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There are several technologies enabling people to earn money on the internet. Recently, Non-fungible tokens (NFTs) have become quite popular. If you’ve heard or read information about NFTs, you may be interested in investing in them. However, it may be challenging as a beginner since you might not know much about this technology. For this reason, this article aims to help you understand what NFTs are and offer some helpful tips to start you off.
To begin with, an NFT is a cryptographic asset that exists on a blockchain. Usually, NFTs have dissimilar metadata and codes that differentiate them from one another. In contrast to cryptocurrencies, which are available in millions of identical units, NFTs can’t be reproduced. Rather, they’re only supplied as a single asset.
Also, NFTs are traded like other artistic pieces but can’t be exchanged, bought, or sold at equivalency like cryptocurrencies. Additionally, people can’t replicate NFTs. This is because blockchain technology helps to validate a unit’s uniqueness. Therefore, traders can easily identify duplicates.
Now that you’ve understood what NFTs are, you may be interested in investing in them. If so, here are some tips to help you out as a beginner:
#1 Only Buy From A Reliable Source
One can trade NFTs in traditional auction houses, private sales, or online marketplaces. If you’d like to buy NFTs in Australia or any other country, as a beginner, it’s advisable to start at online marketplaces. That said, ensure they’re reliable sources. First, find a reputable site. You can ask an experienced friend for a recommendation. Alternatively, some websites review NFT marketplaces, and these can offer great advice on the best sites to trade these digital assets.
In some cases, some NFT marketplaces only focus on one niche. For instance, some may only deal with a specific game, like basketball and the sport’s players. This way, the site attracts a specific customer base in large numbers. On the other hand, other sites have a larger volume of various assets in their catalog. Therefore, when buying your first NFT, identify a reputable source depending on the type of art you want.
It’s also best to look for marketplaces that offer NFT transaction security. A good site guarantees fraud protection, insurance, two-factor user authentication, and advanced encryption. Besides that, also consider a marketplace with affordable transaction fees.
#2 Beware Of NFT Scams
NFTs are relatively new compared to cryptocurrencies and other technologies. Also, they’ve become popular quite fast globally. One of the things about NFTs is that you may find many people profiting through the assets by scamming unsuspecting traders. It would, therefore, help to be cautious of these. Basically, if a deal sounds too good, it may not be.
Be careful of people offering NFTs at significantly low prices or offering them for free. This should apply whether you’ve spotted a potential vendor on social media, via email, or from a marketplace.
To identify an asset’s genuineness, determine how long the seller and the NFT they’re offering have been around. Additionally, establish if anyone else has purchased it before. Sharing information about the asset on social media or other platforms is also advisable. Someone may help you identify if it’s a legit project.
Furthermore, avoid sharing personal details like your bank or wallet information with anyone you don’t trust. You may be exposing yourself to theft.
#3 Only Purchase Your Favourite NFTs
When choosing an NFT to buy, it’s best to pick those you love or purchase from your favourite artist. This is because, though you may purchase the asset to make some profit, its price may drop. When this occurs, would you still want to own the NFT even with a decrease in value? Though it’s likely to focus on the profit potential of an NFT when buying it, most experienced traders will encourage you to pick assets you love.
This concept should also apply when you’re flipping—purchasing an NFT at a low price to sell it quickly for a profit—an asset. If you’d like to earn cash with NFTs by flipping them, it’s also best to pick the assets which are pleasant to you in terms of their concept, art, and presentation method. Therefore, stay alert for new NFT drops to spot the best ones.
Final Thoughts
NFTs have become quite popular today. You’ll find many people investing in them because they have great profit potential and will likely remain in the market for a long time. If you’d also like to start trading NFTs, you may not have the best start as a beginner if you don’t understand much about these assets.
This article could be quite helpful to you as a novice. You’ll learn what NFTs are. Also, you’ll find some tips to kick-start your journey. As advised in this piece, you should only buy NFTs from reliable sources, purchase assets you love, and be careful not to be scammed.