An introduction to how creators make money with NFTs.
What are NFTs? non-fungible tokens might sound like gobbledygook but it is an important concept in crypto. If you have ever wondered how you can make money with NFTs, then this blog is for you.
NFT creators want their digital assets to gain in value over time. However, the value of an NFT is only as good as its liquidity. The liquidity of an item means that the asset can be easily sold or bought on a secondary market. As an NFT creator, you need to find ways to ensure that your digital creations have high liquidity.
What are NFTs?
When most people think about digital currency and blockchain technology, they think about Bitcoin. Bitcoin is a cryptocurrency—a digital form of currency that uses a decentralized ledger to track transactions. However, another type of digital asset has recently been gaining more attention: non-fungible tokens (NFTs). NFTs are unique cryptographic units attached to unique pieces of content that can be bought and sold on a blockchain network.
How do creators make money with NFTs?
NFTs have been all over the news lately, with reports of NFTs selling for millions. But how exactly do NFT creators make money?
The answer to this is two-fold:
(1) they sell the NFT, and
(2) they retain some ownership rights to the NFT.
When an artist creates an NFT, it can be sold to a collector at any time. There is no minimum or maximum price set for an NFT—it’s truly up to the buyer and seller. The artist can also decide to keep the NFT if they want—many artists do this if they feel like their work is their “baby,” or if they don’t feel like it’s worth selling yet (or ever). When an artist sells an NFT, they’re selling the rights to display that piece of art within a digital marketplace; however, the artist retains some ownership rights—they still have access to the file, and typically have some say in where it’s displayed or used.
What can you do with an NFT?
Well, it’s not at all like those old-fashioned “limited edition” collectibles. Those are just physical objects with a number on them, so they’re limited to the number of copies that are printed.
NFTs aren’t like that. They’re digital. It’s like a certificate of authenticity that verifies that the thing you’re buying is really what it says it is. That means you can use them for anything where there might be a question about the authenticity of something online.
When you buy an NFT, you’re not actually buying the thing itself. You’re buying a token that authenticates the thing—a document that says, “This is what this thing says it is.”
Like most investments, NFT is a good investment—but only if you know what you’re doing.
With NFT, some have made a killing, while others have lost the shirt off their back. The difference? Doing your homework and understanding that it’s not a risk-free endeavor.
Essentially, NFT is like buying shares of stock in a company. If the company does well, you do well; if it doesn’t, you don’t. But unlike stocks, there are no publicly traded companies whose performance dictates the value of your NFTs. Rather, the perceived value of an NFT is determined by how much someone else is willing to pay for it. So buying an NFT isn’t really about investing in a specific company or product; it’s about investing in your ability to make money off of other people’s desire to own a piece of something unique and rare.
If you’re looking for a secure way to invest your money with little risk and great potential for profit, then consider traditional low-risk investments like savings accounts or certificates of deposit instead.
But if you’re looking to take a chance on something high-risk with high reward potential and are okay with potentially losing everything you invest, then NFT may be right.
What kind of NFTs sell best?
This is a good question, and there’s no one right answer.
NFTs are all about the story they tell, so it’s important to first identify what kind of story you want to tell. If you have a great idea for an NFT but don’t know where to start, here are some questions that can help get you going:
- What kind of impact do you want your NFT to have?
- How do you want your NFT to be received?
- What makes your story unique?
- Then, take a look around at what other people are doing.
- What kinds of NFTs stand out, and why?
- You can also look into what kinds of stories do well in other forms of media—books, movies, music, etc.—and see how your story might translate.
How much does it cost to create an NFT?
The value of an NFT is influenced by a few different factors:
- Platform fees – To create an NFT, you will likely have to pay some sort of platform fee. Some platforms charge more than others for features like support, and this will affect how much you have to pay overall.
- Minting fee – This is the cost of actually creating your digital asset. It will depend mainly on how many resources your project needs to create the asset you want.
- Gas fees – The Ethereum blockchain charges gas fees in order to “mint” (create) an NFT. These gas fees are paid in ETH, so they vary with the price of ETH over time. In general, they tend to be pretty low compared to other cryptocurrencies—but if you’re minting a lot at once, they can add up!
How To Buy an NFT and Where to Buy?
So you’re ready to invest in your first non-fungible token (NFT), but you don’t know where to start? No worries, we’ve got you covered.
Before you can buy an NFT, you need to download a wallet app that supports Ethereum payments. An Ethereum wallet allows you to use ETH to make transactions on the network. Once your wallet has been set up and funded, head over to OpenSea or Rarible, both of which are popular marketplaces for buying and selling digital artwork and other collectibles in the form of NFT.
On OpenSea, this is how you buy NFTs:
- Create your wallet on MetaMask by using chrome extension or android app
- Create an account and save your 12-word phrase there.
- To get started, you’ll need to transfer cryptocurrency in MetaMask.
- Create an account on OpenSea.
- Go to your OpenSea account and sign in.
- Connect your Metamask wallet with OpenSea
- Use the NFT marketplace to find what you’re looking for.
- Choose the NFTs you want to purchase.
- Select ‘Buy Now’ from the drop-down menu.
- Make your purchase and check out.
To be honest you can make a lot of money with NFTs.
How to Sell NFTs on OpenSea?
OpenSea is the largest marketplace for NFTs, and it has been around since 2018. It has over 1 million users.
It’s very simple to sell an NFT on OpenSea—these are the steps you’ll need to take:
- Go to OpenSea and click on the button that says “Create your first item”
- You will then see this screen:
- Enter the details of your item into the fields provided
- Name: This is what the title of your listing will be (e.g., “The Golden Pony”)
- Description: Describe here what makes this particular item special or unique
- Main image URL: The main image must be 512×512 pixels in size; it will be displayed when people
- Choose your blockchain
Frequently Asked Questions About NFTs
Why are NFTs so popular?
Non-fungible tokens (NFTs) are digital assets that can be bought and sold on the blockchain, just like cryptocurrencies. NFTs can represent artwork, audio, video, or other types of items.
The NFT usually comes with a certificate of authenticity that makes it impossible for the same asset to be sold twice. The data is then stored on a blockchain so that it’s immutable and tamper-proof.
NFTs exploded in popularity when they were used to sell art by Beeple, Grimes, and other artists at astronomical prices. In late February 2021, Grimes sold her collection of digital art for over $6 million in an auction. The sale broke records for the most expensive digital artwork ever sold on blockchain. The collection included ten JPEG images from 2020’s “WarNymph” series; Grimes also shared a new never-before-seen piece called “Death of the Old.” Each NFT was made up of a single JPEG file with a unique token attached to it using blockchain technology.
Once purchased, the purchaser owns the original copy of the artwork and can hang it in their virtual art gallery without having to worry about anyone else claiming ownership or selling a duplicate.
Can I Really make money with NFTs?
There are three ways NFT creators make money:
1. The creator can put a royalty on the sale of their artwork. This means they receive a percentage of every sale made after their initial sale and is similar to the way stock images work.
2. The creator receives all profits from their initial sale. This means they receive 100% profit from their very first sale, but all subsequent sales will not earn them any more money (unless they added a royalty).
3. If a buyer wants to retain ownership rights, they can pay an additional fee upon purchasing the tokenized artwork to ensure they are the only ones who own it and can resell it in future transactions.
Do NFT creators get royalties?
When you buy an NFT, you don’t actually own the content you’re buying. You only own the token that represents the purchase of that content. That means that the creator of the token can sell it multiple times to different people (similar to when artists sell multiple copies of their work).
How can I mint NFTs?
Before you can mint NFTs, you’re going to need a wallet. Once you create your wallet, you can connect it with any number of marketplaces. Once connected, you can start minting and selling!
To sum it up, if you’re going to make money with NFTs, you have three ways to accomplish this. About one-third of people are looking for ways to transfer NFTs into fungible coins such as ETH or BTC. You can accomplish this by creating a marketplace and taking a slight fee on your platform. Over 50% of people are looking to purchase NFTs that they find valuable.
You can do this in many ways, but the most profitable way is through arbitrage between different tokens and exchanges. The third way is to create fungible tokens (ERC-20) and give discounts when purchasing with your NFTs. There’s a lot of new technology around how blockchain will revolutionize the world and I hope that you took away some actionable items from this article. Obviously, if you have any advice, comments or questions feel free to reach out and connect with us on Tech Embounce