We have taken a look at what NFTs are, how they are different to cryptocurrencies and how they work. In this article, we are going to look at the NFT marketplaces, crypto wallets and how you can go about using NFT marketplaces.
So what exactly are NFT marketplaces? Well an NFT marketplace is basically a platform that can be used to store, advertise, create as well as exchange different NFTs. Some marketplaces are universal and cater for all kinds of NFTs whereas others can be specific to a certain asset such as, real estate, in game items, artwork etc.
In order to access a NFT marketplace, you require a crypto wallet. A crypto wallet needs to be built off and support the same blockchain as the NFT that you would like to buy. For example, if you want to buy and sell NFTs built on the Ethereum blockchain, you would need a wallet that supports Ethereum such as those offered by Coinbase. There are different types of wallets that one can use, these include hosted, non-custodial and hardware wallets. Hosted wallets are the most popular and easiest to set up. After purchasing a cryptocurrency it is automatically moved to your hosted wallet. A third party provider is in charge of hosting your wallet and keeping your cryptocurrencies safe. If you forget the password to your wallet you won’t lose access to it but unfortunately with hosted wallets you can’t really unleash the potential of crypto. Non-custodial wallets on the other hand, aren’t reliant on a third party provider, you manage your crypto yourself. Third parties will provide you with the software to store your crypto but you are responsible for keeping it safe and remembering the password. If someone discovers your password then your wallet will be left vulnerable. A benefit of non-custodial wallets is that they allow you to realise the potential of crypto and take advantage of all of its functionality. However, it is not as easy to buy and sell crypto as it is with hosted wallets. Hardware wallets are physical devices much like memory sticks that allow you to store your password offline. A benefit of this is that if your computer gets hacked your wallet is kept safe, however, hardware wallets can be complex and inconvenient to use.
Another requirement to access the NFT marketplace is that you have to have crypto in your wallet before you are able to buy NFTs and you can only buy from a marketplace that supports the blockchain that your wallet uses. You also require a user account to buy and sell NFTs which can be created on the marketplace.
When it comes to selling NFTs on the marketplace, you are required to upload the digital asset yourself and the platform will verify your asset before listing it as a sale. You set a price and then when you accept the offer for your digital asset the marketplace conducts the transfer from the seller to the buyer. Buying is a lot easier than selling in that NFTs are bought at a fixed price or bid for in an auction, you then submit offers and can negotiate a better price.
You can create your own NFTs to sell on a marketplace using various blockchains. Ethereum is one of the easiest and most popular blockchains to use for creating NFTs. All you need is a wallet and cryptocurrency, then you can start buying, selling and creating NFTs on various marketplaces, such as Opensea and Rarible.