NFTS, or non-fungible tokens, are tokens that mark ownership of virtual items. Those NFTs can range from digital images to event tickets to internet memes. One of the most important things to keep in mind, especially if you are new to the world of NFTs, is that these tokens are an investment. Just as you would conduct research into what kind of boat you might want to purchase or stocks you will invest in, you should also commit to doing your research before investing in NFTs. Here’s what you need to know about the NFT market in 2022
The NFT checklist for 2022
If you’re thinking about investing in cryptocurrency or NFTs in 2022, you need to understand what you’re investing your money in. Of course, you wouldn’t purchase a stock without thoroughly researching the company, so why treat NFTs any differently? Here’s a brief breakdown of how you should be thinking about entering the world of NFTs in 2022.
Cryptocurrency: Which will you invest in?
It can be overwhelming to decide what kind of cryptocurrency you want to invest in with so many cryptocurrencies. Bitcoin, one of the most popular – and expensive – cryptocurrencies on the market, has seen a skyrocket in valuation across the past ten years. You have probably heard of several other currencies, like DodgeCoin and StableCoins, but the primary crypto used to build NFTs is Ethereum (ETH).
Whether you want to invest in one crypto and purchase NFTs with the other is up to you. However, most marketplaces selling NFTs primarily use ETH, but will likely accept dozens of other cryptocurrencies.
Navigating the NFT market
Just as there are hundreds of types of cryptocurrencies, so, to do the markets selling NFTs reflect that diversity. There are so many kinds of NFT marketplaces that it can feel overwhelming.
The most important factor in entering the world of NFTs in 2022 is deciding what kind of NFT you want, and finding a marketplace that caters to your needs. For example, if you’re an online gamer, you’re going to look for NFTs in a different market than someone looking to collect digital fine art or sports memorabilia.
With some marketplaces being invitation-only and others, like OpenSea allowing artists to mint their work at relatively affordable prices, it’s truly up to you where you decide to link your virtual wallet and start investing.
Securing your currencies with a digital wallet
There’s no point in owning highly valuable cryptocurrency and digital assets if they can be stolen. Therefore, one of the most important parts of the NFT and crypto landscape is securing your money and assets. There are two main types of digital wallets broken down below.
Online virtual wallets
These are relatively common wallets and can include anything from browser extensions to mobile apps to desktop applications. Connected to the internet, these online virtual wallets can easily connect to sites and make purchases and transfers relatively effortlessly.
Cold storage virtual wallets
Online virtual wallets are more likely to be hacked or under attack because of 24/7 internet connectivity. One of the safest ways to protect your cryptocurrency and virtual assets is through an offline and external hard drive. Known as cold storage, this storage method is virtually impenetrable by hackers.
If the hardware is kept offline and on your person, there is no way to access it other than if it’s physically stolen. So the only real con to the cold storage method is that it needs to be attached to your divides and isn’t as readily accessible as a browser extension or a digital wallet that functions through a digital app.
Connecting your wallet to NFT marketplaces
Once your virtual wallet is connected, you can begin browsing on NFT marketplaces. You can’t purchase on an NFT marketplace without your virtual wallet connected, so be sure that when you are loading your virtual wallet with crypto, that is in a currency that is compatible with the NFTs being sold on your marketplace of choice. NFTs primarily use Ethereum (ETH) to be built and bought, but several marketplaces accept dozens of other forms of crypto payments.
The bottom line
Investing always has its risks, so why not diminish those risks as much as possible by making informed decisions? You now have an overview of NFTs, crypto, virtual wallets, and NFT marketplaces. It’s now up to you to decide what crypto you will invest in, discern which NFTs you are interested in purchasing, and what those acquisitions might do for your short- and long-term investment goals.
Story by Jacob Maslow
Read More: How to enter the world of NFTs in 2022