If you are among the curious ones who’d like to know what to look for when buying an NFT, then this article is here to give you the answers you’ll need.
Throughout 2020 and 2021, NFTs have become hugely popular assets in the blockchain system. NFTs have been known to be purchased with a huge amount of money, and this is why almost every single person aware of blockchain technology is venturing into it.
If you are looking to create your own NFTs, then check out this article on 6 iOS apps to create and sell NFTs on iPhone. If you are planning on buying an NFT from an online marketplace, then there are certain factors you’ll need to consider. So, what exactly should you look for before purchasing an NFT?
1. The Market Platform’s Transaction Fees
Transaction fees are common in some crypto exchanges and NFT marketplaces. These fees are charged when you buy or sell most digital assets.
You need to make yourself familiar with any existing fees on your chosen NFT marketplace before making any purchases. For example, OpenSea charges a 2.5% transaction fee for sellers, in which 2.5% of the sale value will go to OpenSea. This means buyers don’t need to pay any transaction fees. There are many other NFT marketplaces that implement this method, including Known Origin and Axie.
On the other hand, some platforms, like Rarible, charge a fee on both ends of the transaction. This means the buyer will also need to pay a fee on top of the NFT price per transaction.
2. Properties of the NFT
NFTs often come in the form of collections that have unique properties that distinguish them from the rest. For example, Bored Ape Yacht Club and other NFT collections consist of individual avatar NFT artworks that have different properties.
This is also a great way to confirm if the NFT you are about to purchase is legit. A lot of scam accounts upload photocopies of popular NFTs, but since they cannot replicate the properties, it makes it easier to spot.
3. Seller’s Verification
Just like the blue ticks on social media platforms, the majority of official sellers on NFT platforms such as OpenSea will have a blue verification tick next to their account name. This proves that they can be trusted and are definitely not a scam account.
You should also know that, just like on other platforms, you cannot use just the verification tick to check the legitimacy of an account. This is because a lot of legitimate NFT seller accounts don’t yet have their verification tick and this doesn’t mean they are a scam.
This is where you will be advised to check the NFT properties when transacting with an unverified account.
4. The Price Performance of the Seller’s Other NFTs
You need to look up the seller’s previous price history to know if your chosen NFT is a good investment or not. A look at an NFT seller’s changes in price will allow you to get a good idea of how the prices are fluctuating and whether they correlate with what you’d like to see in the future.
You can use insight platforms like NFT Stats and CoinMarketCap to get some interesting data on NFT sales, value, growth, and more.
The crypto space is still in its early stages, and although you can certainly make huge profits from buying and selling NFTs, there are still a lot of things that could go wrong while making purchasing decisions.
Just like many other online ventures, cybercriminals are currently taking advantage of the NFT industry. This is why buyers should always do their research before going ahead and making payments.
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