NFT Marketplaces & Their Part in the Blockchain

Creation of a digital art object. Create of a Non Fungible Token

October 6, 2022

NFT marketplaces sound just like you’d imagine, as a place where you can buy, sell, and trade digital assets using Crypto. It is not a physical market in the sense that a buyer can touch and smell an asset. Indeed, it is a digital world home to any item that has been tokenized – from art and collectibles to real estate, anything of value.

Why is a Marketplace Important?

It’s commonly said that NFT marketplaces are the Amazon or eBay of digital assets. A person needs digital money to make a transaction in a digital market. Cryptocurrency is stored as digital money in a wallet. NFTs are also stored in wallets because they are digital assets. Trading and assets are both parts of the blockchain. The marketplace is important, just like local physical stores are important – they supply a place for everyone to buy, sell, trade, and display these digital assets. The benefit is that a third party is not needed to make a transaction – no bank, lawyer, or government entity is needed.

What to Know About Marketplaces

An NFT marketplace is essentially a web app where people can sell any digital asset they own while accepting payment via an Ethereum wallet address. Marketplaces are anonymous by design. An individual creates an account on an NFT marketplace without giving away any personal information such as name, address, email, or phone number. NFT marketplaces are decentralized and open source. Transaction fees are high and offers to buy and sell can be limited. The liquidity value is often low, and fraud can be an issue.

There are dozens of marketplaces for NFTs that cater to specific niches like gaming, sports, and entertainment. So, deciding which one is best for you might require a bit of research.

Read more here about the most popular NFT marketplaces available.

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