How to Buy NFTs in Canada
The Ultimate Guide to NFTs for Canadians
It’s 2021, and whether you’ve been on Tiktok, or reading the news, there’s a good chance you’ve heard about NFTs by now. In this guide, we’ll explore a few things:
- What are NFTs?
- What makes NFTs valuable (or not)?
- What not to do (Warnings and things to watch out for)
- How can I buy and sell NFTs in Canada?
- Where Can I Buy & Sell NFTs in Canada?
- What are gas fees?
- What kinds of NFTs should I consider buying/selling?
Sound good? Alright, hop on the train and let’s go for a ride and learn about NFTs.
What are NFTs?
NFT stands for “Non-Fungible Token”, which I’m sure you’ve read a bunch of times by now. But what does that actually mean?
It essentially means that it is a digital asset that is unique, and not equal to any other. “Fungible” means interchangeable. So here are some easy examples to help you understand.
Fungible Asset Example
If you have a looney (or a $1 bill for our American friends), and I have a looney. We could exchange them because they have the exact same value. They are “fungible” (ie: interchangeable). This is the same for any form of fiat currency (as well as cryptocurrencies such as Bitcoin).
Non-Fungible Asset Examples
With certain other things, it might not be the same. Let’s take for example baseball cards, Pokemon cards, or artwork. Here are a few examples:
- Pokemon Cards
An original print holographic Charizard card is significantly more valuable than a more common Pokemon card you’ll find in a pack you bought from Dollarama. - Hockey/Baseball Cards
A 1963 Pete Rose rookie baseball card is more valuable than a José Bautista rookie card. - Artwork
The original Mona Lisa is more valuable than the painting I drew last year during a paint night. Both are paintings. But nobody wants my crap. 😭
In each of these examples, both of the assets are the same (both Pokemon cards, both baseball cards, both artwork) yet their value is significantly different due to value placed on it by society because of the specific item’s rarity, desirability and popularity.
We’ll go into this a bit deeper but keep this idea top of mind for when we start getting into NFT marketplaces.
What makes NFTs valuable?
This is a really key point. As we just covered, not all NFTs are created equal. What gives NFTs value is their perceived value? It comes down to scarcity (how rare they are), popularity, and certifiable ownership.
When you create an NFT, you are etching your proof of purchase and ownership into the Ethereum blockchain. When a purchase of an NFT is made, this is like a certificate of ownership of digital art (still a relatively novel concept in our online-centric world). Until you sell and transfer your art to someone, it is certifiably and provably yours in a digital ledger that can never have past entries modified.
Surprise! Just because it’s an NFT doesn’t mean it has any value
I listed this NFT I created last week of an aerial photo I took in 2018 with my drone in Halifax Harbour for 0.001 ETH ($1.77 CAD) and nobody bought it (because nobody knows about it and people don’t care).
In contrast, Mike Winkelmann (aka: Beeple) just auctioned and sold the short video artwork (below) for 6.6 million dollars 🤯.
Why would anyone pay that much?
It’s an interesting concept, and one that is intellectually challenging to grasp. Why would anyone pay $6.6 million dollars for a video that anyone can watch at anytime just by looking it up online?
It comes down to people wanting to feel like they own something valuable.
You can say that about lots of things. Here’s a photo I found online of the Mona Lisa. Just like the video above, you’re looking at it for free here. Yet it doesn’t mean you own this $850 million dollar painting.
What not to do
NFTs in 2021, are what cryptocurrencies were in 2018
- very speculative
- people don’t understand them much
- everyone is trying to get rich quick
- a lot of people are going to end up losing a lot of money
Warnings:
- Don’t invest in what you don’t understand
If you don’t fully understand the concepts above, don’t start spending money on things. - Don’t start buying random NFTs
Just because it’s an NFT doesn’t mean it has (or ever will have) any real value. Somebody can whip up a drawing on their iPad and create an NFT in 5 minutes. Unless they’re someone famous or do a really good job at marketing their product and making it popular, that NFT is going to be dead in the water. - Don’t invest any money you’re not 100% ready to lose
Many NFTs have skyrocketed in society’s value this year because it’s something new, some people have gotten really rich, and people are paying an arm and a leg for digital collectibles such as Cryptokitties, Cryptopunks, or digital artwork.
How can I buy and sell NFTs in Canada?
There are a few steps to buying and selling. You’ll need to create a few different accounts if you’re brand new. Follow along and ask any questions you need in the comments!
Step 1: Create an Account on a Crypto Exchange
You’re going to need to buy some Ether (one of the largest cryptocurrencies on the market) in order to make transactions on the Ethereum blockchain (where most NFTs currently reside).
To do that, you’ll need to create an account on a crypto exchange which plays nice with Canadians. I recommend Coinberry in Canada, however it may be a little slow when transferring your ETH. The most popular one out there today is Coinbase (but it’s got some nasty fees around 4%).
(For other options, check out my “How to Buy Cryptocurrencies in Canada” article.)
Step 2: Buy Ether (ETH)
Once you’ve got an account, you’ll need to fund your account with Canadian Dollars (you can safely do this by e-transfer), then buy ETH with it. Ether is the currency used on the Ethereum Blockchain.
Step 3: Create a Metamask Account (your digital wallet)
What is Metamask you ask? Good question, it’s important not to blindly follow instructions.
Think of Metamask as your digital wallet that lives in your browser. It is what allows you to log into and interact with decentralized applications (including NFT marketplaces, as well certain games and collectible platforms like Cryptokitties and Cryptopunks).
Metamask is a browser extension that acts as a digital wallet, which allows you to interact with decentralized applications (dapps). This is where you will send the Ether you bought, and this is where your NFTs will be stored
(Important Warning: Keep your password, private key, and 12 word seed-phrase in a safe place, if you lose these, you cannot recover them)
Step 4: Send your ETH to your Metamask Account
You’ll need to transfer some of your ETH from your cryptocurrency exchange (like Coinberry).
Note: Because many exchanges are really overloaded, it may take a long time (up to 24 hours) to send your ETH from certain exchanges to Metamask. If you’re in a rush, you can use Coinbase instead of Coinberry, which will be faster, but you’ll need to pay nasty credit card fees to fund your account.
Step 5: Go to an NFT Marketplace and Buy (or sell) NFTs
Now that you’re all setup with Metamask, you’ll be able to log into a number of NFT marketplaces, including the open marketplaces below, and others like Cryptokitties and Cryptopunks etc.
Read on for more!
Where Can I Buy & Sell NFTs in Canada?
The nice thing about this part of the equation is there the fact that we’re in Canada doesn’t make a difference. Once you’ve purchased Ether with your Canadian dollars, then you’ve opened yourself up to the whole wide world digitally. Cryptocurrencies like Ether aren’t limited to being used in one specific country.
There are a number of large marketplaces you can buy/sell NFT’s. To keep things simple, we’ll focus on 2 major ones:
1. OpenSea
OpenSea is the largest and oldest NFT marketplace, operating since 2017. It is currently one of the best platforms to get started on as a beginner as it is very user friendly, has tons of guides, and lists many NFT’s from multiple other platforms too. They aim to be the eBay of NFTs.
Create an OpenSea Account (you’ll need Metamask first)
Create an OpenSea Account
2. Rarible
Rarible is the new kid on the block. After gaining a lot of popularity in 2020, it is another open marketplace which focuses more heavily on artwork.
Create a Rarible Account (again, you’ll need Metamask first)
Create a Rarible Account
What are Gas Fees?
The best analogy I can think of here is a highway toll booth. Think of the Ethereum blockchain as the highway, and gas fees as the toll. In order to drive on the highway, you need to pay a toll.
In the same way, in order to write something on the Ethereum blockchain (ie: posting something for sale, or buying something), you’ll need to pay a gas fee. This fee is typically measured in Gwei (a micro-unit of Ether). Think of pennies, nickels and dimes to our dollar.
1 billion Gwei = 1 ETH
At the moment, because there are so many people using the Ethereum blockchain, gas fees have gotten quite high (as of today, you can pay $50–80 CAD just to post, buy, or sell something).
Certain platforms like OpenSea (above) allow you to post and auction your NFTs without paying gas fees, charging you only when you accept a purchase request.
What kinds of NFTs should I consider buying?
Here’s where we hop on the speculation train.
There are more and more types of assets that can be turned into NFTs, and their value is really determined by popularity, and what people feel will grow in value. Here are some examples:
- Digital Trading Cards
- Artwork
- Music
- Event tickets
- Domain Names
- Books
- Game Items
Like a rare painting, a fine bottle of wine, or gold, you’ll want to invest in something you feel will appreciate in value (or something you simply want proof of ownership of for personal reasons).
If you feel like Cryptokitties, Cryptopunks, or Beeple’s artwork will become rare and desirable in the near (or far) future, then invest in those things. Otherwise, you should hold off.
At the moment, there are lots of trendy NFTs, many of which are currently growing quickly in value. That being said, much of this current value is hype and can come and go quickly, so please do your research, be careful with what you invest in, and only invest what you’re willing to lose 100% of.
I hope this article was useful in helping my Canadian friends in navigating the mysterious new world of NFTs! Good luck, and if you have any questions, please comment below or reach me on Twitter @izzydoesizzy.
Happy NFT-ing and stay safe!
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About Izzy
Izzy Piyale-Sheard is the Founder of ClearCareer, a Canadian career coaching program to help job seekers succeed in their career aspirations. In his spare time, he likes to write about career growth, cryptocurrencies, and technology.
Find him at: izzydoesizzy.com
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