NFTs are proving to be more than just a flash in the pan. You may have heard of NFTs through blockbuster news pieces like ‘Everydays’ by Mike ‘Beeple’ Winklemann, which sold for $63 million. Or maybe you’ve seen how UAE-NFT has celebrated the 50th anniversary of the UAE with a limited series of digital artwork?
However, many people struggle to get their heads around the concept of unique ownership. In this article, we want to pull back the curtain and show you why NFTs aren’t just a fad and how you can make money in this exciting market.
What Are Non-Fungible Tokens (Nfts)?
Breaking down the acronym is the best place to start. NFT stands for non-fungible token. In short, this means that the asset is unique, and no copy of it can ever be exactly like the original. Imagine a rare painting, like Van Gogh’s Sunflowers; it doesn’t matter how good a copy you make or what you print it on – it will never be the original.
Token means digital item. Most commonly, these are drawings, and this is what most people associate with NFTs. But it can be anything, such as music, code, or even a special edition digital bike render. Anything digital can be an NFT. More and more, the lines are blurring, and how NFTs can exist in the real world is hotly debated.
Digital products/assets/art/whatever you want to call them can be copied easily, instantly, and with no loss of quality. So, creating a replica of an NFT is easy, but the one thing you cannot copy is its history – i.e., who created it and who has owned it. Only with that information can any NFT be genuinely unique.
Because of the blockchain technology that NFTs are built on, checking the history of any digital asset is easy and, at the same time – impossible to fake. This solves many traditional problems people find with ‘real’ art.
Why Are Nfts Worth Your Time?
Well, with a market capitalisation of around $23 billion (at the time of writing), there is a lot of value ready to be tapped into. The great thing is that it’s not difficult to get started because many of the most popular platforms are tailored to beginners.
Also, there are many free resources at your fingertips that you can use to build your knowledge as you go. Starting a business off the back of NFTs can begin with minimal investment, and as you grow your knowledge, your investment can follow.
You’d be forgiven for thinking that the current market cap is made up of many independents. However, while most NFT trades and businesses are to individuals, big companies are already well seated on the bandwagon. Names like the NBA, Coca-Cola and Emirates Post are already in the swing of making sales and pushing their brand using non-fungible tokens.
With the recent announcement of the Metaverse, crypto and NFT enthusiasts everywhere are on the edge of their seats, waiting to find out what potential there is in this new digital world to profit from the blockchain – maybe it’s your time to do the same?
Five Ways To Make Money From NFTs
Now comes the part where we give you some real insight into turning a passing interest in NFTs into a money maker – or even a fully-fledged business. Of course, these aren’t the only ways to make money, but they’re a good starting point, no matter the scale of your skill/investment pot.
Create And Sell NFTs
The most obvious on the list. Why not create a digital asset and then sell it? Perhaps you have an artistic flair, or an eye for a great photo and can transfer that to an NFT? If you can channel any sort of creativity then you can make an NFT and sell it.
There are a variety of NFT creation platforms such as Mintable and they’ll make getting started really easy. There are a few starter steps such as setting up a crypto wallet (where you store your cryptocurrency) and then just the standard verification process that you’d find on other websites where financial transactions are made.
Once you’ve made an NFT, you’re ready to put it on the market. A quick google search will throw up all the big names, but OpenSea and Rarible are some excellent examples. After a small fee to list the NFT, you’re ready to increase your income.
Trading NFTs
Not so creative? Have an eye for market trends? Then trading NFTs is going to be a great start for you. Just like any ‘real’ asset, the idea is to buy low/sell high. This can be done through tracking trends on the NFT you’re interested in, or looking at the wider scope of how popular the creator of that NFT is.
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Go to any of the platforms we have already mentioned, search for the type of NFT you want – like art or a video clip – and then you can start making offers to buy.
As with any trading activity, there is an inherent risk. Because NFTs are new and rather volatile you’ll want to do a good amount of research before you pull the trigger. There is such a sea of NFTs that aren’t worth your time, so it pays to be informed.
Stake NFTs
One of the key parts of crypto is the ‘proof-of-stake’ model. In short, users on the blockchain networks validate transactions between parties using ‘staked’ cryptocurrency. This means that everything that happens on the network is confirmed, recorded, and then fully traceable. It’s the reason that NFTs can’t be faked.
The users who validate these transactions, often called miners, dedicate their crypto resources to make this validation possible. In return, they are often given passive income – in the form of the native cryptocurrency – while their assets are being used.
Take Axie Infinity: a game where $3.6 billion has been traded in just under 4 years. All those trades have been validated by users staking their own crypto on the platform. If you have a pot to invest, then consider the different staking options available with NFTs. Most of the current opportunities revolve around games which we’ll touch on next.
NFT games
No need to overcomplicate this one. NFT games are any game that uses NFTs as a tradeable asset within the virtual world. These NFTs might be stakeable, shareable, or just plain sellable and in trading them you can unlock new items and abilities for your character – as in the case of Cyberclassic.
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With in-game purchases and micro-transactions having become the de facto model for modern video games, especially those on mobile, NFTs and crypto are currently becoming a way to make this even more accessible.
In classic games, developers often create their own in-game currency that you can buy for FIAT. Well, we’re seeing that completely replicated by blockchain developers – think Crycash.
Maybe you aren’t interested in playing video games and earning rewards in the way of NFTs. Well, then, why not set up your game studio? The UAE is one of the world’s hotspots for tech talent – so take advantage.
Back NFTs with liquidity
If you find that your interest is purely from an investment angle then backing NFTs with your own cash is another path you can take. Much like trading, it’s going to require a good amount of research to be successful, but there certainly are opportunities available to the savvy investor.
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Once again, leveraging the advantages of DeFI (decentralized finance), an investor can add their investment to a shared pool backing NFTs. In return, they receive a token. If, for example, you are using Ethereum as your platform, this would be an ERC-721 token. This token represents your investment, and whoever owns the token can claim back the investment. Again, this means having a good handle on how you look after your digital assets is important.
Whenever you want to sell your part of the NFT you can liquidate your investment and reap the rewards. Moreover, unlike other FIAT platforms, you’re never limited by trading hours, so you can make a move whenever you want.
Final thoughts
NFTs, as part of crypto, are a rapidly evolving technology that we haven’t scratched the surface of yet. However, it is true; there is currently a big boom surrounding them, allowing you to start developing your own business and income from them.
We’ve only covered a few of the options today, and because of the rapid change in 6 months, there’s likely to be a whole host of other ways to build in the space. Whatever you do, make sure a lot of research backs it up – starting a business starts with a plan.
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