NFT Explained :
NFT’s also known as Non-Fungible Tokens are digital assets. Generally built on the blockchain using the same programming of cryptocurrencies like that of Ethereum or Bitcoin.
Before we proceed, Have you ever asked yourself this question: How can I make money with NFT ? If yes, then this article is for you. Let's find out how:
What does Non-fungible mean?
Non-fungible means it’s unique and cannot be split or replaced by another one. Fungible means that it can be traded or exchanged for one another and they will also hold the same value. It’s replaceable like the dollar, gold, or even frequent flyer loyalty points!
Let’s take for example a dollar. A dollar is fungible, meaning you can trade one dollar in exchange for another dollar and you will have the exact same thing with the same value.
A one of a kind rare baseball card is non-fungible, meaning there’s only one like it, and it cannot be replicated or traded for the exact same thing. With that being clarified, NFTs are Non-Fungible Tokens. A ‘Token’ refers to a digital certificate stored and distributed on a database called the blockchain.
How do NFT’s work? Let’s take a closer look
Basically, NFT's are part of a blockchain. A Blockchain is a decentralized public ledger that records transactions allowing people and organizations to securely store and transfer crypto-currency and information instantly.
NFTs can take the form of anything digital such as artwork, music, event tickets, and even virtual lands! So what exactly are NFTs? And why are they suddenly being sold for a fortune?
Collectors have, for so long, been willing to shell out huge sums of money on unique items such as paintings, trading cards, and vintage collectible items. But now, these items have moved into the digital space in the form of NFTs, or non-fungible tokens.
Possession of these tokens are recorded on a blockchain, a digital ledger using technology similar to the networks that support bitcoin and other cryptocurrencies.
NFTs have unique qualities which stop them from being replaced or 'fungible'. You can think of them as the crypto alternatives to rare Pokémon or baseball cards. And like the traditional art market, NFTs are sold at an auction, with prospective buyers bidding against each other until a price is reached while all of this is happening online!
The rise of the internet means that images, videos and songs can be reproduced and distributed infinitely online, often without any royalties being paid to their creators. Tech giants such as Spotify and YouTube have faced heavy criticism for not compensating artists enough for their work.
Alternatively, Supporters of the NFT technology say that this invention addresses this main problem by allowing ownership to be recorded on the blockchain. Thus, putting a stop to the unlimited reproduction or piracy, and enabling content creators to reap the financial rewards.
Most of the NFTs are priced in the cryptocurrency of Ethereum, the main token of the Ethereum blockchain. And many new investors into this space are buying NFTs as a speculative investment, hoping to sell them at a much higher price than what they originally paid. In addition to this, there is also a large group of people that are holding NFTs for the long run as collectibles.
Besides, Global brands including the Formula 1 and NBA have launched projects centered around NFTs that can be collected or traded by their fans.
Wondering how to buy NFT s?
If you are interested in starting your own NFT collection, you’ll need to acquire some few things:
- First, you’ll need your own digital wallet that allows you to safely store your NFTs and your cryptocurrencies.
- You will also need to purchase some cryptocurrency, like Ether or Bitcoin, depending on which crypto-currency your NFT provider accepts.
You can purchase cryptocurrencies using a credit card on platforms like Coinbase.com or Binance.com. You’ll then be able to move them from the Coinbase exchange to your personal wallet and proceed with the purchase!
There are several marketplaces where you can manage to buy NFTs according to your choice. These marketplaces allow its users to collect and trade unique digital assets. Each digital asset is authentically produced by an artist in the network, and tokenized as a crypto-collectible item that you can own and trade freely.
Every asset listed on the marketplace is a digital collectible – meaning it's a digital object secured by cryptography which is recorded on the blockchain.
Here is a list of popular NFT marketplaces in 2021 :
- Open sea
- Nifty Gateway
- NFT showroom
From the well-known celebrities to the fortunate 500 companies, everyone is talking about launching their own NFTs and making money with NFTs. However, keep in mind that not all NFTs are made equal: while some collectibles are worth millions of dollars, some other ones do not have any value at all.
Making Money with NFTs :
You might be wondering how to make money with NFT’s - There actually are many ways to profit off of NFTs without ever touching one!
One simple straight answer to the question: how to invest in NFT is basically to buy an NFT while it's still early to do so, and hold it as it might possibly be profitable later on. However, always remember that the opposite can also happen and lose your invested money.
In short, the best way to make money with NFTs will vary from one person to another. Just do your research before investing and if you have that extra amount of money to spare, your best bet is to buy an asset that has the possibility to accumulate attention over time.
While some prominent NFTs are overpriced right now, the NFT market is still in the beginning stages. So you still have less competition. And if you are an influencer or a content creator, you probably would like to create your own original NFTs and sell them in return for cryptocurrency.
Top 3 Ways to Make Money with NFTs :
1. DIGITAL ARTWORK
Once you have come up with your own NFT crypto art that you want to sell on the NFT market. Go ahead and upload your artwork onto a given platform such as Opensea so that it will be turned into a smart contract on the blockchain by creating a tokenized certificate for it.
Next, you will have to list it for sale on the Opensea marketplace, Set a price for it , or let collectors bid on your art on the digital art marketplaces. If it is your first time listing an NFT for sale, there will be a fee gas charged as fees and used to pay the miners who will be validating the changes on the blockchain.
2. LICENSED COLLECTIBLES
Tokenizing items such as collectibles seems to be the most obvious application of the Non-Fungible Token technology used to make real money off those collectibles. Besides, popular brands which are already selling physical collectibles in the market such as those that specialize in trading cards can also trade the same thing in a digital form and make money with NFTs
3. NFTs and Gaming
NFT-based video games are another pathway to the future of Non-fungible tokens. Since NFTs use the blockchain to uniquely identify its digital items. This makes them even more valuable.
Until now, none of the games utilizing NFTs have managed to gain a widespread attention and popularity. However, the potential of applying NFTs in video games seems very promising in the near future.
While Gamers are already known to spend fortunes on virtual items, Gaming companies are looking at NFTs as a new way to make money by offering its users the ability to benefit from owning their characters and trade or hold them.
The play to earn concept - People in the Philippines have found a new way to earn cryptocurrency while enjoying their game. The game is called Axie Infinity; it allows the players to make money with NFT and cryptocurrency by breeding, battling, and trading digital pets called Axies.
Related : How to earn passive income with crypto ?
What Are Some Examples of High-Profile NFT Sales?
Even top celebrities like Snoop Dogg have jumped into the NFT movement, releasing unique memories, artwork and coins as secured NFTs.
What Is the Future of NFTs ?
Having most of the experiments taking place on the blockchain, the future is relatively unknown. However, the recent publications indicate that NFTs are not going away any time sooner. In addition, wealthy investors are actually cashing in on them, which will make NFTs and cryptocurrencies co-exist.