NFTs, or Non-fungible tokens, are among the popular digital assets in the world of digital finance. For one, NFTs are advantageous for investors because it provides proof of ownership in the midst of a blockchain network. It is also an indivisible digital asset which means it cannot be divided among numerous individuals.
However, one cannot purchase NFTs without having to discern them thoroughly. There are things to consider before deciding to invest in these digital assets. Otherwise, the effort, time, and, more importantly, the money could be wasted. In this article, we will be enumerating the factors you need to examine first so that you avoid making bad investments in NFTs.
To further give a more in-depth idea about NFT, here are some of the things you should keep in mind before buying one.
- Know what you are buying.
Yes, it’s common knowledge that NFT can be anything in the form of art. However, it’s totally deeper than that. NFT is a unique digital work of art where every transaction made with it can be seen and recorded publicly.
- Always set a budget.
NFT can be an art that may look really simple, but it can be very expensive as well. This is why before you decide to purchase one, ensure that you are updated with current price points and set a budget. You can check trusted sources like NFT Price for this.
Do not impulsively spend because although it has been considered a digital investment, it’s also accompanied by risks. If you’re a newbie, start with purchasing smaller projects and always look for their potential return on investment. Don’t easily join the hype and end up buying mainstream and expensive ones.
- You should look for a legit platform.
There are tons of platforms when it comes to NFT. The number is very abundant on the internet, which is one of the main reasons you should be careful when choosing one. Make sure it’s credible and reliable. Look for a platform that can give you an overview of the latest updates of potential NFT projects. These kinds of information are very useful, especially when you’re new and having a hard time choosing what NFT to purchase first.
- Joining a community is a must.
Being surrounded by people with the same interests as you would be very helpful. It will most probably make your journey much easier. It is best to join a community as you can easily ask questions, raise concerns, and even ask for advice from people who already have experience. These communities can serve as your guide in every decision-making before purchasing an NFT.
- Always check the seller’s credibility.
Another notable tip. Before purchasing an NFT, always ensure to conduct background checks, not just with the NFT itself but especially with its seller. Look for their past transactions and reviews. Since NFTs have become mainstream, scammers can be anywhere. This is why you should be very careful with every transaction you make and only get in touch with sellers that has a history of successful NFTs in the past and is a part of a credible team with experience.
- Always consider the quality and rarity of an NFT.
When it comes to art, everyone has different preferences and tastes. Although you can still apply that when choosing your first NFT, remember that factors such as quality and rarity should always come first. Purchasing an NFT is not just meant for personal collection. Rather, it is an investment that you can make use of in the future. Quality and rare NFT collections are believed to gain a greater return on investment in longer periods. Remember, you’re using real money when buying an NFT, thus, you should be wise.
- Set up your cryptocurrency wallet.
Of course, you can’t proceed with any transactions if you don’t have an account or cryptocurrency wallet. Because aside from keeping your funds here, this will also serve as your digital identity when purchasing and sharing NFT projects.
- Check for verification marks.
Lastly, always check for verification marks. These are key indicators that you are dealing with a verified and legit seller with a notable history with NFT. Purchasing NFT from these sellers will ensure your money is secured, and you’ll surely get what you pay for.
Just like any other investment, NFT is also a risk. However, you’ll never know your luck if you don’t try. It’s undeniable that NFTs have helped hundreds of people achieve success just by taking risks in this field. There are tons of success stories and testimonies circulating on the internet. Just keep in mind that when you decide to enter this field, don’t get too overwhelmed, be wise, do your research, set your limits, and most especially, invest what you can only afford to lose. That way, you’ll never have regrets in the end.