How to buy NFTs in 2024 - a step-by-step guide for beginners

NFT is short for non-fungible tokens. They are crypto tokens that are not interchangeable with other similar ones. In the crypto-verse, value is captured and represented by coins and tokens. These tokens are either fungible or non-fungible. Fungible tokens can replace others of a similar nature and retain the same value. For example, 1 BTC mined in China is no different from a BTC mined in the UK. They are both BTC, and their value equates, so they can replace each other without skipping a beat. Non-fungible tokens are different.

Non-fungible tokens represent items that cannot replace other items of a similar nature. A good example is a plot of land. Land in China and the UK are not the same, even if they are the same size. In this scenario, land in the UK cannot be replaced or interchanged with the one in China.

Another key component of non-fungibility is scarcity. Because these items cannot easily be interchanged, owning them becomes more valuable. For example, if a piece of art cannot be replaced or interchanged with another, it is the only one that exists. This scarcity confers tremendous value on the item. Scarcity increases the value of paintings and art by prominent artists like Banksy or DaVinci. If thousands of copies of the Mona Lisa existed without a way to identify the original, it wouldn’t nearly be as valuable as it is today.

Unfortunately, in a digital world where rarity can be copy-pasted into oblivion, non-fungibility does not apply. Digital property can be copied and used, and the only way to retain its uniqueness is to prove its originality no matter how many copies exist. NFTs come in here.

NFTs prove that a digital file is the original, hence, the one with the value. NFTs also capture that value and represent it on the blockchain. For the first time since the creation of social media, pictures, videos, documents, designs, and other digital files retain their value in the public domain. This is why NFTs are so revolutionary.

At their core, NFTs capture the value of, validate, and enforce ownership of digital items. However, these functions can be applied in several ways, creating different types of NFTs based on functions and categories.

The major types of NFTs based on category are profile picture NFTs (pfp) which are the popular 10,000-piece collections centred around animals like Apes, Cats, or Dogs. Others include collectables, domain names, trading cards, and even entire virtual worlds.

Ethereum is the largest NFT ecosystem. To buy an NFT on Ethereum, you’ll need to get some ETH on an exchange and send it to a decentralised wallet. This guide walks you through a detailed process of buying NFTs.

Quick steps to buying NFTs

1. Buy Ethereum (ETH). Open an account with a crypto broker/exchange, fund your account, and buy some ETH. Use a broker that is secure, easy to use, and supports various funding methods. Brokers like eToro check all these boxes.
2. Get a non-custodial Ethereum wallet. Next, create a non-custodial or decentralised wallet. These wallets do not have accounts in the traditional sense. They place the responsibility of protecting and maintaining access to your funds in your hands.
3. Send your ETH to your new wallet. After buying ETH and creating a decentralised wallet, send the ETH to your wallet using your wallet address. You can send from the exchange by navigating to the Withdraw section and inputting your wallet address as the destination. 
4. Sign up for an NFT marketplace. Navigate to an NFT marketplace of your choice. OpenSea is a great starting point as it is currently the largest marketplace in crypto.
5. Connect your new wallet to your chosen NFT marketplace. NFT marketplaces usually have a Connect Wallet button at the top-right corner of the home page. Click on the button and sign the transaction from your wallet.
6. Buy your NFT. Explore the categories and the collections they hold or search for specific collections using the search bar. When you find the NFT you want, click on Buy Now and sign the charge in your wallet. Your NFT should appear in your wallet.

Step 1. Sign up to an exchange such as eToro and buy some Ethereum (ETH)

Sign up to eToro

Navigate to the eToro website and click on Start Investing. A signup page should load with inputs for your name, password, and email address. Alternatively, you can sign up with your Google or Facebook account.

Provide the necessary documentation

You need to be verified to access the full functionality of eToro. The required documents are usually a form of ID (a driver’s licence or national ID will do) and a proof of address, like a utility bill or a bank statement.

Buy Ethereum

eToro accepts deposits through bank transfers, credit cards, and electronic wallets like PayPal (depending on your geographic location). Once you fund your account, you can buy ETH on their exchange.

If you already have an account with another broker or you find using other exchanges easier, our comprehensive list will help you get started.

NFTs on Ethereum use a token standard called ERC-721. A token standard is a set of rules that tokens must follow to remain compatible with the rest of the blockchain. This standard governs how to create, issue, and transact with NFTs on Ethereum.

Table “limit 3” of Ethereum partners

Step 2: Download and install a Web3 wallet

A Web3 wallet is an application that allows you to interact with blockchain-based applications as well as store, send, and spend crypto coins and tokens. They usually come as browser extensions, desktop applications, or mobile apps.

Because the current version of the internet (Web2) is incompatible with blockchain dapps, regular browsers cannot natively browse dapps. There are several suitable Web3 wallets, but MetaMask is the most widely used and one of the most secure.

Our top five Web3 wallet picks!

Your Web3 wallet is vital to your NFT and crypto journey. You need one you can trust. Here are our top five picks.

MetaMask. The MetaMask wallet is the most widely used wallet because it is open-source, secure, and deeply integrated with Ethereum and EMV-compatible chains like Binance, Polygon, Avalanche, and many others. Its mobile app allows you to browse dapps and store NFTs on all connected blockchain networks.

Trust wallet. Trust wallet is a decentralised wallet compatible with Ethereum and the Binance Smart Chain. It also supports some major coins like Bitcoin, Ripple, and Polkadot. However, it only accepts ERC-20 and BEP-20 tokens and NFTs.

eToro wallet. eToro’s custom distributed ledger technology, called eToroX, facilitates their crypto operations and powers their crypto wallet. You can store coins and tokens from their exchange on the wallet.

Coinbase wallet. Coinbase’s decentralised wallet supports major cryptos like Bitcoin, Bitcoin Cash, Ethereum Classic, Litecoin, Shiba Inu and NFTs on the Ethereum network. The wallet also allows you to browse Ethereum dapps.

Ledger Nano S. The Ledger wallet is a hardware wallet that stores your private keys offline, making it incredibly difficult to hack. It supports several blockchain networks like Ethereum and EVM-compatible chains, Neo, Dash, and others. It also accepts ERC-721 NFTs.

How to download and install Web 3 Wallet

For this guide, we downloaded and set up the MetaMask wallet because it is the most popular wallet and our preferred choice. The MetaMask browser extension can’t store support NFTs, but the mobile version does, so we installed that one instead.

Navigate to the MetaMak website/app store

The MetaMask website automatically detects your browser and loads the supported version. The supported browsers are Chrome, Brave, Edge, and Firefox. You’ll also see the options to download IOS and Android versions. Alternatively, you can go to the Play Store or App Store and search for MetaMask. Ensure it is published by ConsenSys and click install.

Install Web3 wallet

After installation, launch the app and click on Get Started. You’ll either create a new wallet or import an existing one. To create a new wallet click on Create a new wallet, and accept the terms of services. It is always good practice to go through them first.

After accepting the terms of service, 24 randomly generated words will display on the screen. Write them down and keep them offline. These words, called your seed phrase, serve as a backdoor into your wallet. Anyone with your seed phrase has access to your wallet and can spend your funds. It is not advisable to store them on your phone, laptop, or a cloud storage service. Write them on a sheet of paper and keep it somewhere safe. You may want to create multiple copies and place them strategically in case you lose a copy.

The process of generating seed phrases is the same for both the browser extension and the mobile app.

Generate password

Before your seed phrase, you’ll need to create a password. Your password restricts wallet access to people who have it, which should only be you. Similar to how passwords on mobile phones work, you’ll need to enter them intermittently when surfing dapps.

Your password differs from your seed phrase in function and frequency of use. The seed phrase recovers your existing wallet on a new device in cases where the device you initially installed MetaMask on is unavailable. All things being equal, you shouldn’t use your seed phrase often.

The password, alternatively, is used to unlock the wallet before using it. You will use it often, so make sure you can remember it.

Confirm your secret backup phrase

After Creating a password and writing down your phrase, MetaMask will test that you wrote it down by asking you to enter them in the correct order. This test confirms that you wrote it down correctly.

Set Web3 wallet up on your mobile device

You can link your web wallet to your mobile wallet to gain access to the same wallet on both platforms. To do this, access the advanced settings on your web extension wallet and click on Sync with mobile. You should see a QR code. Scan it with your mobile device’s MetaMask wallet.

Unfortunately, at the time of writing, this feature has been suspended.

Step 3: Send some Ethereum from your exchange to your Web3 wallet

1. Copy Web3 wallet address

On your wallet, you should see your wallet address, an alphanumeric string starting with 0x. Click or tap on it to copy it. 

2. Select ‘withdraw’ on your exchange

Open your exchange account and select withdraw. A page should load containing input fields for a wallet address, a network, and the number of coins to send.

3. Paste the address into the exchange wallet

4. Select the correct network

There are several networks with various versions of the same cryptos. For example, ETH has a variant on the Polygon network. If you select the Polygon network when withdrawing to your wallet without already being connected to it, you may lose your funds. Ensure that the network you’re using on the wallet is the same one you select during withdrawals.

5. Choose the amount of Ethereum to send

Input the amount of ETH you want to send. It is advisable to send a small amount first to ensure the coins get to your wallet. You also need to pay attention to gas fees. Ethereum gas fees are currently quite expensive.

6. Complete the withdrawal process

After inputting all the details above, you’ll have to verify that it is really you trying to withdraw. You will receive two verification codes: one on your phone and one in your email. If you have an authenticator app set up, you’ll need to input the code from the authenticator.

7. Wait for the process to complete and check the Web3 wallet

Your funds should arrive in your wallet once the transaction has been processed and added to the blockchain. Occasionally, the network gets congested, delaying the transaction. In the meantime, you can check the transaction progress on etherscan.

Part 2: Where to buy NFTs

Step 1: Head to your preferred NFT marketplace

Every smart-contract-enabled blockchain has a major NFT marketplace. On Ethereum, it’s Opensea. However, there are several others, some more exclusive than others. Right now, the most popular marketplaces on Ethereum are Rarible, known for its community-centred approach and token, RARI. SuperRare, known for its exclusively curated art pieces, and Nifty Gateway, is known for its centralised but high-end structure.

Step 4: Connect your wallet to OpenSea

You should see a wallet icon at the top-right corner of the Opensea homepage. Select MetaMask from the options and sign the transaction in your wallet.

Step 5: Buy [NFT]

When you find an NFT you like, click on it to see if you can buy it immediately. If the NFT has a Buy Now button, you can buy it. If not, you’ll have to bid for it. Sign the transaction in your wallet to complete the buying process.

Where to store your NFTs

You have a few options for storing NFTs. The first is the MetaMask mobile app, the wallet we’ve been using all along. However, the safest place is a hardware wallet like Ledger. It is fully decentralised and compatible with Ethereum and EVM chains.

Link to hardware wallet partner table

Why buy NFTs

The main reason to buy NFTs right now is the potential for price appreciation. The NFT space is filled with stories of collections doubling, tripling, and even 10-xing in value within a relatively short period. Early collectors of such collections usually make impressive returns on their original investments.

The second reason to buy NFTs is their utility in games and crypto ecosystems like metaverses. While this space is still developing, investors are still willing to pay top-dollar for the future potential. For example, a plot of land on Sandbox, a popular metaverse on Ethereum, goes for about $2000. If Sandbox grows, this price may increase.

The third reason and probably the least known is access. The Bored Ape Yacht Club NFT also serves as a membership card into an exclusive club of A-list celebrities and even billionaires. Certain NFTs serve as membership badges for certain clubs and decentralised autonomous organisations (DAOs). These communities can create immense value.

What to look for when buying an NFT

Much of the NFT market runs on hype and speculation, nevertheless, there are fundamentals that all successful collections possess.

The first thing is value capture or utility. Successful NFTs capture the value of their community, are used in popular games or virtual worlds, or generate and maintain demand in some other way. The point is that its value comes from something tangible, not speculation.

Another thing to look out for is the track record of its creators. Community-oriented NFTs, like popular 10,000-piece collections, depend on their creators delivering on promises made in their roadmap. The more they deliver, the more value is placed on the community which reflects in the price of the NFTs. One-off art pieces also follow this rule. The more recognised the artist, the more expensive the NFT. Bored Ape Yacht Club is a great example. The creators consistently deliver and the community keeps gaining recognition. It also helps that they have celebrities in their community.

Conclusion

NFTs are tokens that cannot be replaced by other tokens of the same nature. They represent ownership of unique items on the blockchain and capture the value of digital properties. The Ethereum NFT ecosystem is currently the largest in crypto and a good place to start your journey

You’ll need a Web3 wallet to buy and store NFTs. The MetaMask mobile wallet is our preferred option, but you’re not limited to it. You can use others, just ensure that they are secure, open-source, and have a significant developer community. Also, remember to keep your seed phrase and your password safe.

Connect your wallet to a Marketplace of your choice to purchase NFTs. Opensea, Raribe, SuperRare, Nifty Gateway, Looks Rare, and NBA Top Shots are good places to start.

The NFT space is still in its infancy and can radically change with time. Popular collections may fall out of favour or the use case for NFTs may expand and change radically. A good example is the RMRK NFT standard on the Polkadot network that allows developers to create programmable NFTs that can own other NFTs.