NFT Domains enable people to locate a specific site on the internet. With easy-to-remember names, an NFT domain connects users online for whatever products or services they wish to find.
NFT domains are stored in public blockchains making crypto transactions easier by replacing the addresses of the digital wallets with names you can remember easily. By using their URLs for websites built through the InterPlanetary File System (IPFS), they also enable censorship resistance.
NFT domains are much like the traditional domain names with some important features like no registration fees, simple digital wallet addresses, and access to cryptocurrency, blockchain, and Web 3.0.
Reasons to buy NFT domains
Users are buying NFT domains in order to make their crypto transactions easier by replacing their digital wallet address with a more recognizable name. Also, NFT domains provide opportunities for profit from reselling them.
Their value is usually determined by two key factors, Utility, and Scarcity. Obviously, the more used and more unique domains shall have more value to the user.
Steps to buying NFT domains
If you wish to buy an NFT domain, you should follow a few simple steps:
- First, sign up for a marketplace;
- Set up your digital wallet;
- Put cryptocurrency into your wallet;
- Select an NFT;
- Finally, Complete the purchase;
After you have successfully purchased your first NFT domain, you have to mint it on a public blockchain. Some services allow creators to mint their domains free of charge, Unstoppable Domains is one of them.
However, not all platforms are free of charge for minting NFT domains. Additionally, you could be charged for transferring the NFT domain into a digital wallet, when creating a collection on a specific marketplace, or even when you list it for sale.
Steps to creating NFT domains
If you wish to create an NFT domain, you should follow a few simple steps:
- First, sign up in an NFT marketplace that allows minting domains;
- Come up with a name and search for availability;
- Select an extension, such as .crypto, .bitcoin, .eth., etc.;
- Make payment for the domain;
- Mint the domain on a public blockchain – you could use Ethereum or Polygon.
- Transfer it into your digital wallet;
- List if for sale – the platform will often provide instructions for it;
Buying and Selling for profit
Just like buying and selling tokens, you could also profit from selling domains. Just like with other assets. Buying low and selling high is the golden rule of investing in NFT domains. However, there are no guarantees, not all domains reach their potential value.
What are the risks?
- Security on the market. If you wish to store NFT domains on a marketplace, make sure you carefully read the security protocols of a custodial wallet. If offered, you should enable two-factor authentication.
- Scams are possible. Whenever you receive an email, support request, or embedded link claiming to be from the NFT marketplace, proceed with caution. You will never be asked for the personal information you haven’t already provided when signing up.
- You could lose money. The increase in the value of your NFT domain is not guaranteed and there’s no guarantee that it will remain the same.