Discover How to Make a Fortune from NFTs Today!
The revolution of digital assets has made lots of changes and contributions to technology. With the inception of stuff like smart contracts and cryptocurrencies. Now we hear of this new wonderful wave of NFTs, the very power of arts in technology. Meanwhile, many are still very much confused about what is a non-fungible Token. So, this prompted us to write this topic, explaining in detail to a layman’s understanding of what they include. Also, we sighted important points you should note.
Therefore, to ensure you are highly enlightened in this article, we recommend you carefully go through this page a line at a time.
You also love this wonderful article on How to Buy NFT Tokens: The Ultimate Guide
What Is Non-Fungible Token? Explained In Layman’s Terms
We’ve all heard about the wave of cryptocurrency, which runs in a series of blocks called a blockchain. Hence, non-fungible tokens (NFTs) include those cryptographic assets on a blockchain having unique identification codes and metadata that differentiate them from each other. We call them non-fungible meaning you can not easily exchange or mix them with other similar goods or assets. Hence, they are usually represented in form of pictures, arts/drawings which when acquired gives you the rightful owner of the existence of such art anywhere in the world.
Furthermore, unlike cryptocurrencies, we don’t trade or exchange them at equivalency. While fungible in its sense includes tokens like cryptocurrencies, which look identical to each other and, therefore, can serve as a medium for commercial transactions.
However, all this information makes each NFT unique, thus, you cannot directly replace it with another token. More so, you cannot swap them, as no two NFTs are alike. In contrast, you can simply exchange Banknotes one for another, if they hold the same value. Because, invariably they have no difference to the holder between, say, one dollar bill and another.
Non-fungible tokens, or NFTs, are digital assets that have been proven unique. You can use them to represent both tangible and intangible items.
Is NFT a good investment?
NFT can serve as a very lucrative investment if you know how to properly go about it. Investors who know its nitty-gritty see it as a good investment opportunity.
More like a physical artwork, the ownership does not count much, rather, your ability to attract the highest bids during the sale. Therefore, an NFT is very profitable whenever you sell an NFT at a higher price compared to what you bought.
How do you make money from NFT?
They exist myriad of ways to generate money from NFT. However, the most popular way includes selling them on NFT-dedicated marketplaces. Below we listed few marketplaces and platforms where you can create, sell, list, and exchange NFTs.
Meanwhile, we have all’s listed a series of ways you can make money from NFTs below.
1. Rent Out
Do you know you can rent out NFTs? Irrespective of their nature as non-fungible tokens/digital assets that one can’t copy. Thus, you can profit from renting out your NFT. renting process is as easy as leasing out a real estate property and collecting rent.
Hence, renting out your NFT means loaning it to someone for a given period of time in exchange for money. This method of earning from NFT still helps you retain your ownership at the end of it all.
2. Royalties
You may wonder how possible you can earn royalties from something as intangible as NFT?
Yes, you can earn royalties from your NFT even after you sell it to someone else. You, however, have to impose these terms on your digital asset during creation, so you will receive royalties for your entire life if someone buys the asset you created.
3. Trade NFTs
Apart from selling NFTS, you also have options to trade them. Some investors and entrepreneurs treat NFTs like stocks, buying and selling them to make money. So, if you currently own a collection of NFTs and don’t want them any longer, you may effortlessly sell them in the same way that you would if you made them yourself. The only step you’d have to skip includes the minting process.
However, when trading NFTs, it is critical to understand when to sell. Still, while making money from NFTs through trading may appear risky, the payoff can be worthwhile.
When is the best time to sell an NFT?
It all depends on the object/art, the reason for purchasing it, and whether or not the item in question raises any other concerns. You can find out by conducting a quick search on the internet and in the marketplace.
You’ll also need to consider any price depreciation or appreciation. Whenever you evaluate your potential profit and loss, always remember to account for additional expenditures like market listing fees, petrol, and royalties given to the original owner. Because these expenses will reduce your profit income.
Meanwhile, if you have an interest in more advanced NFT trading that needs a thorough understanding of the cryptocurrency sector, we recommend you consult with a professional. You can find someone to assist you through freelancer websites.
4. NFT gaming
Games serve as one of the most entertaining aspects of digital technology. So, it will be easy making money from people participating in video games. Hence, we can use NFTs to purchase and exchange in-game items like blockchain-based games. There already exist some extremely expensive collections on the market. For instance, those found in the game CryptoKitties, and are quite difficult to come by.
5. Staking NFTs
The feature of NFTs that makes them able to be staked is one of the advantages of the relationship between NFTs and decentralized finance (DeFi) protocols. Staking means depositing/locking away digital assets into a DeFi protocol smart contract to create a yield.
However, some platforms enable you to use any NFT, while others need you to buy native NFTs to gain staking token incentives. And they are often priced in the platform’s native utility token.
Some examples of platforms that promote NFT staking include:
- Kira Network
- NFTX
- Only1
- Splinterlands
6. Adopt NFT-powered yield farming
Automated market makers (AMMs) enable one to trade digital assets without permission and automatically by using liquidity pools rather than a traditional market of buyers and sellers. Thus, AMMs that are propelled by NFTs are now accessible for users to farm for yields, as NFTs are soon evolving into a key component of AMMs in general. When you integrate different DeFi protocols, you can develop the highest possible yield from your digital assets. We refer to this as “return farming.”
7. Invest in NFT startups
Another incredible way of earning from NFT includes investing in NFT companies. If you want to invest in NFT companies, you can also indirectly earn money with NFTs. If there’s one thing Non-Fungible-Tokens have made clear, it is they’re not a fad in the crypto world. They have a wide span of applications in numerous industries that have the abilities to transform the world.
What is NFT and how does it work?
As earlier mentioned NFTs are cryptographically unique and thus different from their ERC-20 fungible tokens counterparts. Hence making them only transferrable from one person to another without losing their intrinsic rarity. We use NFTs to verify ownership on the blockchain. Because they represent unique pieces of digital data trackable on a smart contract platform.
Furthermore, we create or mint NFTs from digital objects, while they can often represent digital or physical assets. Therefore, NFTs can represent realistic items like real estate, individuals’ identities, property rights, artwork, and more
Additionally, have to tokenize these real-world tangible assets makes trading them more productive while reducing the probability of fraud.
What is Non-Fungible Token (NFT) in Crypto?
How do I start investing in NFTs?
NFT in crypto simply represents those crypto assets that you cannot mutually interchange with other cryptos. Therefore making them non-fungible. Hence the tokens have a unique identity that can not directly be matched by anything else.
While NFT cryptos can still be tokens used to create NFTs. They are usually in form of platforms for creating digital art and games.
To start investing in NFTs, you can visit our this topic on how to buy NFTs to learn more about it.
Can NFT make you rich?
You should not ask this question slowly, because NFT can make you freaking rich. But know that becoming rich involves consistency and the right marketplace and practices. You know you have to be at the right place at the right time and as well have the art in demand. For example, I know of someone who bought art for 20$ and resold it for 500$ within a week. Calculate the percentage profit.