Non Fungible Tokens (NFTs) are a type of digital asset on the blockchain that have 3 key characteristics: they are unique or have a limited supply, they are rare and they are indivisible.
NFTs can represent many different types of digital assets but in 2021 we have seen a growing popularity for digital artwork. Some NFTs have sold for staggering amounts at major auctions such as Christie’s, where a work by Beeple, one of the most famous NFT artists, sold for $69 million.
The NFT market is booming and buying a piece of digital art could be a good investment, provided you don’t fall into some scam and buy an item that will appreciate in value.
NFTs are difficult to value, especially when the market is in a speculative phase as it is at the moment. Only a few creators or projects will enter the digital artist elite, and the prices of many works could probably be affected by a retracement of the Ethereum price.
Complete guide to buying an NFT on OpenSea
Most of the NFT market is on the Ethereum blockchain, so the first thing to do is to set up a wallet that can interact with its network. An easy-to-use wallet that can be installed on smartphones and/or PCs is for example Eidoo, or Metamask.
Ethereum tokens come is different types. ERC-20 tokens are the most popular and are used by most Ethereum projects, while NFTs are created using the ERC-721 standard, which supports the uniqueness of the token and all the attributes of NFTs.
- Installing a wallet
To install the Eidoo wallet, search for it in your smartphone’s app store or go to eidoo.io to download the desktop version.
During installation, pay particular attention to saving the recovery phrase, which is essential to be able to restore the wallet if you change smartphones or devices.
The same thing can be said regaring Metamask, which it can be installed on your browser as an extension.
2. Purchasing ETH
After the installation, it is necessary to buy a sufficient amount of Ether (ETH) in order to be able to purchase the NFT you are interested in. Set yourself a budget or have a look at OpenSea to see what is the cost of what you are interested in.
If you already have an account with an exchange you can make a direct transfer to your wallet using the Ethereum deposit address.
3. Linking your Eidoo wallet to OpenSea
To create an account on OpenSea, simply connect an Ethereum wallet. Go to the opensea.io website and click on the avatar in the top right corner and choose “My Profile”.
The default choice is MetaMask, choose WalletConnect to connect your Eidoo.
On your smartphone click on the WalletConnect symbol in the top right corner and scan the QR code shown on your PC (full guide here). Accept the connection on your Eidoo and you will have created your own profile on OpenSea.
4. Choosing and buying your first NFT
Once your wallet has enough Ether to buy an NFT and cover the delivery costs you can go to our Pornvisory profile on Opensea from your PC and start looking for an artwork that interests you.
For each NFT there is the price, usually displayed in ETH, the scarcity in case it is issued in more than one copy, the sale price, current offers and the price trend.
You can also use the filters to find items that have active “Auctions”. Instead of buying these items immediately, you can place a bid (BID) hoping to be the highest bidder at the end of the auction.
If you find an NFT you like, click on “Buy now” to buy it immediately. You will need to sign 2 transactions to finalize the purchase, the first to “wrap” your ETH in wETH (the ERC-20 version of Ether) and the second to actually pay the seller of the NFT.
Keep in mind that in addition to the price in Ether or other cryptocurrencies (some NFTs are sold in USDC) you will also have to pay transaction fees, which right now are around 0.022 ETH, which at the current exchange rate is around 50 USD.
Once you have bought your first NFT, you can view it in the NFT section of the Eidoo wallet or on Metamask. If you would like to sell it one day, you can do so on OpenSea.io by going to your profile and choosing “Sell”, then selecting the price, the duration and the form of the offer.
Listing an item is free, but OpenSea charges a 2.5% commission on the final sale price if the NFT is successfully sold.