In 2018, the NFTs market was just $41 million and by end of 2021, it is worth over $40 billion.
News of a CryptoPunk sold for $530 million and the likes for millions of Dollars may have caught your attention on what NFT is all about and why are people buying into it big time?
Therefore in this post, I will explain:
- The meaning of NFTs and how it work.
- Why is it becoming popular?
- The right NFT marketplaces to buy NFTs.
- How to create and make money with NFT.
- And lastly, if it is a good investment.
So, let’s start…
What is NFTs and how it work
NFT simply means Non-fungible token. And what is Non-fungible?
Non-fungible is an economic term, which is something that is unique or non-interchangeable. A classic example is artwork.
An example of a fungible asset is money, Bitcoin or Ethereum. I can swap my 1 dollar with your own 1 dollar and still retain the value.
So, it is the one-of-its-kind of NFTs that makes them valuable and one NFT is more valuable than the other though similar, such as the Bored Ape Yacht below.
Therefore, NFT is a unique digital asset, such as art, photos, that can be created, traded and stored on Blockchain technology.
If I own one an NFT, there must be a form of ownership to show for it. This is where Blockchain comes into play.
Blockchain is a public ledger that can not be altered. Hence, when you own an NFT, it is the Blockchain record that shows you as the owner and this record also shows the history of such NFT.
In short, your proof of ownership and authenticity is based on blockchain technology but it does not stop anybody from copying and using it.
For example, I can screenshot your NFT and even frame it but that does not take away your ownership.
Of course, not every NFT is absolutely unique, sometimes it’s because of the limited copies of the piece.
For instance, the creator of the NFT instead of one can put on sale ten copies of the piece. As a result, it is only these copies that will exist.
NFTs examples: What can be sold as an NFT?
Although NFTs are mostly arts, they can be anything. This is a new field and what can be termed as an NFT keeps expanding.
Presently, the following are examples of NFT you can buy and sell:
- Art.
- Photography or images.
- Music.
- Collectibles.
- Trading cards.
- Metaverse or Virtual worlds.
- Domain names.
- Games.
- Video.
- Tweets.
- Utiilty.
- etc.
Why is it Popular and Why would anyone buy an NFT?
Money follows value.
From around $300 million in 2019 to over 41 billion market cap in 2021, this booming NFT market industry is surely catching peoples’ attention. And it is not slowing down, having projected to reach $130 billion by 2028.
To you, it can be ridiculous to see some NFTs, which look like cartoon works are being sold for millions of dollars. You wonder how and why.
That is the power of value being given to NFTs.
Because NFTs are rare assets, people are paying so much to get one. And those who pay a lot to get the NFT are buying based on price speculation.
Indeed, people have been making money by trading NFTs.
You may call it a fad that will soon fade away. Have a rethink.
Another factor making NFTs so popular is the power it give to creators.
Over the years, creators usually don’t get rights to their works or enjoy little privileges. In music, for instance, it is normal for an artist to have huge record sales yet get little pay.
In this regard, NFTs platforms are able to give power to creators to earn royalties on their works forever.
For example, If you create and sell an NFT to A for $10 and A sells it to B for $15, you will earn royalty from the sales. Also, if B sells it for $1000 to C, you will still get your cut.
NFT marketplace: Where and How to buy NFT
There are various online NFTs marketplaces where you can buy and sell NFTS such as:
Ethereum is the cryptocurrency mostly used to buy and sell an NFT on these marketplaces. This is one of the reasons Ethereum’s price is predicted to surpass Bitcoin.
Check my post on the best NFTs marketplaces to buy and sell NFT.
How to create an NFT
Like cryptocurrency mining, creating or minting NFTs is not for everybody. For many people, it will be better to trade and invest in NFT.
However, if you think it is something you can do or your career revolves around it, then dive into it.
In order to create NFT and sell, follow these steps:
- Open an account with any of the NFT marketplaces above.
- Create a digital wallet and fund it with cryptocurrency usually Ethereum
- Connect the digital wallet to the NFT platform
- Upload the file and create your NFT listing.
- Lastly, Pay the listing fee to publish it.
Do you wish to create your own unique NFTs arts and sell but don’t how to generate them. A quick way is to outsource it on Fiverr. After that, upload them to any marketplace of your choice.
Also, instead of paying mint fees before sales, you can opt for Lazy minting which lets you publish your NFTs and pay the fees after making sales. By this, you won’t pay for what you could not sell.
You can mint NFT in any of the Blockchains below:
- Ethereum.
- Binance Smart Chain.
- Tron
- Polygon
- Flow
- Cosmos
- Polkadot
- EOS
- WAX
The NFT platform will determine which blockchain you can use to mint and Ethereum is the number one choice on most platforms such as OpenSea and Rarible. Next is Binance Smart Chain used on the Binance website.
Read my post on how to create NFTs to understand the process.
Are NFTs a good investment and how to Invest in NFT?
The fact is that NFT has made many people millionaires through sales or trading in NFT. With this, one can say investing in NFTs is a good investment.
However, it can also be a bad investment if care is not taken because not every NFT will increase in value. Some NFTs are not investment-worthy.
Do you want to invest in NFT?
- Open an account with any of the NFT marketplaces.
- Next, browse through the NFTs.
- Select the one you want especially from creators that have followers.
- Lastly, buy and Hold(HODL) the NFTs for a while before selling it.
How to Make Money with NFTs
You can make money with NFT in different areas which are:
- Make money as a creator of NFTs: You can create your own NFTs and sell them online. The cool thing about being a creator of NFTs is that you can keep receiving royalty forever.
- Make money by trading in NFTs : As an NFT trader, you buy low and sell high just like cryptocurrency trading.
- Make money investing in NFT: No doubt, investing in NFTs can be a good investment.
If you want to generate NFT arts and make money from it as the creator, you can outsource the service on Fiverr and sell it in any NFT marketplace.
FAQs on NFTs
Yes, NFTs can be stolen. For instance, there have been phishing attacks on OpenSea users where at least 1.7 million NFTs worth were stolen. In another case, a Chinese student loses an NFT worth over $500,000. If it is valuable, it can be stolen. So be security conscious in NFTs world and guard against hacking.
One obvious difference between NFTs and cryptocurrency is that while the former is non-fungible, the latter is fungible. Crypto is like money while NFT is like an artwork that is unique.
How to value NFT is just like any other creative work which mostly depends on who is the creator, the work put into it, how appealing is the artwork to buyers and the demand.
NFTs value can go up as far as there is high demand for the piece.
Final Thoughts
Hopefully, by now you can understand what is NFT and why is it popular.
No doubt, just like investing in cryptocurrency, you make money from NFTs as the market keeps surging yearly.
And it can be a very good investment with the right approach.
Therefore, is NFTs something you will like to go into?
Let me know your opinion by dropping comments below.
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