Things you need to know to start trading NFTs

There are millions of NFTs out there, and they come in all shapes and sizes to suit everyone’s preference. Not only can they be beautifully created and stunning to look at, but NFTs also provide profitable opportunities for many.

From art to collectibles and many more, NFT trading has become a lucrative industry, with resale prices that can really make your jaw drop.

Getting started

So you want to start collecting and trading NFTs and you don’t know where to start? Read the rest of the article to learn more about trading, and some of the things you need to know to start as a collector:

1. Understanding NFTs

The first thing when it comes to trading NFTs is to understand what NFTs are, and how they work etc. NFT stands for Non-fungible tokens, and there are different types of tokens on the blockchain. For example, Ethereum has ERC-721 tokens, which is also the token standard for minting and trading on the marketplace. But there are also other types of tokens that are semi-fungible, like the ERC-1155 token, often used for concert tickets or game items. The EIP-2892 is the newest to be rolled out, with other newer tokens like the EIP-2309 also becoming popular. The EIP-2309 tokens allow creators to mint as many NFTs as required in a single transaction. Apart from Ethereum, there are also other blockchains like Solana that have their own token standards, which we will get to later in this article. But as a beginner, understanding and knowing what NFTs are will benefit you in getting started as a collector.

2. Marketplaces

Dedicated marketplaces

In order to start trading, you need a dedicated marketplace to buy and sell your NFTs on. There are many NFT marketplaces available online, all with different features, benefits, and focuses. If you’re an art collector wanting to get into trading NFTs, finding a curated marketplace that’s more dedicated to trading art NFTs would make more sense than trying to find footing in a gaming NFT environment and vice versa. The Sotheby’s Metaverse marketplace is one such marketplace dedicated to specifically selling NFTs in the art space, Superrare is an invite-only marketplace, while dmarket is a marketplace dedicated to trading in-game NFTs, with plenty more around.

Open marketplaces

If you’re someone who is not sure yet what type of NFT you’d like to start trading, the best marketplace for you would be open marketplaces, where they sell every genre of NFT known to the world. Whether it is gaming NFTs, art NFTs, collectible avatar NFTs, and so on, you’d be able to find them on these marketplaces. Collectors on open marketplaces have a wider range of NFTs to choose from, with a wider pool of hidden gems to be discovered. The inclusivity and convenience of trading different types and genres of NFTs on open marketplaces are also unparalleled as compared to dedicated marketplaces, that only serve to cater to a curated audience.

3. Blockchain networks and cryptocurrencies

To start trading digital items like NFTs, you will need digital money. Digital money in the realm of NFTs is also known as cryptocurrency. Depending on the blockchain network you’re trading on, you will need one of these cryptocurrencies. Ethereum is the most common blockchain network for minting and trading NFTs, the currency for which is ETH. But there are other blockchain networks for which NFTs are minted and sold, like Solana(SOL) and Cardano (ADA), and marketplaces dedicated to NFTs on these networks.

You can think of trading NFTs in different cryptocurrencies and on different marketplaces much like spending in the real world. If you’re going to Mexico for a holiday, you’re definitely going to exchange your local currency for some Pesos in order for you to spend and purchase items there. Some countries accept more than one currency, while most don’t. The same goes for NFTs, if you’re trying to buy something on Ethereum with a currency other than ETH, it is likely that the transaction will fail.

4. Wallets

This last point in our article ties in with blockchain networks and cryptocurrencies. Now that you know what currency you need to start buying NFTs, you will need a wallet for your digital money. Just as in the real world, wallets are to hold the money you have. Depending on the marketplace, blockchain network, and cryptocurrency, there are different wallets for each. Metamask is the current most popular wallet for ETH, and the wallet that’s compatible with trading on the marketplace. Other wallets include Phantom for SOL, and Yoroi for ADA. If the digital wallet you’re using is compatible with the marketplace, it should be a simple process of connecting your wallet to your account on the platform to start minting, buying, and selling.

Find the wallet that’s suitable for you, read about the different types of wallets you can use to get started with trading NFTs here.