Projects that bring innovation to the industry or improve existing solutions regularly appear in the crypto market. One of the hot trends in blockchain is digital certificates for ownership of intellectual property. Not only famous artists and musicians, but also ordinary users can make money from NFT tokens. They create them, get them for free, sell them on the Internet and even invest in art objects.
What is an NFT-token
Increasing interest in a new type of digital asset has become the industry’s main event in 2021. NFT (Non-Fungible Token) is a unique non-replaceable token created using blockchain technology.
It is essentially a digital certificate. It confirms the right to own an asset: a piece of art, a picture, a video, a music file, etc. Unlike cryptocurrency, each such coin is unique. Information about the author will be displayed in the code of the digital artifact. For example, a famous entrepreneur Ilon Musk created his own koin. Any other user can do it as well.
Examples with NFT prices
According to the analytical website DappRadar, the total volume of trading in digital property in the first half of 2021 exceeded $2.5 billion. This is about 26 times more than for the whole of 2020. At that time, the market capitalization was $95 million. In June, the volume of sales on the OpenSea marketplace approached a record $150 million. Thanks to profitable deals, owners were able to make a decent profit. For example, Canadian singer Grimes received $5.8 million.
The money was received for the collection of digital art WarNymph Collection Vol. 1 20 minutes after the auction opened. And Ilon Musk recorded a music track about the NFT, promising to sell the song-coin. The buyer could be the famous artist Beeple. He offered almost $69 million for the asset. But the entrepreneur as of September 2021 has not yet given his consent. Another striking example of the transformation of art into a virtual artifact was the recent tokenization of the painting of street artist Banksy Morons (White). The physical original of the work is estimated at $95 thousand. He was burned in New York. Then the cost of the digital copy at Sotheby’s auction rose to $380 thousand. However, do not think that coins are associated only with the sphere of art. More recently, they have begun to spread in the real estate industries as well. The company Unstoppable Domains (a joint startup of American and Ukrainian businessmen) started selling premium domains. One of them – win.crypto – managed to sell for $100 thousand.
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How to make money on NFT tokens
The new trend of digital technologies offers a unique way to own assets and a number of opportunities for their monetization. These methods are available not only for experienced users, but also for beginners.
Investment
Investing in this coin is no more complicated than in other assets. The investor buys the token cheaper in order to sell it more expensive at the right moment. The difficulty lies in understanding how profitable the investment will be. Many virtual assets have low liquidity. To make the transaction profitable, you need to properly evaluate the artifact. And to do this, you will need to study the Non-Fungible Token sphere.
Creating your own token
First, you need to choose a digital object – a painting, a photo, a music track and something else from the field of content or art. The next step is to register on the marketplace and post the product with a description and price. As soon as the user clicks the “Create” button, the asset has a unique address in the blockchain. Creating your own koin is a good way to capitalize on the new trend of NFT tokens. You can do this, for example, on the OpenSea platform. You will need to connect an Ethereum wallet beforehand, and then you can move on to creating a koin. After clicking the “Create” button, the system will offer to fill in all the fields provided. It is also necessary to come up with a logo, cover and verify the album.
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Free of charge
You don’t have to have your own assets to trade them. Coins can be obtained for free in giveaways. Cryptocurrency companies and projects run similar promotions on social networks. They are similar to the way sellers organize tasting of goods. In addition, there are aggregator sites. They sell digitized objects for bonus points.
Ways to get NFT for free
The opportunity to take coins for free is available even for newcomers to the crypto market. Coins can be obtained as a bonus for certain actions or won in a contest.
Buying for a fee
Earnings on NFT are possible, including thanks to bonushunting. The principle of buying a digital artifact for a reward looks like this:
- The user collects points on a cryptocurrency aggregator site (for example, Coingecko).
- Periodically, the resource puts up a collection of tokens that can be exchanged for points. These sets also include notepads, T-shirts and other branded goods.
Advanced users manage to earn good money with the cards received on Coingecko. So one of the frogs shown below managed to sell for 1.5 ETH. As of September 2021, this corresponds to $5345 thousand.
Participation in giveaways
Representatives of the NFT-community often organize drawings in social networks with valuable prizes in the form of tokens. Developers of cryptoprojects, their founders, as well as representatives of exchanges take part in the actions. For example, the company Don Wonton, who created the famous blockchain project Avalanche, regularly holds NFT lotteries. Subscribers of the company’s Twitter account can participate in them. To do this, you need to retweet the contest post. In the comment it is necessary to write the address of the e-wallet. Within each campaign up to 20 cards are drawn. Everyone can get coins.
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Creating your own token
Any digital asset is converted to NFT. To do this, you need to prepare a file and upload it to the coinage platform. It is equally important to properly evaluate the project.
Selecting an asset
NFT can be used for tokenization of any items. Media files look like obvious contenders. But the scope of the new asset class is wider:
- Music tracks (InfiNFT, Mintbase).
- Gaming assets (Sorare, Axie Infinity).
- Domain names on the blockchain (Ethereum Name Service).
- Insurance policies (yInsure).
- Virtual real estate objects (Decentraland).
- Art objects (KnownOrigin, SuperRare) and others.
Virtual collectibles can also include badges, event tickets, and luxury items (jewelry, watches, collectible alcohol).
Valuation
It is not difficult to become an investor in digital art or real estate. The main thing is to choose which project to invest in. To evaluate the asset, it is worth analyzing its origin and the reputation of the author. An important aspect is the scarcity of supply. For example, NFTs from a well-known artist are more valuable than limited edition coins from a novice author.
Files
A media object will be required to create a koin. Non-Fungible Token supports a variety of file formats. For example, MP3, GIF, JPG, GLB, PNG. The finished product is uploaded to a tokenization platform.
Minting
Coins are created fully automated. There are many platforms in the Ethereum ecosystem for minting (creating) coins:
- Do-it-Yourself portals – OpenSea, InfiNFT, Cargo, Rarible.
- Exclusive sites that require you to apply and wait for the administration’s approval (SuperRare Async Art).
All platforms work on a common principle. The user connects his wallet with support for the blockchain in which the NFT issue is planned and uploads a file. At this stage, it is possible to designate the type of asset (stand-alone or issue-based), royalty percentage and other parameters.
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Buying and selling NFT tokens
Open market ETH platforms make it easy to put digital assets from across the ecosystem up for sale. The most popular in September 2021 are NBA Top Shot, OpenSea, CruptoPunks, Rarible, and Sorare. They resemble traditional marketplaces like eBay and Etsy in terms of features and interface.
| Marketplace | As of September 2021 | |
|---|---|---|
| Number of users (people) | Total trading volume ($) | |
| NBA Top Shot | 205 000 | 372 mln |
| OpenSea | 71 800 | 222 million |
| CruptoPunks | 23 000 | 156 mln |
| Rarible | 33 100 | 64 mln |
| Sorare | 11 500 | 39 million |
To make money on NFT, a user needs to first buy a coin. And then sell it at a higher price. It is possible to try to put up a lot that managed to earn for free.
Popular trading platforms
In September 2021, there are about 50 marketplaces operating in the Ethereum ecosystem. Some of them support specific assets (Enjin, Decentraland). Others trade almost all types of coins.OpenSeaOne of the largest platforms offers thousands of coins – from simple game cards to exclusive paintings by contemporary artists. To sell a token created on the portal, it is enough to select the “Sell” option and sign the transaction to finalize the deal. The price of the lot is set at creation. The author chooses a fixed amount in any currency or opens an auction. To start the auction, you need to specify its duration and the starting price of the asset.SandboxOn the site you can create, buy and sell tokens. Regular gamers and representatives of large projects, such as My Crypto Heroes and CryptoKitties, participate in transactions. LAND tokens, which make up the Decentraland meta-universe, are traded here. Plots of land in it began to be bought back in 2019. In February 2021, the second wave of sales took place.SuperRareOn this platform, digital art objects are traded. All assets have a transparent ownership history. To put the lot for sale, the artist must confirm the authorship by obtaining a certificate. He then sets the price himself. Buyers bid as at a classic auction.
Rarible
This is the first community-owned NFT trading platform. Here you can mint, buy and sell digital items. The Rarible project is the leader in terms of daily trading volume. Every day artifacts worth about $1.5 million are sold here.NBA Top ShotThe platform cooperates with the basketball league of the same name. Here they sell not traditional static photos of players, but full-fledged clips or videos. Each lot is a unique token. Cards with spectacular moments of games, divided by series, are released in limited quantities. Their prices are rising rapidly. For example, cards with moments of the best NBA player LeBron James cost from $250 to $60 thousand.
Possible risks and the future of the NFT
The attractiveness of non-interchangeable coins is due to the ease of transaction and price fluctuations. Investors are inspired with optimism by the rapid growth of capitalization and the opportunity to enter the market at an early stage. But there are also pitfalls. The main threat is related to the rapid growth of prices. Some tokens have risen in price by 2,000% or more. Many assets lack liquidity. You can buy a lot in a few minutes, but it will take months to sell it. As in many other areas, the risk of fraud is not excluded in NFT. Tokens are stolen by intruders, often through the fault of users who have lost their online wallet password. In addition, there are still risks of hacker attacks. Some artists have already suffered from them. Fraudsters illegally assigned codes to their paintings and sold works of art. Representatives of the creative environment even united in groups to exchange links to the pages of hackers.
Conclusion
It is too early to draw unambiguous conclusions about non-interchangeable tokens. However, it is already clear that this is a promising type of digital asset. Today, it is possible to make money on NFT tokens in various ways. You don’t even need to have special knowledge and make large investments to do this.
Frequently Asked Questions
❓ Is it possible to earn on NFT only in cryptocurrency?
It all depends on the conditions of a particular platform. Some sites accept only cryptocurrencies. On others, the sale of NFT is for US dollars. But almost always the exchange for Bitcoin or Ethereum is available at the exchange rate.
✅ Are NFTs legal in Russia?
Unlike cryptocurrency, non-replaceable tokens are associated with the transfer of copyright to objects. This sphere is regulated by the Civil Code of the Russian Federation. But the method of transferring ownership by means of a token is not reflected in the legislation as of September 2021. Therefore, from a legal point of view, the purchase and sale of NFT is a transaction without a written form, which will confirm the existence of own rights or the fact of incurred expenses.
❔ How do I value my own art object in NFT?
On the digital art marketplace, artists with a name and reputation sell the most. Another pricing factor is reviews. Therefore, it is better for beginners to start small. First work for their name, then it generates income.
💻 What other sites are there for selling tokens?
Along with the big marketplaces, there are niche-specific platforms. For selling content – EulerBeats, Mirror, Audis, for selling art – Known Origin, Nifty Gateway, Async Art.
🤔 If the buyer of an NFT token doesn’t own the item, why buy it?
Picture files or videos can be easily downloaded online. But the main value comes from exclusivity, not widespread availability. Blockchain captures information about the owner of the asset. Information about the object itself is also stored online.
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