Coming up with the perfect gift to give to your loved ones is never an easy task.
However, if they happen to be interested in art and know their way around the crypto market, you can combine the best of both worlds and give them an NFT as a gift.
Non-fungible tokens (NFTs) are all the hype nowadays, with an increasing number of interesting projects coming out each month and traders bidding hundreds of thousands to own one of these collectibles.
Even though anyone can view a specific NFT, these tokens can only have one owner.
So, if you want your gift to stand out from the crowd, you can go through this article to find everything you need to know on how to give NFT as a gift.
Can You Gift An NFT?
Even though the process might be a bit complex if you don’t have much experience with NFT and crypto trading, gifting an NFT is definitely doable.
Nowadays, there are plenty of markets that offer this service, you just have to learn your way around them.
How to Gift an NFT
Without any further ado, let’s get into the exact steps you can follow to send an NFT to someone as a gift.
Step 1: Create a Wallet
If you don’t already have a wallet, we recommend that you download a MetaMaskwallet since it’s compatible with a large number of NFT marketplaces.
Remember that most NFT tokens can only be purchased via Ethereum, so you will have to fund your new wallet with enough ETH to cover the expenses.
Step 2: Choose an NFT Marketplace
Each marketplace works a bit differently and offers a unique set of NFTs. Some have a little bit of everything, while others only include projects from specific niches (e.g. music, gaming, sports, and artwork).
We suggest that you try out OpenSea simply because it has the largest offer.
Once you find a marketplace that lists tokens that you think the recipient will be interested in, you have to open up an account and connect your MetaMask wallet.
NFT secondary marketplaces function similarly to platforms like Amazon or eBay. There is typically an auction taking place and the highest bidder wins the NFT, but it’s not uncommon to also see ‘buy now‘ options.
Step 3: Connect Your Wallet
As we said, most NFT marketplaces operate in a similar manner, so the wallet connection process will be fairly the same no matter which one you choose.
Once you create an account on the marketplace, simply go to the wallets list and choose the one you are using (in this case, MetaMask).
Verify the account information and make sure you type in everything correctly.
Step 4: Find a Gift
Now the fun part – finding a gift!
When picking out the perfect NFT, you should always consider the preferences of your recipient. Do they like music? Are they interested in sports? Or, do they have a thing for fabulous digital artwork?
Depending on the answers to these questions and your personal budget, it shouldn’t be that hard to find an NFT that will impress the recipient.
Step 5: Send Your Gift
After you have chosen an NFT and purchased it, it’s time to send it to your friend/family member.
First, you are going to need the recipient’s public wallet address. Then, you should go to the NFT marketplace and see whether they offer a ‘Gift an NFT’ service (most platforms include this nowadays).
Simply select the NFT you want to gift, choose how you want to transfer it, and then enter the recipient’s unique wallet address in the box that pops up.
Make sure you type in their address correctly, if you gift the NFT to someone else as a mistake, you won’t be able to recover it.
What You Need to Know Before Gifting an NFT
Even though NFTs can be an exciting gift, there are some things you have to keep in mind before you dive into this endeavor.
1. Gas and transaction fees
One of the main things you should be aware of is gas and transaction fees.
This is especially true if the NFT you are interested in is minted on the Ethereum network (most projects are) since it has the highest gas fees in the industry.
When it comes to transaction fees, they are charged each time you buy, sell, or send an NFT on a secondary marketplace. They occur due to the computational expenses of processing blockchain transactions.
On most blockchain networks, the transaction fees aren’t that high, but they can get more expensive if the network traffic is bigger.
2. The recipient will need a wallet
If they are somewhat immersed in the crypto sphere, there is a chance that they already have a wallet.
In case they don’t, you can help them set one up. This can also be a great ‘push’ to help them learn their way around trading if they didn’t have a chance to do it earlier.
Just remember, the majority of wallets have age restrictions, so if the recipient is under 18, it might be hard to give them an NFT.
3. Not all NFTs were created equal
Each NFT project has something different to offer. There are numerous different niches you can find, including sports, music, artwork, gaming, trading cards, photography, metaverse, videos, and so on.
Since you are probably pretty close to the person you are buying the NFT for, you will know which type of NFT will interest them the most.
4. Copyright and fraud
You should know that buying an NFT doesn’t mean that you also bought the copyright.
Copyright will still belong to the creator and he can decide to sell similar NFTs in different formats, without facing any legal consequences.
Also, you should be wary of frauds since there were numerous cases where some users minted and sold other artists’ NFTs without their permission. Always do your research and check out if everything looks legit.
How to Present Your NFT to the Receiver
Gifting an NFT is pretty straightforward, but presenting it is a whole different thing. As with any other gift, you want the presentation to be as exciting as possible.
Here are a couple of ideas on how you can present an NFT to your receiver.
Print the NFT and give it to them in person
If you are giving the NFT to someone who still doesn’t have a wallet and is fairly new to the crypto universe, then it might be a good idea to print out the NFT and give them the picture in person.
That way, when you give them the print, you can also help them set up a crypto wallet to which you can later transfer the NFT.
Additionally, you can even check out some platforms that offer ‘print and frame’ services.
Email/text a link to the NFT and provide them with instructions
In case you won’t have a chance to see the receiver in person, you can email or text them a link to the NFTand include instructions on how they can acquire it.
Of course, you will first need to have their crypto wallet address, so you will have to find a creative way to obtain it.
This presentation doesn’t have the same surprise factor as the first one, but it gets the job done.
Depending on where you live, there are probably certain tax implications regarding cryptos and NFTs that you have to be aware of.
In a lot of countries, cryptocurrencies function the same as money but are treated similarly to stock investments.
Since you will most likely have to buy an NFT via crypto, there is a high chance that it will be regarded as a taxable event.
If the NFT value increases substantially over time, the recipient might choose to sell it, which means they will also have to pay taxes for it.
Be sure to inform yourself of all the tax implications regarding cryptos and NFTs in your country before you choose this type of gift.
Transaction Costs to Consider
You should always count in transaction costs when gifting an NFT. The transaction cost amount will depend mostly on network congestion, with some network fees being even hundreds of dollars.
Also, it’s not uncommon for senders to pay transaction costs twice – once when buying the NFT and when sending it.
Creative Gift Presentation Ideas
You can’t place an NFT in a gift box and wrap it, which means you will have to think of some other way to give it to your recipients.
One method you can use is to add the NFT in a hardware wallet and then give it all together when you see them in person. A good option is to purchase a Ledger wallet since they are pretty affordable and support NFTs.
If this doesn’t seem interesting, you can always use the print method we talked about in one of our previous headings.
Benefits of Gifting NFTs
Aside from having one of the coolest gifts at the party, there are a few more benefits of gifting NFTs.
For starters, if you already have a specific NFT that you aren’t interested in holding anymore, instead of selling it and paying taxes, you can simply give it to someone as a gift.
Additionally, the NFT you send someone can increase in value over time, which will undoubtedly put a smile on the recipient’s face.
As you can see, NFTs can be the perfect gift choice if your recipient is interested in digital art and cryptocurrencies.
While the gifting process might seem a bit complex, it’s actually pretty simple if you follow the steps we outlined.
Just remember to pay attention to things such as network and transaction fees, and tax implications, and make sure you aren’t dealing with a scammer.
CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com