank account.
It is possible to start from the very beginning, set up everything needed and have purchased your first NFT within 15 to 20 minutes!
Often the hardest part is choosing which NFT to buy, but that usually comes down to personal choice and the reason to buy.
Buying an NFT – Step by Step
There are many ways to buy an NFT.
They can be purchased directly from a NFT collections website during the mint (which is the first sale, and creation of, the NFT), they can be purchased from the secondary market such as OpenSea, Magic Eden, Solanart etc. and can be purchased using different cryptocurrencies.
Rather than trying to create an endless list of all different possibilities and permutations, instead we will take a look at the most popular and most used method which is purchasing an NFT using Ethereum with a MetaMask wallet and buying from the secondary marketplace OpenSea.
Setting up a MetaMask Wallet
There are an ever growing number of digital wallets on the market.
Almost all do exactly the same thing.
They hold your cryptocurrency, your NFT digital assets and provide a unique address held in the blockchain as proof of ownership.
The most popular digital wallet used by hundreds of thousands of people, if not millions, is MetaMask.
The MetaMask wallet can be accessed best through a browser extension.
If you need to set up your digital wallet, I recommend watching the following video, which does a great job of explaining all options visually so you can follow along:
With your brand new, exciting wallet now created, it’s time to buy and add the cryptocurrency you will need to purchase an NFT.
Although NFTs can be purchased using a number of different cryptocurrencies now, such as Solana and Polygon, for this article we will look at the most popular.
Ethereum was the cryptocurrency used to purchase the first NFT collection in 2017, which was CryptoPunks (which rarer punks can sell for over $1million today!).
Although Ethereum has by far the highest fees (known as gas fees) for purchasing NFTs, it is still the most commonly used by a very long way.
Unfortunately, it isn’t so easy to buy Ethereum using just the MetaMask wallet alone.
Having done this many times now, the easiest method I have found is to buy Ethereum using a trusted cryptocurrency trading platform such as Coinbase, and then sending your Ethereum from Coinbase to your MetaMask wallet.
It is probably easier than you think.
There are certainly steps being made in the industry to make the process as simple and easy as possible and buying NFTs now is certainly easier than it was 3 years ago, but there are still a couple of hurdles to jump.
There is though a relatively simple 3 step process:
- Open a Coinbase account
- Buy Ethereum using a Debit Card
- Send Ethereum to your MetaMask Wallet Address
The first two steps are straight forward.
Visit the Coinbase website and select the ‘Get Started’ button in the top right hand corner.
From here simply follow the onscreen instructions provided by Coinbase to set up an account and trade your first purchase of Ethereum.
How much Ethereum should you buy?
This is dependant of course on how much the NFT is you want to buy.
Unfortunately, it’s not possible to simply purchase the exact amount of Ethereum you need when buying the NFT. Your wallet needs to not only hold enough Ethereum to cover the purchase, but it also needs to hold enough Ethereum to cover the gas fee.
Gas fees are the charge paid to the miners who validate the purchase of the NFT on the blockchain.
The amount charged in gas at any given time is based on supply and demand and can change as often as every 15 seconds.
We did some calculations recently and the average gas cost to mint an NFT is $116.31.
It may cost more, or it may cost less but this will provide at least a guide.
It is better to have more Ethereum than you need, in case gas fees are higher than normal, rather than not enough and have to purchase more Ethereum and pay more fees.
Each time you purchase Ethereum you will have to pay a fee. Each time you send Ethereum from Coinbase to MetaMask you will need to pay a fee.
Therefore, it’s cheaper to carry out this process once rather than needing to do it a second time if you don’t have enough ETH (Ethereum) to cover the costs.
Mint or Buy an NFT
With all the setups complete, and our cryptocurrency ready to spend, its time to either mint or buy an NFT.
In reality these two methods are different and mean different things.
What is Minting?
Minting is the term given to creating the NFT on the blockchain whilst paying for the NFT direct to the NFT creator using cryptocurrency through a digital wallet. This process gives life to an NFT, and it becomes part of the buyer’s collection, and a record of ownership is written to the blockchain.
Whoever mints the NFT pays for the gas fees associated with the transaction.
What is Buying an NFT?
Buying an NFT refers to the purchase of the digital asset from another holder, usually on the secondary market using a NFT marketplace such as OpenSea. During the purchase the ownership of the cryptocurrency is passed from the buyer to the seller, and the ownership of the NFT is passed from the seller to the buyer.
This process happens in real time automatically, and a full audit trail of the transaction is recorded on the blockchain.
The buyer pays for the gas fees associated with the purchase, which are in addition to the NFT price.
There are other fees associated with the sale including any royalties to the NFT creator (usually between 5% and 10% of the selling price), and the NFT marketplace charges (usually 2.5% of the selling price).
These fees are included within the NFT price.
So, if for example an NFT had a sale price of 2 ETH with a 10% royalty charge, 2.5% marketplace fee – and at the time of purchase the gas fee was 0.025 ETH, the amounts paid and received would be the following:
- 2.025 ETH – Paid by the NFT Buyer
- 1.75 ETH – Paid to the NFT Seller
- 0.2 ETH – Paid to the original NFT Creator
- 0.05 ETH – Paid to the NFT Marketplace
- 0.025 ETH – Paid to the Ethereum Miner for validating the transaction
Although this allocation of funds looks complex, fortunately it is all carried out automatically in real time during the processing of the transaction.
The buyer pays 2.025 ETH, the seller receives 1.75 ETH and the remaining 0.275 is distributed between the creator, marketplace and miner automatically during the purchase.
This at least takes one complexity away!
Buy an NFT on OpenSea
The final step is to make the purchase.
First, we need to find the NFT we want to buy on OpenSea, and as long as the NFT holder has the NFT up for sale it should have a ‘Buy Now’ button on the listing, as shown in the screenshot below:
If your wallet is not connected, you will be prompted by OpenSea to connect, and your wallet will open asking for your permission to connect to OpenSea.
As long as your wallet is connected to OpenSea, your MetaMask wallet should open showing you the NFT price, the estimated gas fee at that moment in time and a Buy Now button.
You have two options:
- Press the Buy Now button, and your purchase will be processed and as long as it is successful you will see a confirmation screen showing you now own the NFT!
- Press the Reject button to stop the sale. Your MetaMask wallet will close, and you will be taken back to the OpenSea NFT listing.
Once the purchase has been made you can find your NFT on OpenSea using the Profile option under your Avatar in the top right hand menu.
Start Buying NFTs – In Conclusion
Diving in to the NFT world may seem incredibly daunting at first, just like anything new.
The same steps are made each time.
Once you have purchased your first couple of NFTs it will become as easy to you as making any other type of purchase online.
The key things needed to by an NFT include:
- A digital wallet – an example of this is MetaMask
- A place to buy cryptocurrency – an example of this is Coinbase
- Enough cryptocurrency to cover the NFT price and gas fees – an example of this is Ethereum
- A place to buy NFTs – an example of this is OpenSea
Following this same four step process each time will ensure you can easily purchase and safely store all your NFT digital assets now and in the future!