How do NFT marketplaces like OpenSea or Blur work?

Okay, no problem. Imagine you and I are sitting down for a coffee, and I'm going to tell you all about what NFT marketplaces like OpenSea and Blur actually are.

NFT Marketplaces? Think of them as a "Digital Christie's Auction House Meets Taobao"

Forget the complex code and jargon. Fundamentally, an NFT marketplace is a platform that allows you to buy and sell unique digital items (NFTs) just like you would browse and shop on Taobao.

These digital items can be:

A piece of digital art
An in-game item or skin
A digital version of a music album
A membership card for a special website
Even a plot of virtual land in a metaverse

The key is that each NFT is unique. Blockchain technology guarantees its authenticity and ownership, meaning no one can forge or duplicate it.

How it Works: A Step-by-Step Walkthrough

Let's look at how buying and selling an NFT on OpenSea happens, from the perspective of a typical buyer (like you) and a seller (like me).

Step One: Preparation - Your "Digital Wallet" and "Cryptocurrency"

Before going shopping, you need a wallet and some money, right? The same applies in the NFT world.

Digital Wallet (Wallet): This isn't the leather wallet in your pocket, but a browser extension or mobile app, most commonly MetaMask (the little fox icon). This wallet is your identity ID + bank account in the blockchain world. It stores your digital assets (NFTs and cryptocurrencies) and is your key to logging into all blockchain applications (including OpenSea). Remember, never tell anyone your seed phrase (a series of words); whoever has it can control your wallet!
Cryptocurrency (Crypto): Most NFT marketplaces are built on Ethereum, so you'll need some Ether (ETH) to pay. You can think of it as the "universal currency" in this digital world, used to buy NFTs and pay transaction fees.

Step Two: Entering the Marketplace - Connecting Your Wallet

When you open the OpenSea website, you won't see a "username/password login" option. Instead, you'll see a big button: "Connect Wallet."

Clicking it will make your MetaMask wallet pop up, asking for your authorization. Once you confirm, you've essentially "logged in." OpenSea will read the public information from your wallet address, such as which NFTs you own and how much ETH you have. This process is very secure; it cannot move your assets unless you actively initiate a transaction and authorize it.

Step Three: Buyer's Perspective - "I Want to Buy a Monkey Avatar!"

Suppose you want to buy a Bored Ape Yacht Club NFT.

Browse and Search: Just like on Taobao, you can directly search for "Bored Ape Yacht Club" and enter its official collection page.
Select Item: You'll see thousands of apes displayed, each with different prices and attributes.
Ways to Buy:
- Fixed Price (Buy Now): Some sellers will set a direct price, for example, "10 ETH." If you find the price acceptable, click "Buy Now." Your wallet will pop up again, asking you to confirm the transaction. Once you confirm, 10 ETH will be transferred from your wallet to the seller, and simultaneously, that ape NFT will automatically transfer from the seller's wallet to yours.
- Make Offer: If an NFT doesn't have a listed price, or you think the listed price is too high, you can make an offer you deem reasonable, such as "8 ETH." The seller will receive your offer and can choose to accept or reject it. If they accept, the transaction process is the same as above.
- Auction: Similar to a traditional auction house, the seller sets a reserve price and an end time. Bidders compete within the specified time, and the highest bidder wins.

Step Four: Seller's Perspective - "I Want to Sell My Art!"

Now it's my turn. I want to sell a piece of digital art I created.

Listing: I go to my profile, find the artwork I want to sell, and click "Sell."
Pricing: The platform will ask me to choose a pricing method: either set a fixed price (e.g., 0.5 ETH) or initiate an auction.
Authorization for Listing: The first time you sell an item from a particular collection, you need to perform an "authorization" step. This is like telling the platform, "I allow you to handle transactions for NFTs in this collection on my behalf." This also requires a wallet confirmation.
Waiting for a Sale: Once listed, my artwork will appear on the marketplace, waiting for buyers. As soon as someone purchases it, the transaction is automatically completed.

Where's the "Magic"? — Smart Contracts

You might ask: How is this process guaranteed to be secure? Why am I sure to receive the NFT once I pay? Why won't a seller take the money and not deliver the item?

The answer is smart contracts.

You can think of a smart contract as an absolutely trustworthy, tireless, and strictly process-oriented automated notary or intermediary.

When I want to sell an NFT, I don't just put it on OpenSea's servers; I "escrow" it through a smart contract.
When you want to buy it, your money isn't sent directly to me; it's sent to this smart contract first.
The smart contract simultaneously checks two things: 1) whether it has received your money; and 2) whether it is holding my NFT.
Once both conditions are met, it will instantly and automatically execute an unchangeable operation: sending the NFT to your wallet and the money to my wallet.

The entire process involves no human intervention; the code is the law. This is the core appeal of blockchain technology: Trustlessness. You don't need to trust me, and I don't need to trust you; we both only need to trust this public, transparent, and automatically executing code.

How Platforms Make Money: Fees and Gas Fees

Platform Fee: OpenSea takes a percentage commission from each successful transaction, for example, 2.5%. This is like the platform service fee charged by Taobao and is their main source of income. Blur's model is more complex, attracting professional traders with its own token incentives and lower fees.
Creator Royalties: This is a cool feature of NFTs. Creators can set a royalty percentage (e.g., 5%). This way, every time their work is resold in the future, they automatically receive 5% in royalties. This is enforced by the smart contract, protecting the creator's long-term interests.
Gas Fee: This money is NOT for OpenSea or Blur! This is the fee you pay to the "miners" or "validators" of the Ethereum network, thanking them for processing and recording your transaction. You can think of it as the "fuel fee" or "toll fee" for driving on the blockchain highway. The more congested the network, the higher the Gas fee. Almost all operations on the blockchain (buying, selling, bidding, authorizing) require a Gas fee.

OpenSea vs. Blur: Mass Market vs. Professional Exchange

Finally, a quick mention of the differences between these two can help you better understand the ecosystem.

OpenSea: More like the Amazon or eBay of NFTs. The interface is user-friendly, functions are comprehensive, and it's suitable for beginners and general users. It's the earliest and largest marketplace, offering a wide variety of items.
Blur: More like the Nasdaq or Wall Street trading terminal of NFTs. Its interface is full of data and charts, with extremely fast transaction speeds, designed for professional traders and "quants" (those who master the rules and strategies). It attracted a large number of high-frequency traders through airdrops of its $BLUR token.

To Summarize

So, an NFT marketplace is a digital asset trading platform based on blockchain smart contracts.

It uses a digital wallet as your identity and account.
It uses smart contracts as an absolutely trustworthy intermediary, guaranteeing "money for goods" transactions.
It allows anyone to freely, securely, and transparently buy and sell unique digital assets.

I hope this explanation gives you a good overview! This world is still very new, with many exciting things waiting to be discovered.