Non-fungible tokens, or NFTs, have made much noise lately, especially after the sale of digital assets for millions of dollars. NFTs are digital tokens created or minted on a blockchain. These tokens are different from cryptocurrencies because each unique token has an exceptional value.
NFT is a work of art; its distinguishing trait is its uniqueness. Every creation has an original aspect.
Although people on the web want to give a shot at NFTs, there is a lack of appropriate knowledge. In addition, not everyone knows how to buy NFTs, they also don’t know about crypto tax reports and how these digital assets have begun to move. Therefore, one should consider some vital aspects before entering the NFT business to ensure security from unforeseen circumstances, such as NFT fraud. In his article, we have covered some critical factors that can help you achieve steady and secure navigation in the NFT space.
Who created the artwork?
First things first, it is crucial to identify who created the artwork you’re buying. In other words, you should know who is responsible for creating it, their background, how long they’ve been active in the space, how many NFTs have been sold, and whether or not there are any complaints against them. You should also look at a creator’s website to see if they have an About page or similar information that might help you better understand their background. If there aren’t any websites available yet, look at their social media presence; often, creators will use Twitter or Instagram to promote their work, so these can be good places to start your investigation!
How Does It Look?
The first thing you should think about is how the artwork looks. Does the artwork look like a real-world painting or sculpture? Is it in style? Would you be proud to hang it on your wall, or will it look out of place?
If the answer to these questions is “no,” don’t buy it. Your NFT purchase should be something that makes you happy and proud—not something that causes stress when people ask about its meaning and value.
The Usage of The Artwork
This is probably the most important aspect of an NFT to consider. What does it look like? Is it a piece of furniture? A car? An accessory for your phone? How many people will see it, and how often will they use it? The more usage, the more valuable an asset becomes over time and, therefore, more likely to be a good investment.
Buy It from Credible Sources
Buyers must only purchase NFTs from trustworthy markets. “Buyers should select reputable NFT marketplaces such as SuperRare, OpenSea, LooksRare, Rarible, Nifty Gateway, X2Y2, and others.” “These platforms incorporate social audit features such as linking to the project’s website, Twitter, or Discord,” noted Darshan Bathija, CEO & Co-Founder of Vauld.
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Check the Artist Portfolio
Does the interested artist have a portfolio? Do they have a website? Does the interested artist have social media presence (e.g., Instagram, Twitter, Facebook)?
Since NFTs are digital assets, checking if an artist has an online presence is important. This will help you gauge how experienced they are in this field and whether or not their work is worth buying.
The first thing you should look at when evaluating the rarity of an NFT is how many copies there are in circulation. The next thing is to look at how many are out there in private collections, public collections, and museums.
For example, if you find a piece of art with only one copy in circulation and the artist only has one copy, this will be very rare!
Know The Artist and Their Context
For many people, the artist is a significant part of the NFT. They want to be able to identify with the artist or admire their work and consider them an idol. If you are one of these people, you must understand more about the artist than their name and face. For example:
- What kind of work do they typically create?
- What influences affect their style?
- How much experience do they have in creating this type of art?
- Do they have an educational background in art?
- Is there anything else about their background that might be relevant for understanding or appreciating their creative process?
Experts also assert that buyers should see the number of transactions, community size, whether the publisher is authentic, floor price, and aspirational value, among other factors.
The Bottom Line
NFTs are just like any other type of art: they are a matter of taste and personal preference. The most important thing to remember when considering whether or not to buy one is that you need to know what you’re buying into, both figuratively and literally. So, take your time, ask questions and ensure you’re comfortable with all aspects of the artwork before committing yourself financially.