Key Guide to Collecting NFTS and How Auctions Work
Are you eager to understand NFTs and how NFT auctions work? Check out this ultimate guide to learn more about NFTs and how auctions work
After NFTs were developed in 2014, they've only gotten more popular. With more people understanding the world of cryptocurrencies, the movement towards NFTs is natural.
NFTs and NFT auctions can be confusing when you're entering the market space for the first time. But with a lot of money at stake, investing and selling NFTs is something you shouldn't wait to do.
What Are NFTs and How Do They Work?
NFT stands for non-fungible token. You can think of it as a distinctive trading card, but digital instead of physical.
These tokens are unique and irreplaceable. This is the biggest difference between NFTs and traditional cryptocurrencies like Bitcoin. One bitcoin can replace another, but one NFT cannot replace a different NFT.
The heart of NFTs is an ethereum blockchain. The Ethereum cryptocurrency can store information about the NFT, like who ones it and who bought it from who.
When you purchase an NFT, you receive ownership of the work. The artist still retains reproduction rights and copyright. It's like purchasing a Picasso or Pollock painting: only one person can own the original.
What Can Become an NFT?
Anything can become an NFT as long as it exists in a digital space. You can mint drawings, music, tweets, and more into NFTs. The ability for anything to become an NFT has opened up a financial opportunity for artists and creators who don't traditionally receive a lot of income from their work.
The images have to be minted to become NFTs. You can mint any digital item on Curios.com and turn any piece of art into an NFT on a variety of blockchains. However, you need to make sure you have rights to the original image.
If you want to do it yourself, simply sign up on Curios, choose what blockchain you want to interact in, and then upload your image and fill out all the descirption fields. Then your art will be stored as a smart contract on the blockchain that keeps track of who owns this particular NFT.
How do NFT Auctions Work?
If you want to sell at an NFT auction, the first thing you have to determine is the reserve price. This is the lowest amount of money you will accept for your NFT. Many auction sites will charge a 15% service fee, so remember to factor that into your price.
When listing an NFT for the first time, look at other NFTs to see what prices are like in the market for similar products. It can help to have a lower price point when you start to make the auction more accessible.
Once the price is set, you need to confirm that you want to list the NFT at auction. It can take a few minutes for the listing to confirm.
People will submit what they want to pay for the NFT, and the bidding will continue until the minimum price is hit. After hitting the minimum, a countdown will begin. Bidders will have until the end of the countdown to submit their bids and the highest bidder will receive the NFT.
The excitement and anticipation around bidding are what help drive up the price. Building a social media following to announce your auction drops will also increase the amount you get because more people are excited to bid.
What Can I Use to Pay for NFTs?
Traditionally, NFT auctions require you to bid on NFTs using ETH. NFTs are connected to ethereum blockchains, which is why ETH is the most common method used to pay for NFTs. With Curios technology, you can use virtually any cryptocurrency or fiat or even credit card to buy NFTs.
Using traditional payment methods can increase the number of bidders because it can make them more comfortable bidding.
What Happens After My Purchase?
After you make your first bid, keep an eye on the NFT auction! If you want it, you may have to make another bid if someone outbids you.
Once the auction closes, you will be notified if you won or not. Winning bidders will need to settle the NFT to confirm adding it to your NFT collection. Settling an NFT will take it out of circulation and send ETH to the creator.
If you are the seller, you do not need to settle the NFT. That is the responsibility of the winning bidder. If they are not settling the NFT quick enough, you can finish the transaction yourself.
The artwork will be showcased with the final selling price and can no longer be bid on. The more pieces you sell, the more excitement you build around your auctions. You can start raising prices and get more money for your images.
The Role of Social Media
Social media plays a huge role in NFT auctions. Creating a social media profile for your NFTs can make people aware that you have an auction coming up. Showing sneak peeks can make people excited and more likely to rush to your auction once the NFTs drop.
Twitter is one of the biggest platforms used to promote NFTs. You can quickly notify followers if bids are coming in, which can motivate bidders to make a move. Once a piece is sold, you can show off how much it sold to establish the value your work has.
As a buyer, you should celebrate successfully purchasing an NFT on social media as well. Similar to showing off collectible cards, displaying your NFT collection online can give you a sense of pride. The more unique ones you own, the better your collection looks to outsiders.
Start Your Own NFT Auction House Today
Going through a third-party NFT auction house can make you feel a lack of control throughout the bidding process. Instead of working with a third party, we recommend creating your own auction site with Curios. Creating your site to auction NFTs gives you control over the entire process, from minting to settling.
Curios is here to support the creation of your auction site. We make designing, implementing, and profiting off of your NFTs easy. Contact us today to launch your NFT marketplace!