Trading NFT

Buying your First NFT

It has become relatively simple today to buy an NFT.

 5 min

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Before proceeding with the purchase of your first, some steps are necessary:

  • Owning a compatible crypto wallet
  • Holding some crypto in it
  • Choosing the right NFT marketplace

We will explain in this chapter how to buy an NFT on the Ethereum blockchain using Metamask. Depending on the wallet, exchange, or marketplace some aspects of this tutorial may vary but the process will be very similar on other platforms.

Creating Your Crypto Wallet

Here is how to use Metamask as a reference for this step-by-step guide to properly create your wallet:

1. Go to Metamask download page.

Several versions of Metamask are proposed depending on the device you wish to install it on. Choose your preferred device and select “Install”. 

2. You will be redirected to the Metamask application page for your chosen device. 

Make sure you are on the authentic Metamask page. Please see the screenshot below as reference: 

  • Check the company name and look for the “verified pin” next to it, 
  • Check the number of reviews – it needs to be above 2.5K reviews as seen in the screenshot
  • Check the number of downloads – Metamask being a very popular platform, this number should be in the 10M+ users) 

Once you’re sure it’s the correct page, install Metamask on your device.

Metamask Chrome Plugin (compatible with Brave)
Metamask Chrome Plugin (compatible with Brave)

3. Create your new wallet

Creation of the new wallet using Metamask
Creation of the new wallet using Metamask

4. Create a strong password

Create a password to access your Metamask wallet
Create a password to access your Metamask wallet

A strong password contains at least 15 characters, including at least one uppercase letter, one number, and one special character. The longer it is the better!

5. Reveal your Seed Phrase (Backup Phrase) and keep it somewhere safe. 

Upon creating your wallet, Metamask assigns a seed phrase or backup phrase to it. This seed phrase is a series of words that will rarely be needed but are the ‘keys’ to your wallet.

Do NOT share your seed phrase with anyone!

If someone discovers your seed phrase, they’ll be able to access your wallet and all your assets

Revealing your seed phrase using Metamask
Revealing your seed phrase using Metamask

6. Write your seed phrase to the next page and you’re all set!

Metamask interface
Metamask interface

Now that your crypto wallet is created, it is now possible to interact with decentralized applications (Dapps) such as the NFT marketplace Decentraland. But to buy an NFT, you first need to buy some cryptocurrencies to cover the cost of the transaction.

Buying Cryptocurrencies

As we explained in the Fees chapter, in order to send transactions for buying or selling NFTs, minting them, or even creating new smart contracts, cryptocurrencies are needed. In this chapter, we will only focus on the two easiest methods to buy some ETH (Ethereum currency): buying from a centralized exchange platform or buying directly from Metamask.

With these two methods, you will be asked to follow the ‘Know Your Customer’ (KYC) procedure during your registration. You will be requested to provide an ID depending on the platform, this manual identity verification might last from a couple of days to a few weeks.

Buying from a Centralized Exchange (CEX)

Since the creation of Bitcoin, many centralized exchanges (CEX) have been created to buy cryptos with fiat currency. Today, the most used and secured exchanges are compliant with international regulations and can freeze accounts in case of malicious activity. 

Here are the three main Exchanges to buy your first cryptos using Credit Card or wire transfer:

During the registration process, you will be guided step-by-step to create and fund your account. Once you have traded the fiat for some Ether, it is time to withdraw them to your wallet. Open the Metamask plugin and click on your account name. 

Selection of a Metamask wallet address
Selection of a Metamask wallet address

This action allows you to copy the address that will receive the funds on the clipboard. Go back to the withdrawal page of the chosen CEX and paste the address when asked. Confirmation should be asked and the transfers usually take around 10 minutes.

Buying $ETH through Metamask

In 2021, Metamask and Wyre made it possible to buy $ETH directly through the wallet using a credit card. One year later, it is possible to use MoonPay, Transak and Apple Pay as well. To proceed, click on the ‘buy’ button.

Buying ETH with a credit card through Metamask
Buying ETH with a credit card through Metamask

Choose your provider and follow the registration process to proceed with the payment. Depending on the platform used and the amount of the transaction, the fees might vary. Also, some payment limits can occur depending on the ‘Know Your Customer’ (KYC) level put in place by the platform.

Using Wyre on Metamask to buy $ETH
Using Wyre on Metamask to buy $ETH

Once the transaction is complete, you will be redirected to a confirmation page and the $ETH should be transferred to your wallet shortly after.

Select an NFT Marketplace and Buy your First NFT

Once these steps are complete, all that remains to be done is to select your marketplace (if you’re not sure which one would suit your needs, you can read our rMost Popular NFT Marketplacesr chapter) choose the right NFT, and buy it.

Centralized vs Decentralized Marketplaces 

In its most decentralized version, the user can be fully responsible for every action, from creating a wallet to buying an NFT from a decentralized NFT marketplace. The user owns the private key of his wallet and can transfer the NFT.

Conversely, some marketplaces centralize everything. When creating an account with a login and password, the marketplace will generate a crypto address associated with the account. Owning crypto to buy an NFT will not be mandatory and the user will not have the opportunity to access the private keys of his wallet. The NFT marketplace will handle everything from A to Z.

Of course, there are in-betweens. For example, on Nifty Gateway, it is possible to buy an NFT directly with a credit card. To buy an NFT with crypto, a deposit on the wallet generated by the marketplace will be needed.
In order to sell the NFT on Nifty Gateway, a profile verification (the ‘Know Your Customer’ (KYC) process as mentioned above) will be required… and to sell the NFT on another marketplace, it will then be necessary to ’claim’ the NFT before taking out of the marketplace

Today, buying your first NFT has become very simple if the purchase takes place on centralized platforms like Binance, Crypto.com, FTX, and Coinbase NFT. If the purchase is done in a decentralized way, it will require a few more steps but will ensure you better control of your NFT.

Here again, the perfect balance between security, decentralization, and scalability has not yet been found. Each method of purchase has its advantages and disadvantages, a good indicator to determine your preferred method is to assess the retention time of your NFT

If you plan to hold your NFT for a long time, it’s preferred to focus on a decentralized marketplace that cares about the longevity of your asset (using IPFS and on-chain metadata hosting). If you plan to flip your NFT very quickly, a centralized exchange will be more suitable because it will have a lower fees and will be quicker to trade on it.

This work is licensed under a Creative Commons Attribution 4.0 International License.

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