How to Make Money with NFT
So, you’ve heard of NFTs and how some people have made money on them. NFTs are the latest cryptocurrency sensation to go mainstream. If you’re an entrepreneur or small business that creates some form of digital content, it makes sense for you to learn the ropes of making money through NFTs.
You may have heard of the 24-year-old artist who made over $300,000 selling her art as NFTs or Rob Gronkowski selling NFTs of his best Super Bowl moments. With this news hitting social media, it’s no surprise how quickly NFT rose to fame with more people jumping on the bandwagon.
The first step to making money with NFTs is to understand them. We’ll provide a brief explanation of NFTs and guide you on how to make money with NFT by selling them. Let’s first start by explaining what exactly NFTs are.
What are NFTs?
NFTs or non-fungible tokens are pieces of cryptographic tokens that exist on a blockchain. They’re used for real-world items like artwork, music art, and even real estate but in a virtual capacity. Unlike cryptocurrencies, NFTs cannot be traded or exchanged because they are not identical to one another.
Think of baseball cards or a rare coin collection. NFTs create scarcity among assets that are otherwise infinitely available. They are typically used to buy and sell digital items like tweets, artwork, gaming skins, and virtual real estate.
2021 was a year of growth for NFTs, with sales hitting $2.5 billion in the first half of the year. There are two ways you can make money with NFT. The first is to sell your original content as NFT.
How to Sell NFTs?
NFTs are generally sold on marketplaces with different processes depending on the platform of your choice. Essentially, you’ll upload your content to the marketplace, turn it into NFT, and wait for it to sell. It’s very similar to Amazon or Etsy. If you already have a digital content portfolio for which you own the copyright, here’s what you need to do next:
1. Select Your Marketplace, Mint the NFT, and Link Wallet
There are dozens of marketplaces for you to choose from. These include OpenSea, Axie Marketplace, Rarible, SuperRare, and Mintable. Have a quick look at these marketplaces and select one that best suits your content.
Your next step is to “mint” the NFT. In simple terms, minting an NFT is the process of turning the digital file into a crypto collectible or a digital asset on the Ethereum blockchain. Though this may sound confusing, most, if not all, marketplaces will provide a step-by-step guide on minting your NFT right on their platform.
Once you’ve selected the marketplace, you’ll have to link your funded cryptocurrency wallet. After that, upload your digital file and follow the process on your chosen marketplace. Each platform will have different processes and allow you to either sell the item as a one-off purchase or earn royalties.
2. List NFT for Sale
Once you have filled out the information and your file is uploaded and minted, it’s time to list it for sale. After listing it for sale, you’ll notice the marketplace will calculate “gas fees.” This is an Ethereum blockchain network fee to record the transactions. This fee will vary depending on how busy the network is. The best way to reduce this fee is to list your product during non-peak hours, depending on the marketplace.
Can I Trade NFTs?
Yes, you can. This is the second option to making money with NFT. Selling NFTs isn’t just for creators. Some entrepreneurs and investors utilize NFTs like stocks and profit by buying and selling them. If you have already purchased a collection of NFTs and don’t need them anymore, you can easily sell them the same way you would if you were to create them yourself. The only step you’ll skip is the minting process.
The trick to trading NFTs is when to sell them. The right time to sell an NFT will depend on what it is, why you bought it, and if there’s any other interest in the item. Quick research on the internet and marketplace can help you determine this.
You’ll also have to factor in price appreciation or depreciation. Calculate your potential profit and loss by including additional costs like gas fees, marketplace listing fees, and royalties paid to the original owner. These fees will ultimately reduce your final take-home amount.
For more complex NFT trading that requires in-depth knowledge of the cryptocurrency industry, you may want to consider consulting a professional. As NFTs are relatively new, you can scout freelancer sites to hire someone who can help you with this.
What is the Future of NFTs?
The future of any blockchain experiment is unknown. However, experts predict that NFTs are here to stay and will continue to grow beyond the art and gaming realm, especially if wealthy investors continue investing money.
The growth of NFT can also be attributed to its features that can represent proof of ownership, provide social status, grant exclusive access, manage licensing, and certify authenticity. It allows you ownership of your products the way Bitcoin enables you to be your own banker.
It’s important to remember that while the process of selling NFTs may be straightforward, it may not be as easy as it seems. Minting your content and selling it will incur marketplace and Ethereum costs which can be considerably high depending on when you’re putting it up for sale. Trading NFTs can come with uncertainty, given the volatility of this young market.
The best way to make money with NFT will differ by person. If you or your small business have money to spare, you can choose to buy an asset that will gain interest as time goes on and sell it when it appreciates. If you’re a content creator, your best option would be to use NFT as an alternative way to monetize your talent.
This article, “How to Make Money with NFT” was first published on Small Business Trends