NFTs are hot. I mean smoking hot! Bored Apes, like the one in the featured image above, have sold for hundreds of thousands of dollars, or even millions of dollars. The same goes for CryptoPunks, CryptoKitties, and a wide range of other NFT collections.
With the popularity of these digital collectibles climbing, and the holiday season upon us, it only makes sense that these tokens will prove to be a big hit among the technology enthusiasts in your life. But how exactly do you go about giving an NFT as a gift? Here’s a step-by-step guide:
Step #1: Sign Up for a Cryptocurrency Wallet
While there have been a few NFTs that consumers have been able to buy with good old fashioned fiat, the vast majority of these digital collectibles can only be purchased using ether, the cryptocurrency that lives on the ethereum blockchain.
The reason is simple, the vast majority of NFTs available today live on the ethereum blockchain.
Moreover, since NFTs are tokens that live on the blockchain, just like cryptocurrencies, you’ll have to have a wallet to store them in once they’re purchased.
There are several different cryptocurrency wallet providers. Some of the most trusted providers include:
- Trezor Model T. Note, this is a physical wallet that you can purchase on popular eCommerce websites like Amazon.com.
Step #2: Fund Your Wallet
Next, you’ll need ether in order to buy an NFT. So, you’ll need to fund your wallet. With most providers, this process is as simple as attaching your bank account and delegating a certain amount of funds to convert into ether.
There are plenty of NFTs out there that are relatively inexpensive. So, don’t worry about funding your wallet with thousands of dollars. In most cases, $250 worth of ETH will be enough to make a purchase, covering all fees involved.
Also, before your ETH can be used to purchase an NFT, your funds will have to clear your account. This process can take up to a week.
Step #3: Search for the NFT You’ll Purchase
This is the fun part. It’s time to do a little research to see what NFT Projects to get behind. After all, you don’t want to give your friend or family member a token that has little chance of becoming anything of value.
We’ve written an in-depth guide on choosing the best NFT projects to back. While you wait for your funds to clear and your ETH to be able to be used for the purchase of a token, read the article and look for quality projects to get behind. When it’s time to buy your token, you’ll know what you’re looking for.
Step #4: Buy the NFT
Next, it’s time to actually purchase the NFT you’re interested in giving as a gift. You can do so through various marketplaces, but the most popular online today is OpenSea. Simply search for NFTs that are part of the project you’ve chosen and pick the one you’d like to purchase.
Once you’ve chosen the NFT you’d like to purchase, you’ll need to do one of two things:
- Make an Offer. Most tokens are sold through an auction-like process, much like you see on eBay. Simply make an offer based on what you believe the NFT is worth, making sure that the offer is larger than the last offer the owner received (you’ll be able to see this on OpenSea) and wait for a response. If the owner accepts the offer, complete the transaction and purchase the NFT. If not, either increase your offer, or consider finding another token to purchase.
- Buy Now. Some owners will put their tokens up for sale using a buy now function. These sellers aren’t interested in the auction process. Instead, they set an amount of ETH they’d like to receive to sell their art and the first person willing to pay the price gets the art. If the NFT you’re interested in has a buy now option, simply purchase it by paying the amount of ETH the seller requests.
Step #5: Transfer Ownership of the NFT
Finally, it’s time to transfer the ownership of the NFT you’re gifting from your wallet to the person’s wallet that you’re giving the gift to. This will happen in one of two ways:
- Your Recipient Knows the Gift Is Coming. If the recipient of the gift knows the gift is coming, and already has a cryptocurrency wallet, simply ask them for their wallet ID. From there, you’ll go into your wallet, click the NFT, and choose the option to transfer to another wallet. Key in your recipient’s wallet ID and complete the transaction.
- Your Recipient Has No Idea. You want the NFT to be a surprise, do you? That’s simple as well. Just create another NFT wallet (Step #1) for your recipient. You won’t need to fund this wallet with ETH, you just need to set it up. Once the wallet is set up, go back to your wallet and transfer the token to the new wallet ID.
Pro Tip. When transferring NFTs, you’ll have to pay gas fees. These fees cover the costs associated with adjusting blocks in the blockchain. Gas fees are highly dependent on volume and can be quite expensive during high traffic times when demand for transactions is peaking. To save money on gas fees, make the transfer in the early morning hours of weekdays. During these times, the industry is pretty quiet, reducing demand and ultimately the price you pay to transfer.
The Bottom Line
There you have it. If you plan on giving a digital artifact representing a state of the art technology that will lead to a pivotal shift in how we see the internet and digital ownership, an NFT is the perfect way to go. Using the steps above, you’ll have everything you need to give the gift of digital art to your loved ones this holiday season.