Non-Fungible Tokens (NFTs) have exploded in popularity recently. In 2021, we saw a large number of NFT projects appear and the world became hooked. Several NFT platforms were created in 2021 and more and more Canadians have invested in them. If you’re interested in buying NFTs, read on for our guide to buying NFTs in Canada.
What are NFTs?
NFT stands for non-fungible token. When we say non-fungible, we mean something that is unique and cannot be copied. Fungible means something that can be copied or divided up with each unit being equal to all other units. Cryptocurrency is fungible. Person A’s bitcoin is the exact same as Person B’s bitcoin. They are interchangeable with no differences.
An NFT on the other hand does not simply have the same value as another NFT. Each NFT is unique. You can create multiple copies of a single NFT, but this is the same as an artist releasing limited edition prints of their painting.
NFTs exist on the blockchain which means that the owner of the NFT can be publicly verified. If the blockchain shows that the NFT belongs to you, then no one can dispute or falsify that. Think of an NFT as a bit like a certificate of authenticity that cannot be doctored or destroyed.
When you think of NFTs as a certificate of authenticity, you can start to see the wider use cases for NFTs such as diplomas, tickets, or real estate.
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Are Crypto and NFTs the Same?
NFTs and crypto are not the same thing. Cryptocurrency is needed to buy NFTs in Canada. Think of an NFT as the painting and cryptocurrency as the money used to pay for it.
Further than this, a cryptocurrency token, or fungible token, created on the Ethereum network is known as an ERC-20 token. NFTs, or non-fungible tokens, created on Ethereum are ERC-721 tokens.
What Makes NFTs Valuable?
The rarity of NFTs make them valuable. As with any collectible item, the rarer your NFT, the more it is worth. Of course, NFTs are only worth what people are willing to pay for them.
CryptoPunks is a set of 10,000 NFTs that were randomly created by computer code on the Ethereum blockchain in 2017. Each of the NFTs have “traits” and some of these traits are rarer than others. For example, some of the CryptoPunks have hats and others don’t. Some have earrings and others don’t. No two CryptoPunks are alike. If only one of the 10,000 CryptoPunks had blue hair, for example, then that would be the rarest trait.
CryptoPunk #7523 was the third rarest of the collection and sold for $11.75 million in 2021. Other NFTs have sold for more. The artist known as Beeple had their “Everydays” collage NFT auctioned off at Christie’s and it sold for $69.3 million.
Canadian artist Micah Dowbak created a self-replicating NFT that creates new unique NFTs over time. It was auctioned at Phillips and sold for $4.1 million.
How to Buy NFTs in Canada?
To buy NFTs in Canada, you will need to purchase cryptocurrency. The crypto you need to purchase depends on the NFT marketplace you choose.
Step 1. Sign up to an exchange
First, sign up to a crypto exchange and verify your account in order to buy Ethereum. You can take a look at our recommended Canadian crypto exchanges here. There are several good choices. If you are looking for the one with the lowest fees then go ahead with Coinsmart. Their deposit fees are low and even free if you are depositing over $1999.
Step 2. Buy crypto
Once you have verified your account and funded it with Canadian dollars, you can purchase crypto. If you are just about to start your NFT adventure, probably buy Etherium. It is the most popular cryptocurrency to buy NFTs in 2024.
Step 3. Install Metamask wallet
Next, you will need a crypto wallet. A wallet will keep your crypto safe from theft and we recommend using a hardware crypto wallet if you are going to be making a large purchase. A hardware wallet will keep your crypto securly offline, so no one will be able to steal it.
In order to spend crypto at an NFT marketplace, you will need a wallet that can easily connect. We recommend using the Metamask wallet which you can easily add as an extension to your browser (Chrome, Brave etc). You can then connect your hardware wallet to your Metamask wallet. Any time you make a transaction using Metamask, you will need to sign the transaction on your physical hardware wallet.
Step 4. Send crypto to Metamask (or other crypto wallet you prefer)
Once you have your Metamask installed, send your Ethereum or other crypto that you need to your Metamask wallet. Ensure you have the correct wallet address for the network you are using. For example, if buying NFTs on Opensea, you will need Ethereum and you will need to connect Metamask to the Ethereum Network (Ethereum is already connected by default).
Step 5. Connect Metamask to the NFT Marketplace
Popular NFT Marketplaces for Canadians:
- Binance
- Opensea
Binance NFTs are not free but the network fees for buying NFTs on Binance are minimal. They will cost you a few dollars rather than a few hundred. To buy NFTs on Binance’s NFT marketplace you will need to use Binance coin (BNB), Binance USD (BUSD), or Ethereum. It is very easy to trade and sign up.
Opensea is the most popular NFT marketplace, but it can also be the most expensive. Most NFTs on Opensea are created on the Ethereum network. The Ethereum network has been heavily congested for a long time and it cannot cope with the amount of transactions that are being placed on it every second. As a consequence, the fees for transacting on Ethereum run into the hundreds of dollars all day long. The buying/selling process could be a little complicated for beginners.
Some NFTs on Opensea have been created on Polygon, which you can purchase without paying any network fees. However, you still need to first buy Ethereum and then you will need to bridge your Ethereum to the Polygon network in order to make a purchase. You can do this in Opensea with your Metamask wallet.
Other NFT marketplaces for Canadians include:
- Rarible
- NBA Top Shot
- Nifty Gateway
- Crypto.com
Rarible sells digital art and collectibles on the Ethereum, Flow and Tezos networks.
NBA TopShot sells licensed digital collectibles called “moments” to NBA fans. You can purchase an NBA moment by depositing crypto to your “Dapper Balance” on the NFT platform. You can do this with your credit or debit card or by depositing crypto including bitcoin, Ethereum, Bitcoin Cash, Dai, and USDC. NBA TopShot runs on the Flow blockchain.
Nifty Gateway sells digital art and collectibles without gas fees. You can buy NFTs on Nifty with a debit or credit card, your Gemini balance or with prepaid Ethereum.
Crypto.com offers digital art and digital collectibles but it is quite glitchy right now as it is still one of the newest NFT marketplaces. You can buy NFTs on crypto.com using a credit or debit card, your account balance or through crypto.com Pay which can connect to your Metamask wallet.
What is the Future of NFTs?
We think investing in NFTs is risky, but all crypto carries risk. Some people believe that the NFT art they purchase today will be worth much more in future, and others believe the NFT hype is already over.
The future of NFTs probably lies less in digital art and more in useful practice such as creating contracts, identity documents, ticketing and receipts. To have proof of ownership on the blockchain is the real future of NFTs.
Digital art and digital collectibles are the rage right now on NFT marketplaces and they don’t seem to be going anywhere.