There’s no doubt that Non-Fungible Tokens are the most popular trend in the crypto community right now. From celebrities to respected companies, everyone is talking about launching their own NFTs.
But not all NFTs are made equal: while some are worth a fortune, some can be practically worthless. Let’s take a look at some of the most profitable ways individuals and companies are making money during the current NFT gold rush.
So what makes an NFT more special than a run-of-the-mill crypto coin? The file stores extra information, which elevates it above pure currency and brings it into the realm of, well, anything, really.
The types of NFTs are super-varied, but they could take the form of a piece of digital art or a music file – anything unique that could be stored digitally and be thought of to hold value.
Essentially, they are like any other physical collector's item, but instead of receiving an oil painting on canvas to hang on your wall, for example, you get a JPG file.
It seems like everyone is making money off of NFTs, or non-fungible tokens, those digital artworks that have been labeled the next investment mania.
NFTs are definitely having a moment, with creators of NFT art including artists, gamers and brands across the spectrum of culture. In fact, it seems every day brings a new player to the NFT marketplace.
For artists, stepping into the NFT space adds another space and format to create and share art – and offers their admirers another way to support their work.
With pieces ranging from small, quick-to-make GIFs (Rainbow Cat, above, was sold by NyanCat for $690,000) to more ambitious works, artists can offer the public a range of ways to buy art and make money in the process.
We've talked a bit about those making NFTs to include in video games, something that's shaking up the concept of buying assets in-game. Up until now, any digital assets bought inside a game, still belonged to the game company – with gamers just buying them temporarily to use when playing the game.
But NFTs mean that the ownership of assets has shifted to the actual buyer, meaning that they can be bought and sold across the gaming platform with extra value applied based on who has owned them along the way.
In fact, games are beginning to be made that are based entirely around NFTs, proving how they are shaking up the industry.
What Gives an NFT Value?
Just like pieces in our hypothetical art collection, consumer interest drives the value of an NFT. Similar to trading cards, the rarity and base of interested consumers influence their worth.
While an image can be converted into an NFT, that doesn’t prevent the image from being freely shared. However, it does definitively show who owns the asset through the blockchain.
How Can I Buy an NFT?
Some platforms allow credit cards to be used, but the vast majority of sites where you can buy and sell NFTs require you to use cryptocurrency. You’ll need to establish a wallet for the currency of your choice. Blockchain.com is one popular platform that allows users to create wallets for free.
After verifying your identity on one of these platforms, you can purchase the currency directly around its market value. Once you’ve acquired a decent amount of a popular one like Bitcoin (BTC), it’s time to look at an auction site.
OpenSea is a popular trading post for NFTs of all sorts. It’s similar to sites that sell collectors’ items like eBay. You can find cheap digital art to make uniquely yours.
How Can I Show Off My NFTs?
Mark Cuban’s Lazy.com is the first service that enables you to show off your NFT collection. All you need to do is make an account and follow the on-site prompts to prove ownership.
In a couple minutes, you’ll be able to show off the unique digital content you own to the world!
There are alternative ways to do it, but Lazy.com is by far the easiest method.
How Can I Sell an NFT?
First, you’ll need an original piece of media to which you own the copyright. This can be a picture you took, a gif you created, a song, or pretty much any other form of media.
Next, go to Rarible.com. Click on the “Create” button you’ll see on the top-right portion of the page. You’ll probably want to start by selling a single file, so hit the “Single” option when prompted. Then, you need to think of a sale price for your item. You can choose however much cryptocurrency you’d like and enter it in.
You’ll then be asked about royalty payments in case someone buys your asset and uses it elsewhere. This is optional, but it’s a good idea to set a small rate equivalent to a few cents or so per view of your digital asset. Keep in mind that Rarible retains a 2.5% service fee for items sold.
Last, you’ll need to pay a miners’ fee, also called a “gas” fee, at the time of the listing. To do so, you’ll need to connect the crypto wallet you’ve made. Send over the appropriate funds, and it’ll make a sales page on Rarible for you. Your Rarible listing will automatically propagate to other listing sites like OpenSea.
How Do I Know if My NFT Sells?
Since these sites tend to not use traditional email, you’ll need to check the sales page for updated offers on the asset you’re selling. If you see an acceptable offer, or if a user pays the full price you’ve requested, you’ll be able to accept it.
The crypto funds offered will then be transferred to your wallet. You’ll be able to withdraw this and either use it to purchase other products through crypto or exchange it for cash.
What’s the Easiest Way to Profit Off of NFTs?
For more complex NFTs, you should consult a professional. At the moment, since NFTs are relatively new, your best bet is to use a site like Upwork to hire a freelancer.
For simple, single pieces of media, you can do it yourself on Rarible or a similar site. However, to sell more complex assets, knowledge of the fundamentals of cryptocurrency and experience in that realm is necessary.
You can also profit off of NFTs without ever touching one! Some users treat them like stocks. By purchasing an NFT of something potentially profitable early on, you may be able to make a decent profit later on. Keep in mind that, unfortunately, the opposite could happen with your investment, as well.
In short, the best way to make money off NFTs will vary by person. If you have the money to spare, your best bet may be to buy an asset that will obviously garner interest as time goes on.
While some higher-profile NFTs are overpriced right now, the NFT market is just beginning, so you’ll have far less competition. If you’re a content creator or influencer, you would likely be best off creating your own original NFTs and selling them.
What Are Some Examples of High-Profile NFT Sales?
The viral Nyan Cat gif’s author, Chris Torres, created an NFT to sell ownership of the animation. Even though Nyan Cat was first put on the web a decade ago, the recent influx of interest in NFTs drove Torres to auction it off. He ended up netting the equivalent of approximately $590,000 in the cryptocurrency Ethereum (ETH).
One of the first NFT sales to make the news was Twitter CEO Jack Dorsey selling his first ever tweet as an NFT. With the proceeds going towards charity, it ended up going for $2,500,000.
The most expensive NFT sale happened at Christie’s auction house. It was the famed house’s dive into blockchain auctions. The image was a large JPEG file with 5,000 unique pictures the graphic designer had taken.
Though he wasn’t particularly famous, it sold for just shy of $70,000,000. Part of the reason it sold so well was because it was also the first-ever public auction of an NFT. However, NFTs are still novel enough that “unicorn” sales like this still happen.
What Is the Future of NFTs?
Like most blockchain experiments, the future is relatively unknown. However, prominent publications indicate that NFTs aren’t going away any time soon. Now that wealthy investors are pouring money into them, it’s likely they will become more and more mainstream.
With an ability to sell the right to use assets without giving up ownership, this may even become the new way to sell music to consumers. To jump into the market with the least risk, anything creative that you own is potentially valuable.
Game sprites, music you’ve recorded, pictures you’ve taken, prominent accounts on various sites and forums, and pretty much anything else you can think of could be an NFT.
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