How to Buy NFTs in the UK
NFTs (non-fungible tokens) are a growing trend in the UK, with over 800,000 Brits saying they own or trade NFTs. However, the UK lacks global NFT adoption, and many investors are uninformed about the process of acquiring these tokens. Therefore, we’ve created this guide to help our UK readers learn the ins and outs of NFT trading and ownership. We’ll cover how to buy your first NFT, where to store it, and the top NFT marketplaces.
What are NFTs?
Before we go into the process of buying NFTs, it’s important to understand how they work. NFTs are assets stored on the blockchain with unique metadata and identification codes, allowing them to be distinguished from one another. They have evolved from the ERC-721 standard to the ERC-1155 standard, which has reduced transaction and storage costs for NFTs.
NFTs are the ideal technology for ownership over digital and physical assets because the information is stored on the blockchain. Therefore, the asset cannot be tampered with, and you can see the NFT’s historical value. A few examples of where we can expect NFTs to become effective are event tickets, artwork, and real estate.
Top Platforms for Buying NFTs in the UK
NFT marketplaces are the main way of buying and trading NFTs. However, with so many options and different underlying blockchains powering the NFTs, selecting the best platform can be challenging. To save you time researching, we’ve put together this table showing the top NFT marketplace.
How to Buy an NFT
Buying an NFT can be an intimidating process, especially if it’s your first time. Here’s a step-by-guide to help you get started. For simplicity reasons, we’ll cover how to buy an NFT with OpenSea, the world's largest NFT marketplace.
Set up a Crypto Wallet
Before buying an NFT, you’ll need a crypto wallet. This is a piece of software that stores cryptocurrency and NFTs. However, not all wallets store NFTs and support OpenSea’s accepted cryptos. Therefore, you’ll need to find a wallet integrated with the NFT platform. MetaMask, Coinbase Wallet, and Phantom are a few brilliant options for OpenSea.
Once you have a crypto wallet with supported coins, connect it to the NFT platform by clicking the wallet icon. Then select the wallet you indent to use and log in.
Buying Fixed-Price NFTs
Next, decide which NFT you want to buy and click on its image to open the buying page. Add the NFT to your cart. Then click the cart icon at the upper right corner of the screen to initiate the purchase. Click “Complete Purchase”, and your crypto wallet will pop up, waiting on your confirmation to accept the transaction.
Buying Non-Fixed Price NFTs
Some NFTs are not fixed-price and let you compete with other investors by placing bids. Open the NFT buying page and press the “Make Offer” button. Next, pick the currency you’d like to use. Then input your bid value and expiration date. Finally, press “Make Offer” and sign the transaction in your wallet.
Pros and Cons of NFTs
NFTs have been around since 2014 but have only recently become popular due to virtual content, community, and available marketplaces. Therefore, many investors do not know the pros and cons associated with NFTs. Here are a few reasons to avoid or buy NFTs:
How Does an NFT Gain Value?
Once an NFT has been minted, the seller can set whatever price they want. Each collection will feature a floor price, the lowest value to buy one of the NFTs. Most NFT marketplaces will indicate the floor price beforehand, so you know roughly how much it will cost to invest.
A number of factors can go into an NFT gaining value, like the artist who created it, its use cases, popularity, and rarity. Moreover, NFTs can be traded between individuals, and the price can increase or decrease based on if the NFT is perceived to be gaining or losing value.
What Are the Top NFT Projects to Invest In?
CryptoPunks is one of the oldest and most popular NFT projects. In total, 10,000 CryptoPunks were minted in 2017. They feature 8-bit characters with unique hair, skin tone, and other characteristics. Due to the collection being one of the first, it has a huge following and value. The highest a CryptoPunk was sold for is 124,457 Ethereum.
Bored Ape Yacht Club
This NFT collection was created by Yuga Labs. It features 10,000 unique monkey pixel avatars that come with different attributes. Bored Ape Yacht Club is highly desirable because you can enter exclusive events and meetups just by owning one of the NFTs.
Axie Infinity is a great NFT project for those interested in crypto gaming. The aim of the game is to breed Axis with powerful attributes that you will take into battle. However, you can breed Axis to sell to other players or buy them yourself. Axie Infinity differentiates itself from most projects because it has a real use case. The game is a play-to-earn platform where gamers earn rewards as tokens or NFTs and it had 2.7 million daily users at its peak.
Should I Invest in NFTs?
NFTs are more tricky to invest in compared to cryptocurrencies and other assets because it’s difficult to determine the real value of an NFT. Also, NFTs are highly volatile, and there isn’t a guarantee you’ll make a profit. In fact, there have been many cases where investors buy expensive NFTs and cannot resell them due to no demand or intrinsic value.
However, NFT technology is promising, and we may eventually use it in our everyday lives. They are great for event tickets and fractional ownership, among other things. However, I wouldn’t recommend buying NFTs since the prices are too volatile, and there is a good chance you won’t be able to resell your NFT. Note: Not a Financial Advice (NFA).