Ready to buy your first NFT, but have no idea where to start? Well, then start here:
- Have your KYC documents ready: In order to buy cryptocurrency, and even to open an account on some NFT websites, you will be required to submit KYC documentation. KYC is an old banking term which means “Know Your Customer”. Generally, they are going to ask for a high quality scan/picture of your driver’s license, both front and back. Save these files on your computer for quick access. Some websites will also require you to take a selfie using your webcam.
- Get some crypto: Most all NFTs will accept cryptocurrencies as a form of payment. It is rare that an NFT website accepts a credit card (with NBA’s Top Shot being one of these). Thus, you are going to need some cryptocurrency. If you want the simplest and easiest to use website, check out Coinbase.com. If you want to save on fees and want a more powerful trading experience, check out Kraken.com. You will need to sign up, likely go through KYC (step #1 above), and ultimately fund your account with fiat. Coinbase and Kraken accept ACH transfers, wires, etc. The big question is then: which cryptocurrency to purchase? The OG NFTs were built on Ethereum, with competing blockchains springing up to try to improve on Ethereum (E.g., NBA’s Top Shot is built on a cryptocurrency called Flow). Thus, we recommend picking up some Ethereum to start. Note, you have to pay a transaction fee everytime you send Ethereum. So if you plan on spending $100 on an NFT, you are going to need more than $100 worth of Ethereum to afford the transaction costs.
- Set up Metamask: We recommend using Metamask to actually interact with NFT websites. Metamask is a chrome browser plugin that lets you send cryptocurrency and “link” your Ethereum address to websites. Download and install metamask, then try to fund your Metamask account with a small amount of Ethereum from your Coinbase/Kraken wallet. We recommend starting with a small test amount, before sending larger amounts (See #4 below). Ethereum transactions generally take <5 minutes to process and be sent.
- Send a small test amount: There are no take-backs in crypto: If you see an erroneous charge on your credit card, you can call your bank and they will fix it. This is not how it works in cryptocurrency. If you send your cryptocurrency to the wrong address, it is gone forever. Thus, it is best practice to always start by sending a small test amount.
- Sign up for OpenSea: OpenSea is the current leader and a sort of “Ebay for NFTs”. You can link your Metmask with OpenSea to automatically see all of your NFTs (and thus be able to sell/buy NFTs).
- Earn passive yield by staking (Advanced): Once you become comfortable with all of the above, you can then begin to dabble in other cryptocurrencies on Coinbase and Kraken. Some of these cryptocurrencies allow “Staking”, which rewards you for locking up your cryptocurrencies. This would then allow you to hold crypto on Coinbase/Kraken and earn a yield, but then still be able to quickly switch to a different cryptocurrency to buy an NFT. It is easy to experiment with cryptocurrencies in very small amounts (mere cents), so take the time to poke around!