How to purchase a Cardano NFT?
Purchasing a Cardano NFT (CNFT) may seem complicated, but that’s because there’s currently no user-friendly way to buy NFTs on Cardano, unlike Ethereum, which uses marketplace websites like OpenSea, Nifty, or Rarible. You might be asking, “so why aren’t we using Ethereum?” Well, we believe the technology behind the Cardano blockchain is incredibly sophisticated and is a much cheaper, faster, and highly scalable solution for creating, buying, and selling NFTs rather than Ethereum. Ease-of-use will improve in the near future when smart contracts are implemented onto the network, but for now, here my attempt at breaking this process down as digestible as I possibly can to educate those who are unfamiliar with the space but wish to support artists and buy their CNFTs.
I’ve also included cool little icons made by Joseph Miranda ;)
Creating a Cardano Wallet to store your ADA and CNFTs
First things first, you cannot use an exchange like CoinBase or KuCoin to purchase a CNFT. I repeat, you cannot use an exchange to purchase CNFTs. This is because Cardano’s native tokens (fungible or non-fungible) are only supported on Cardano’s more modern wallet applications. Exchanges like CoinBase that host older versions of Cardano wallets currently don’t support this cutting-edge technology. There are currently 3 wallet applications that support Cardano’s native tokens: Daedalus, Yoroi, Adalite.
I will explain how this process works using Daedalus.
Daedalus
Daedalus is the most secure out of the three, but uses a lot of computer resources since it literally creates a copy of the entire Cardano blockchain on your computer, which uses up a lot of energy. If you’re just looking for a quick, lighter application, use Yoroi or Adalite. But for the sake of not overcomplicating things, I’ll just explain how to do this using Daedalus since this is what I am most familiar with. (If you understand how to use one, using the others are pretty intuitive)
- Go to https://daedaluswallet.io and download the Daedalus app. Install the app, complete the setup guide and agree to the terms of use.
- From here you need to wait for Daedalus to completely sync with the blockchain. This may take a few minutes, so go grab yourself a coffee.
- Once synced, click “Add wallet” to create a new wallet. Then click “Create”.
- Enter the name of your wallet and create a spending password. Since this we’re dealing in the crypto world, it is highly recommended to use a sophisticated password generator. I personally use the Bitwarden app which you can find on the iPhone and Android app stores. It is also highly recommended that you write down your password on a physical piece of paper and store it safely.
- Next you will need to write down the 24-word passphrase and retype it. This passphrase is used to recover/access your wallet in the future from other apps like Yoroi or if you delete the Daedalus app. It is highly recommended that you write this phrase down on a piece of paper and not your phone and store it safely.
- Finish up the onscreen instructions to create your wallet, then wait for your wallet to completely sync with the blockchain.
- Awesome! You’ve successfully created a wallet. But now you need to fund this wallet. So now you need to purchase ADA through an exchange like www.coinbase.com or www.binance.com/en and send the ADA to your wallet. In Daedalus, in the “Receive” tab, you’ll find a bunch of randomly-generated “hash strings” which are receive addresses for the wallet you just created. Your receive address is what you will use to send ADA from an exchange. Copy your wallet’s receive address and paste it into your exchange’s “send address”.
Your ADA should appear in your Daedalus wallet in less than 5 minutes (it usually only takes a couple of seconds). Pretty cool right? This is how you can send money to anyone in the world in a matter of seconds paying less than a few dollar in fees. This is not the case when sending money in BTC or ETH, let alone sending money with traditional fiat currency (paper money). Sending money in these formats incur many fees.
How to conduct transactions
Since there are no smart contracts, all raw transactions happen manually. When sending your ADA to someone, you will need to copy the recipient’s receive address, paste it in the “Send” tab in Daedalus, type in the amount of ADA to send, and finally confirm the transaction by typing in your “Spending Password”.
To receive ADA or NFTs, copy one of the receive addresses from the “Receive” tab and give it to the sender. Any person who sees this address has the ability to send ADA or tokens (fungible or non-fungible) to your wallet. Keep in mind that since we are working in the crypto space, anyone who sees your receive address has the ability to see your wallet (and its contents including the amount of ADA and the tokens you own) on the blockchain since the entire chain is a public ledger.
“Okay great, so how do I buy your NFTs lol”
- Well, since there is no infrastructure (smart contracts) for Cardano yet, all transactions happen manually meaning that you need to trust that the person you send your ADA to will send you back an NFT in return. Smart contracts take away the trust factor and automatically “contracts” the transaction and is validated by the blockchain, which means you don’t have to worry about trusting anyone, because the blockchain takes care of this for you.
- When we conduct our sales, we provide our collectors an address to send a specific amount of ADA to. We have developed a program that automatically sends the NFT directly to the wallet that you sent the ADA from as soon as you send the money. In this way, we cut out the need of conducting a manual, hand-to-hand transaction which comes with the risk of one party not fulfilling their part of a transaction. This automated payment system is overall improvement to the user-experience when purchasing NFTs. Disclaimer: You are still entrusting us that our program does what we say it does, but for now, this is the best solution to an automatic payment system until smart contracts are a thing.
How to view your NFTs
Currently, Daedalus, Yoroi, and Adalite do not allow you to view your NFTs. Your NFTs (tokens) show up as assets as seen below.
To view your NFTs, you can go to https://pool.pm and copy and paste your receive address into the search bar. Pool.pm is a website tool created by SmaugPool to visualize the Cardano blockchain in real-time. You can see every transaction taking place as well as the tokens being minted/burned all in real-time
Note: Holding your ADA in a Daedalus (hot) wallet is “better” than holding ADA in an exchange. When your ADA is held in your wallet, you own your own digital assets. If your ADA is being held in an exchange, you technically don’t own those assets until you move it to a wallet.
Hope you guys find this helpful! :)