How do NFT Marketplaces Work?
There are a lot of newcomers to the web3 space. Many people are being onboarded by peers, have felt the hype, and are ready to dive into this new technology. It can be very confusing finding your way in this space, especially if you don’t know where to start. In this blog, we will give you an overview of how NFT marketplaces work, how to use them, and what to expect. NFT marketplaces are where artist and creators mint their work on the blockchain. These marketplaces are essential hubs for traders, creators, collectors, and sellers. Let’s do a deep dive into where to start, what to expect, and the hardships that may come from being a beginner.
To begin your NFT journey, you’ll need to create an account on a crypto exchange, Coinbase being the most popular choice. Once you create that account, you’ll then download a crypto wallet, such as a Coinbase Wallet or Metamask. It is vital to understand the difference between the two. One interacts with the internet directly, and the other is an exchange to purchase various crypto assets. Coinbase Wallet and Metamask are web3 enabled, which means they have the ability to not only serve as a wallet but have internet capability. NFTs are minted using a few different blockchains, for example, Ethereum, Solona, and Tezos. To keep it simple, we’ll discuss Ethereum. Your first step is to purchase ETH on Coinbase and send it to your Coinbase wallet using the “Send ETH” address from Coinbase and “Receive ETH” address from your Coinbase Wallet. Once the asset is sent, you’re all set.
There are many NFT marketplaces, but today we’ll focus on Opensea. Head over to the internet browser on your Coinbase wallet app and go to the Opensea website.
The beautiful thing about web3 is that once you enter these Marketplaces, your account is already set up, and your wallet interacts directly with the website. You can change your name or remain anonymous. You can also change your profile picture, just like on Facebook or Instagram. You’ll find many accounts using their favorite NFT as their profile picture.
There are multiple categories for creators and collectors alike. If you’re a collector, you can begin to purchase at any time. If you’re a creator, there are a few steps you must take. First, you’ll have to choose what category your art will be in and set the description and the percentage of royalty you’d like to receive. Uploading your artwork is simple. Opensea has many file types they accept; choose one and upload it. Those that are minting for the first time must pay a one-time gas fee to proceed. Once you pay the fee, your art is now on the blockchain forever.
Gas fees are probably the single biggest hurdle for newcomers. You need to pay gas fees for almost everything. When a collector buys an NFT, they must pay a gas fee; if you want to raise the cost of your NFT, you must pay a gas fee, and if you’d like to send an NFT, it is the same. This can be disheartening for someone that is just starting off in the NFT space. The fees vary, and there are other blockchains besides ETH that have little to no gas fees. These fees can be crippling, sometimes more than what you’re purchasing. This is one of the reasons that people are looking for different options when minting or buying NFTs.
Once you mint or buy an NFT, it is stored in your digital wallet and can be sent to other digital wallets or cold storage wallets such as Ledgar. You can also send and receive NFTs, make trades, or send a gift. The top collections can be found on the home page. You can also search collections by name or category. These marketplaces also allow you to make an offer on NFTs. If an NFT price seems too high, you can make an offer and see if the seller accepts the bid. Auctions are also an option. You can set a base price and let collectors outbid one another.
NFT marketplaces are revolutionary in so many ways. They give artists and collectors the chance to interact directly with one another. It may seem complicated at first, but once you get the hang of it, you’ll enjoy the experience of buying, minting, collecting, and trading NFTs.