{"id":125200,"date":"2022-07-23T17:36:29","date_gmt":"2022-07-23T21:36:29","guid":{"rendered":"https:\/\/rbach.net\/?p=125200"},"modified":"2022-07-23T18:21:38","modified_gmt":"2022-07-23T22:21:38","slug":"how-to-buy-a-non-fungible-token","status":"publish","type":"post","link":"https:\/\/rbach.net\/index.php\/how-to-buy-a-non-fungible-token\/","title":{"rendered":"How to Buy a Non-Fungible Token"},"content":{"rendered":"\r\n

\"How<\/a>CNN<\/a> reports<\/a> that a new record price<\/strong> was paid for bottle of Champagne<\/strong>. The bubbly sold at auction for $2.5 million, making it the most expensive bottle of wine ever sold. The record setting magnum of Chateau Avenue Foch, 2017, comes with a bonus. For $2.6 million<\/strong> the owners also got a single non-fungible token<\/strong> (NFT). The NFT is for the rights to an image of “Bored Ape Mutant<\/a>” and other cartoon figures that decorate the bottle.<\/p>\r\n

What is a non-fungible token<\/h3>\r\n

\"WhatNon-fungible tokens (NFTs) are the latest cryptocurrency phenomenon<\/strong> to go mainstream. NFTs<\/a> claim to transform digital works of art and other collectibles into one-of-a-kind, verifiable assets that can be traded on the blockchain<\/strong>. Sales of NFTs have been driven by celebrity endorsements, Online characeters like Elon Musk<\/a> and Lindsay Lohan<\/a> have pushed the NFT market to $41 billion in sales to 2021<\/strong>.<\/p>\r\n

Non-fungible tokens are cryptographic assets on a blockchain with unique identification codes and metadata. These traits distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency. This differs from fungible tokens like cryptocurrencies, which are identical to each other and, can serve as a medium for commercial transactions.<\/p>\r\n

How to Buy NFTs<\/h3>\r\n

\"How<\/a>To get into the highly speculative<\/strong> non-fungible token market<\/strong>, you will need to do some work before you can own an NFT.<\/p>\r\n

    \r\n
  1. Set up a digital wallet<\/a> <\/strong>that allows you to store NFTs and cryptocurrencies.
    2. Purchase some cryptocurrency<\/strong>.     Eth<\/strong><\/a>,\u00a0on the Ethereum network<\/a> is the most popular<\/a> cryptocurrency to buy NFTs. You can buy cryptocurrency using a credit card on platforms like Coinbase<\/a><\/strong> or PayPal<\/a>.
    3. Move your cryptocurrency from the exchange to your wallet.
    3. Start shopping at non-fungible token marketplaces<\/strong>. NFT marketplaces are platforms that host thousands of non-fungible tokens creators and collectors.<\/li>\r\n<\/ol>\r\n

    NFT marketplaces<\/h3>\r\n

    Foundation<\/a><\/strong> is a community-curated marketplace. It requires non-fungible token creators to be invited by other creators who are already part of the platform.\u00a0<\/p>\r\n

    Nifty Gateway<\/a><\/strong> is an non-fungible token marketplace with plans “to make NFTs accessible to everyone.” They work with big-name brands, athletes, and creators to create limited-edition digital art collections exclusive to the platform.<\/p>\r\n

    OpenSea.io<\/a><\/strong> is one of the first NFT marketplaces. It bills itself as\u00a0 the “largest NFT marketplace.”<\/span><\/p>\r\n

    Rarible<\/a><\/strong> is a community-owned non-fungible token marketplace.\u00a0 The platform focuses on art assets. It uses the RARI cryptocurrency<\/a> issued on the platform.<\/p>\r\n

    The high profile NFT craze is attracting scammers<\/a>. Some may try to sell you an<\/em><\/strong> non-fungible token when it’s not. Others may claim they have the right to sell an NFT they don’t own and didn’t create. <\/em><\/strong><\/p>\r\n

    You have been warned.<\/em><\/strong><\/p>\r\n


    Rb-<\/strong><\/em>
    CNN reports that the Champagne was bought by Italian\u00a0 cryptocurrency speculators. Despite their crypto profile, the purchase was made in dollars due to the recent     cryptocurrency implosion<\/a>.<\/em>\u00a0The price<\/a> of a Bored Ape Yacht Club token<\/a> has fallen. The price fell from an all-time high in April 2022 of 153 eth ($163,000), to 75 ethereum in May 2022.<\/em><\/p>\r\n

    Remember that the value of a non-fungible token is based entirely on what someone else is willing to pay for it<\/strong>. Therefore, demand will drive the price rather than fundamental, technical or economic indicators, which drive stock prices and investor demand.<\/em><\/p>\r\n

    Even if you buy a non-fungible token winner worth millions, Forbes<\/a> warns<\/a> that NFTs are subject to capital gains taxes. <\/strong>NFTs are taxable just like when you sell stocks at a profit. Since they\u2019re considered collectibles, they may not receive the preferential long-term capital gains rates stocks do and may even be taxed at a higher collectibles tax rate.\u00a0<\/em><\/p>\r\n

    The cryptocurrencies used to purchase the NFT may also be taxed<\/strong> if they\u2019ve increased in value since you bought them. This means you may want to check in with a tax professional when considering adding NFTs to your portfolio.<\/em><\/p>\r\n

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