It would be hard to deny that 2021 saw the rise of NFTs, but will 2022 bye the downfall of NFTs? Projects such as CryptoPunks and Bored Ape Yacht Club made waves in the crypto community by generating millions in auction sales, and major companies such as Nike Inc. (NYSE: NKE) and Adidas AG (OTCMKTS: ADDYY) entered the space as well. However, NFTs are rarely expressed in terms of fiat currency, so many are unaware of how much they actually cost. This article takes a look at the prices of NFTs and what they mean.
What is An NFT?
The term NFT stands for non-fungible token. It is essentially a way to represent digital media on the blockchain in forms ranging from pictures to songs. By storing it on the blockchain, people can verify ownership of each NFT. The blockchain is unchangeable, so the record of an NFT and who owns it is 100% accurate and can be seen by anyone.
Owners of an NFT can use this feature to prove sole ownership. While the technology is mainly used for pictures now, many see other uses in areas such as real estate.
How Much do NFTs Cost?
Since NFTs have different creators and different use cases, their prices vary. However, most solid projects on the Ethereum chain sell for at least four figures. If an NFT is below this threshold, it is more of a gamble, as the demand is not as high as other projects. This being said, if an NFT collection has more than 10,000 NFTs in it, the price may be less due to high supply.
If $1,000+ is too high for you to afford, multiple alternative NFTs exist on other blockchains which may be more affordable. Solana and Polygon are both great options for less expensive NFTs with upside potential. Solana and Polygon are both designed to be Ethereum mainnet alternatives and may gain more popularity. These chains have less volume and offer cheaper NFTs.
The Best Cheap NFTs
Ethereum is currently the largest blockchain in the NFT space, but its high prices and gas fees may be a deterrent for some users. Many look towards Solana and Polygon as cheaper alternatives.
Proof of Beauty LONDON: Proof of Beauty (LONDON) is an NFT project based on the London Hard Fork of Ethereum. The NFTs themselves are physical representations of transactions on Ethereum. In February 2022, the cheapest Proof of Beauty NFT is selling for 0.03 ETH or about $90. There are multiple collections, including Proof of Beauty HASH, London Gifts, and London Embers.
Star Atlas Ships: Another relatively cheap project is Star Atlas. This project is a video game built on the Solana chain. The Solana chain is known for having virtually no fees, which allows prices to be much lower. The game hopes to combine AAA video game graphics with crypto through a huge space-themed universe that players will be able to explore. You can pick up a ship in Star Atlas for around $20.
SolShades Sunglasses: SolShades is a relatively new project on the Solana chain that allows users to connect NFTs, the metaverse and the physical world. When users own an NFT, they can use it in the metaverse through verified ownership. Additionally, the team has plans to give physical sunglasses to holders. You can pick up your own pair for around $60.
How to Buy An NFT?
Now that you are aware of the cost of NFTs and some cheaper alternatives, you may be interested in purchasing your own NFT. Fortunately, the process is fairly easy and only involves three short steps.
- Use a cryptocurrency exchange to buy Ethereum.
To purchase an NFT, you will need the funds to do so. Payment will be in the form of cryptocurrency and can be purchased on crypto trading platforms. While you can find many trading platforms, a few stand out because of low fees, ease of use and security.
Coinbase Global Inc. (NASDAQ: COIN), Voyager and Gemini are all great options for those looking to purchase cryptocurrency for an NFT. Setting up an account is fairly easy and typically only requires an email, basic personal information to verify your account and connection to your bank for funding.
With a verified and funded account on a trading platform, the next step is to purchase either Ethereum (ETH) or Solana (SOL). The currency you purchase will depend on the blockchain on which the project is built. This information can be found on the project’s website or Discord group.
Once you have found the blockchain of the project, you can purchase the correct cryptocurrency. To do so, navigate to the token’s page using the search feature and enter in the amount to purchase. Your token can then be found in your portfolio.
- Transfer your ETH to a cryptocurrency wallet.
It is not enough to have your tokens on a trading platform; you will need a wallet to connect your balance to NFT projects. Wallets give users discretion over their funds and are needed to purchase NFTs.
If you are on the Ethereum or Polygon chain, you can download MetaMask. On Solana, download Phantom Wallet. Once you have an account set up, you will be given a wallet address. This 64-character string holds the information associated with your wallet on the blockchain.
With your wallet and wallet address, head back to the trading platform. Go to either ETH or SOL and send it to your wallet using the send feature and your wallet address. It is often best to send a small amount first to verify that you have the correct information. Once you have verified that you can send crypto to your wallet, send the remaining amount.
- Make Your Purchase.
With your funded wallet, head over to an NFT trading platform. For Ethereum, the best are OpenSea, LooksRare and FTX. For Solana, use Solanart or SolSea. From there, you can connect your wallet to the exchange.
You can then begin browsing collections to find a project that suits your needs. Once you have found a suitable project, you can either bid on or directly buy the NFT. The prices can range from a few dollars to thousands, so it is best to do your research first and then buy using what you are comfortable spending.
Current Cryptocurrency and NFT Prices
The first month of 2022 saw a huge decline in the crypto markets. However, February brought a bit of momentum back and prices are slowly starting to crawl back. However, progress was short-lived as the depegging of Terra caused the entire crypto market to fall, forcing many tokens to start over completely and grow once again.
Are NFTs a Good Investment?
It is impossible to say that all NFTs are a good investment or a bad investment, as the space is crowded with thousands of projects and creators. Additionally, the overall state of the crypto markets can greatly impact the NFT space. However, you can pick through the projects and research to find the best ones to improve the quality of your investment.
Frequently Asked Questions
Are NFTs profitable?
NFTs can be profitable, but not all of them will be. You must invest with wisdom and understand when to sell NFTs to make a profit. Likewise, not all NFTs will sell for millions, and you must understand how Ethereum works if you wish to make money in this sector.
Are NFT investments safe?
NFT investments can be safe so long as you store them in a secure crypto wallet.
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