Are you ready to purchase your first NFT art and dive into the world of digital assets? If so, then you’re in the right place.
Below, I’ll give you a full breakdown of the process and show you how to buy NFTs in Canada. The steps are:
- Sign Up For A Crypto Wallet
- Review & Join An NFT Marketplace
- Sign Up For An NFT Wallet
- Shop For NFTs On An NFT Marketplace
- Convert Fiat Currency Into Ethereum
- Purchase Your First NFT With ETH
I’ll break down each of these steps in further detail and explain the complexity of buying, selling, and trading NFTs and digital assets. Let’s dive in, shall we?
If you’re just getting started, then you’re likely wondering how to get started with purchasing NFTs in the first place. Before investing your hard-earned money in any asset, though, let’s take a quick look at what NFTs are and what makes them different from every other piece of digital art on the internet.
NFT stands for Non-Fungible Token.
Something that is non-fungible cannot be swapped or replicated, which gives it inherent value compared to the digital art you’ll find shared on social media or Google Images. The piece of art (the digital asset) is the token.
Other than the design of the digital art itself, what makes an NFT uniquely identifiable is the fact that it’s been assigned a hash code and verified on a public blockchain.
Even if somebody could replicate the art itself, the replica would easily be identified as a fake since its unique hash code can’t be replicated on the blockchain.
Non-fungible tokens are integrated with smart contracts, which clarify ownership specifics, the NFT’s location on the blockchain, and more.
On the surface level, an NFTs smart contract clearly identifies the owner of an NFT, so others can’t claim ownership.
However, other terms may also be written into an NFTs smart contract. For example, holders of exclusive NFTs may be given default access to special members-only clubs, events, and parties.
How To Buy NFTs In Canada: Step-by-Step
Now that you have a bit more background on what NFTs are and what sets them apart, here’s an easy, step-by-step guide on how to start investing in these crypto assets.
It may seem a bit complicated at first, but it’s relatively simple once you become familiarized with blockchain technology and set up your digital wallet.
Before entering the NFT space, you must register for a crypto wallet.
NFTs are typically purchased using cryptocurrency, meaning you’ll need to acquire some crypto before you start shopping for NFTs, similar to how you’d need to convert CAD to USD before you start shopping in New York City.
The easiest way to get started here is to sign up for a major crypto exchange such as:
When you create your account, you’ll be assigned a virtual crypto wallet by default. You’ll have a separate wallet address for each cryptocurrency that you hold. You can use this wallet address to send and receive cryptocurrency when you buy and sell NFTs.
If you’ve just signed up for the first time, you’ll need to link your personal bank account or debit card to convert your fiat money into crypto funds (more on that below).
Now that you have a crypto wallet set up, you’ll need to browse through NFT marketplaces to find one (or multiple) you want to sign up for and shop at.
Some of the top NFT marketplaces in Canada are:
- OpenSea (most widely used)
- Nifty Gateway (lets you buy NFTs with a credit card)
- Binance NFT Marketplace (although this is restricted in Ontario)
- Rarible (supports multiple blockchains)
- Axie Marketplace (for crypto gaming)
- SuperRare (good for hard-to-find NFTs)
Each NFT platform differs slightly from the next based on different factors, including:
- User experience: The user experience of an NFT marketplace can impact its overall usability and popularity. Consider factors such as ease of use, customer support, and user interface when choosing an NFT marketplace.
- User base: Some NFT marketplaces have larger user bases and higher trading volumes than others. Larger marketplaces may offer a wider selection of NFTs and more opportunities for buyers and sellers to connect.
- Types of NFTs: Different NFT marketplaces may specialize in different types of NFTs. For example, some marketplaces may focus on digital art, while others may specialize in collectible NFTs, such as in-game items or sports memorabilia.
- Payment options: Some NFT marketplaces may accept a wider range of payment options, including cryptocurrency, fiat currency, or credit cards. It is important to consider the payment options available on a given marketplace before purchasing.
- Listing and selling fees: Different NFT marketplaces may have different fees for listing and selling NFTs. Some marketplaces may charge a flat fee for each transaction, while others may charge a percentage of the sale price.
- Marketplace Reputation: The reputation of an NFT marketplace can impact its user base, trading volumes, and overall success. Research the reputation of a given marketplace before making a purchase or listing an NFT.
If you’re trying to buy a specific NFT, then you’ll want to do a bit of research to figure out which marketplace hosts the NFT that you’re interested in. Signing up for an NFT marketplace is relatively simple and only takes a few minutes, so it may be beneficial to register for multiple.
Before you start shopping for NFTs, you’ll need to set up an NFT wallet to store your NFT collection. These operate similarly to crypto wallets but are used to store NFTs and their associated smart contracts rather than pure digital currency.
Once you purchase your first NFT, you’ll send it to the wallet.
Some NFT marketplaces have a built-in NFT wallet, such as the Nifty Custodial Wallet. However, I recommend using a separate wallet for long-term storage, as it’s safer and more reliable.
Some of the most popular NFT wallets include:
- Metamask Wallet (download Metamask wallet here)
- Coinbase Wallet (off-exchange)
- Trust Wallet (mobile wallet powered by Binance)
Of these, the Metamask wallet is the most popular and versatile, which is why I usually recommend it to beginners.
The safest way, by far, to store your NFTs is in a hardware wallet. Often referred to as a hard wallet, a hardware wallet is a USB flash drive (hardware) that supports the storage of crypto assets such as NFTs and cryptocurrency.
The advantage of a hardware wallet is that its contents can never be hacked, stolen, or otherwise compromised. Accessing the hardware wallet requires the user to input a unique passcode that only they would know.
The one disadvantage of a hard wallet is that if you lose it… its contents can’t be recovered.
Now that you’ve got your wallets set up and you’re registered for an NFT platform, it’s time to start shopping for your first non-fungible token!
I recommend doing a bit of research on upcoming NFT projects and getting involved with something that fits your interests. YouTube is a good place to start your research.
You’ve likely heard of super-high-value NFT projects such as the Board Ape Yacht Club, which feature NFTs that cost $400,000 or more. However, there are plenty of other NFTs that can be purchased using fractional crypto for the equivalent of $30 or less.
If you’re new to buying NFTs, then I suggest going with something inexpensive to help you get acquainted with the process of buying NFT projects.
Once you find an NFT that you want to purchase, you’ll need to purchase crypto to use to buy NFTs.
Although some NFT marketplaces allow you to buy NFTs using your credit card, these represent the minority.
Most NFTs are purchased on the Ethereum blockchain network using Ethereum (ETH) – the default token used by the network.
This means you’ll want to buy crypto using fiat currency (presumably CAD if you live in Canada). Ethereum is the second-most popular cryptocurrency after Bitcoin and arguably the most-used crypto when it comes to buying and selling assets on the blockchain.
To purchase an NFT on the Ethereum blockchain, you’ll need to buy Ethereum with fiat and then use that ETH to purchase your NFT.
The asset you’re looking at on the NFT marketplace should have a clearly listed price in ETH. Some NFTs may be hosted on another blockchain network (such as Binance) and may require you to purchase another crypto token.
After the recent FTX scandal, I don’t recommend storing your crypto on an exchange-hosted wallet for the long term.
However, it’s fine for short-term transactions (like buying an NFT). If you have leftover crypto on your exchange-hosted wallet, I recommend transferring it to a hard wallet or self-hosted virtual wallet to keep it safe until you’re ready to use it again.
Now that your crypto is good to go, you’re ready to buy NFTs.
If you’re using a popular NFT marketplace like OpenSea, then you should be able to link your Coinbase wallet (or another wallet) directly to your marketplace account. This makes buying NFTs a lot easier, as you can buy the asset with the click of a button.
If you’re using a smaller NFT marketplace, you may need to copy and paste the hash code associated with your Ethereum wallet and make the purchase manually.
If you’re buying an NFT manually, it’s vital that you double-check to make sure that you’re using the correct wallet address. Once your funds have been sent, the transaction cannot be reversed.
Once the purchase has been initiated, your NFT should appear in your NFT marketplace account within a few minutes. From here, you can transfer your NFT to your designated NFT wallet for safe storage.
When you use blockchain technology, such as Ethereum, to send transactions or run smart contracts, you must pay for the computation and storage needed to process these operations. This payment is known as a “gas fee.”
These can vary daily, depending on how busy the Ethereum network is, the cost of the asset in question, and the current price of ETH.
Think of it like paying for the electricity and labour used to run a machine that processes your transaction. The more complex the operation, the more gas is required.
Gas fees are paid in ETH, the cryptocurrency that powers the Ethereum network. When you send a transaction, you specify the maximum amount of gas you’re willing to pay for the operation. Miners, who process the transactions, will choose the transactions with the highest gas prices to include in the next block.
The more gas you pay, the quicker your transaction will be processed. Many NFT platforms automate this to ensure smooth transactions for everybody.
In simple terms, gas fees are the costs you pay to use the Ethereum network to process your transactions or run your smart contracts.
If you came here after Googling, ‘how to buy NFTs in Canada,’ then it’s probably safe to say that you don’t know how to sell them either.
Selling an NFT on an NFT marketplace is a lot like listing an item for sale on eBay.
To list an NFT for sale, you’ll log into your NFT platform and select the ‘sell’ option. From here, you’ll transfer your NFT from your personal wallet onto the NFT exchange, which will serve as an escrow for the transaction.
You’ll list the NFT for however much (or little) you want. Before selling your NFT for a random price, I recommend doing a bit of research on what other NFTs in the same collection are selling for. This will give you a good baseline to start off with.
Once a buyer purchases the asset, the NFT platform will transfer the funds to your personal account and transfer the NFT to the buyer’s personal account.
Not too complicated, right?
Just as NFTs can be bought and sold like traditional assets, people can also trade NFT art.
Let’s just say that your friend has an NFT that you want to trade for one of your NFTs. Once you agree on the transaction, you can use an NFT platform like OpenSea to transfer ownership of the NFT to the other user in exchange for their NFT.
Now that you know a bit more about how to sell and buy NFTs, let’s take a look at how to find the best NFT art projects. If you’re like many people in the NFT space, you’re likely purchasing an NFT as a financial investment, hoping it will increase in value over the years.
- Disclaimer – NFTs are highly volatile and speculative, and there’s no guarantee that an asset will retain its value, much less an increase in value. Make sure you do your due diligence, research the NFT you’re trying to purchase and understand the risks associated with NFT trading.
With that in mind, here are some helpful tips to help you find the best upcoming NFT projects and potentially profitable investments.
First, you’ll want to research the NFT artists. NFT art produced by leading designers and popular artists is much more likely to hold its value compared to random one-off projects created by new artists.
As you analyze NFT projects, check if it’s part of a larger collection. If so, see the price floor (minimum) that other NFTs in the collection is selling for. This can be a good indicator of the NFT’s potential for success or failure.
If the NFT isn’t part of a collection, research the creator’s past NFT projects further. Try to find out how many previous NFTs they’ve produced have sold for.
The nice thing about the NFT marketplace is that it’s completely transparent, allowing users to view every transaction associated with the NFT. This allows you to see if the NFT has increased in value or gone down in value over time.
Whenever an NFT is first minted (created and launched on the blockchain), it can either be an individual project or might be one of multiple duplicates.
Although each duplicate has a unique hash code, the number of original copies often affects the NFT’s value, the same way that rare limited-production watches and cars may increase in value compared to those that are mass-produced.
If an NFT is one-of-five, it’s far more likely to increase in value than if it were one-of-fifty.
Before you invest a significant sum of money into an NFT, I recommend doing further research by joining the NFT’s Discord community.
This will give you a chance to network with other people who own NFTs in the project, view the NFT’s “roadmap” (if it’s part of a larger project), and get a feel for the legitimacy of the project as a whole.
Last but not least, you should also consider the current value of ETH compared to the dollar. This is especially true when looking at the NFT’s price history over time.
For example, an NFT selling for 1 ETH in late-2021 would be worth around $4,000. Today, an NFT selling for 1 ETH may only be worth $1,400 – $1,600, given the rapidly fluctuating nature of cryptocurrency.
To wrap things up, here are a few quick answers to some of the most pressing questions regarding NFTs and digital assets.
NFTs, like crypto, have no inherent value other than that which is placed on them by others.
Some of the most common factors that contribute to an NFT’s value include scarcity (how many of them are out there), who created it (are they famous?), and whether or not the NFT is associated with a larger project (such as an upcoming video game or movie).
The safest place to store an NFT is on a hardware wallet or “hard wallet,” such as the Ledger Nano device.
These are often referred to as “cold storage” since they’re not directly connected to the blockchain network and can’t be accessed through it. Just make sure that you keep your hardware wallet somewhere very safe so that it won’t be stolen or damaged.
OpenSea is, by far, the largest and most-used NFT marketplace in Canada and throughout the world. The platform has over a million users worldwide and processes over 50,000 transactions per day.
NFT Worlds is a blockchain gaming platform similar to Minecraft. In the game, players can purchase (and create) NFTs in the form of usable items that can be used, traded, or sold in the game.
All crypto assets, including NFTs, are subject to capital gains tax in Canada. Simply put, if you purchase an NFT and then sell it at a profit, 50% of your profits are subject to be added to your taxable income for that year.
However, your capital gains tax is balanced against your capital losses for that tax year, which can reduce your overall tax liability.
Like crypto, investing in NFTs is extremely risky.
There are plenty of “pump-and-dump” schemes out there promising big profits for everybody involved, only to pull the rug out and leave NFT holders with a valueless asset.
That being said, you can make money buying and selling NFTs if you’re willing to put in the hours of research trying to find the perfect project. Even then, though, nothing is guaranteed. Remember that all crypto transactions are final. Once you make a purchase, you can’t go back.
So think about where you’re investing your money.
If you’re looking for a more reliable way to make money online, be sure to check out these quick and easy online businesses to start in Canada!