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Tips To Consider When Trading NFTs

Non-Fungible Tokens (NFTs) emerged and exploded in popularity in recent years and have become a huge part of mainstream society.

For those still catching up on this new craze, NFTs are digital files which are secured to ensure ownership while creating scarcity and value in specific types. They are like physical art and can be bought and sold by the artist or the owner.

Secured on blockchain technology, they are purchased through cryptocurrency and with their data stamps and smart contracts, are efficient to trade and incredibly hard to be fraudulently traded.

Many people, some with advanced understanding, as well as people learning this new world of technology will buy and sell NFTs everyday on an NFT marketplace.

It is important to understand how marketplaces work and the different forms of NFTs which are traded on each. Below are some top tips on buying and selling NFTs at a marketplace.

Know The Basics

You can always search out advice from people on social media and other blogs who share information on different artists. It is vital that while you look for NFTs that appeal to you, you become aware of who the artist is. 

Some will pay for advertisements on social media, so be aware of artificial buzz and reporting and compare their price data against others as well as sales volume. You can compare OpenSeas data with Etherscn transactions and follow previous buyers to ensure everything matches up.

Smart Contracts

Each sale is completed using a smart contract which will confirm the ownership of the NFT after the transaction occurs. By going through these in detail you are able to confirm you are buying/selling the correct NFT and the agreed ownership will be transferred on completion.

As a buyer, reach out to the owner for clarity on the smart contract and token ID to ensure everything matches with what you can see on the Chain Info section on the NFT page.

These contracts are set up to ensure safe and secure purchases of NFTs and can ensure what you want to buy is original and legitimate.

Social Media Accounts

If you are searching for an NFT from a specific artist, you should check their social media and personal websites to ensure that the NFT you are looking for is definitely created by them.

By sending a direct message you can confirm with the artist him/herself should you be purchasing from a third party and they can often provide a link to their collection of pieces. 

Reverse Google Image Searching

By using these reverse searches you are able to discover important information on the NFT, for example how long it has existed, how many image variants there are and much more.

It is a simple process by visiting and using the camera icon to input the image and receive full information on it.

Gas Fees

These fees compensate for the energy used in creating the NFT and made via Ethereum blockchain transactions. 

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You can set a limit on how much you are willing to spend on these to ensure you never pay a higher price than you are happy to. The fees for each NFT can go up and down as more or less transactions are made.

Many NFT artists will share information on their social media about gas fee advice, there is no need at all to pay for this information. 

Buy NFTs You Love

Finally, a bit of advice to reflect on. NFT trading can be prosperous but, especially for those new to the field, it can be volatile. When you are searching for NFTs and looking to invest, you need to consider what happens if it loses value? 

Not every NFT will continue to rise in value and it’s easy to think you’ll be able to trade your way to a tidy profit, but beware. In some instances you may not be able to sell your NFT for what you had planned so having one you care about is important.

This could be part of your collection for a long time or even permanently, you will want to ensure what you own is something you love and are happy having invested in it. Like art on your wall at home, this is art and something personal to enjoy.

The world of NFTs can appear incredibly complicated and technological for those who are yet to understand the vital details. 

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Its popularity has grown immensely in a short time and people who were not involved from the start are catching up with their understanding of the market, as well as the use of cryptocurrency.

Don’t dive in head first and hope for the best, there is so much information out there for newcomers to the industry, even for those looking to create their own NFTs. 

It is an industry set up to be transparent and clear, finding the right information before investing is possible and thoroughly explained, often in easy to understand language too.