A dollar is interchangeable with any other dollar, and the same is true for cryptocurrencies like bitcoin. But an NFT works differently. As with a rare postage stamp, a diary or a 1952 Topps #311 Mickey Mantle, its worth is tied to scarcity and proof of origin.
Almost anything can be minted as an NFT — CryptoPunks blockheads, short films, domain names, virtual cannabis farms — but most of the recent excitement among investors has centered on digital art, sports collectibles and video games where users build and govern alternate worlds or “metaverses.”
Today, most NFTs are purchased with ether (ETH), the native currency of the Ethereum network, which is easily converted to U.S. dollars on exchanges like Coinbase, Kraken and Gemini.
Unlike bitcoin, which functions mainly as a payment network and cryptocurrency, blockchain networks such as Ethereum and Solana let users build apps that can store personal data and set rules for complex financial transactions, like the smart contracts that govern NFT ownership and sales.
For artists, NFTs offer a new market where they can sell their work, and create an automated way to recoup a percentage of resales through royalty agreements. Investors who are bullish about the technology — a group that generally overlaps with cryptocurrency enthusiasts — see NFTs as a way to financially support artists, flex their digital art collections and speculate in a market experiencing staggering growth.
Just how fast is the market growing? In March, Fortune reported that the online marketplace OpenSea saw a 100-fold sales increase over the previous six months, including $95 million in digital objects sold in February, up from $8 million in January. And with venture capital pouring into the NFT economy from investors like Mark Cuban; Salesforce CEO Marc Benioff; and A16z Crypto, a subset of the venture capital firm Andreessen Horowitz, there’s reason to believe the NFT economy may be more than a fad.
Still, there have been multiple reports of theft and fraud. Fees and commissions vary widely, and the electricity needed to run the Ethereum network is a source of massive carbon emissions. Those entering the market should do so with eyes wide open, understanding that it’s important to assess marketplaces, including occasionally inconspicuous FAQs and service terms, with scrutiny.
Keeping all that in mind, if you’re wondering where to get started, here’s a look at 17 marketplaces and what they offer buyers and sellers.