How To Make Money With NFTs: A Beginners Guide

NFTs have gained widespread attention and adoption across various industries, including art, music, gaming, collectibles, and virtual real estate.

According to industry reports, the total value of NFT transactions surged to billions of dollars in recent years, with record-breaking sales of individual NFTs reaching millions of dollars.

This tech has provided the options to make money for people, in a few legit ways and mostly by scamming.

And in this article, we are gonna talk about those legit ways.

Caution: This article is for informational purposes only and does not constitute financial advice. Always do your own research.

NFTs Explained

Before getting into the money making part, let’s make sure you understand what NFTs aka Non-fungible Tokens are, and how they work.

NFTs are unique digital assets that represent ownership or proof of authenticity of a specific item or piece of content, recorded on a blockchain.

Unlike cryptocurrencies such as Bitcoin or Ethereum, which are fungible and can be exchanged on a one-to-one basis, NFTs are one-of-a-kind and cannot be replicated or replaced.

Each NFT contains metadata that provides information about the asset it represents, such as its creator, date of creation, and any associated licenses or rights.

NFTs have revolutionized the concept of ownership in the digital realm, enabling creators to tokenize their work and monetize it directly, while providing collectors with a secure and transparent way to buy, sell, and trade digital assets.

Note that NFTs exist on different blockchains like Ethereum, Solana, etc. and the file types can be JPEGs, Music Files, Videos, etc.

And the use of blockchain technology ensures the scarcity, provenance, and authenticity of NFTs, making them valuable as digital collectibles, artworks, in-game assets, and more.

Examples of NFTs

  • Artwork: Digital artists can tokenize their creations as NFTs, allowing collectors to own unique digital art pieces. Examples include “CryptoPunks,” “Beeple’s Everydays,” and “CryptoKitties.”
  • Music: Musicians and producers can release albums, singles, or exclusive content as NFTs, providing fans with ownership rights or special access. Examples include Kings of Leon’s album release as NFTs and 3LAU’s auction of his album as NFTs.
  • Collectibles: Virtual collectibles such as trading cards, memes, and virtual pets can be tokenized as NFTs, enabling collectors to buy, sell, and trade digital memorabilia. Examples include NBA Top Shot, Sorare fantasy football cards, and Decentraland virtual real estate.
  • Virtual real estate: Platforms like Decentraland, The Sandbox, and Cryptovoxels allow users to buy, sell, and develop virtual land and properties as NFTs, creating immersive digital experiences and economies.

How To Make Money With NFTs

There are only 2 ways. Sell. or Create.

1. Invest In NFTs (& Flipping)

Currently, there are tons of NFT collections out there. When investing in NFTs, what you need to consider is the utility or the status each NFTs provides.

Just because some NFT collection has 10k PFP NFTs, doesn’t make it valuable.

Punks are valuable because they are the first, and Apes are valuable because of their strong community and brand (many celebs own Ape NFTs).

Because the core value of NFTs is their uniqueness, collecting them is a lot like collecting art or a moment that you are well connected with.

And because these digital “collectables” are one of a kind, they can be sold for profit just like any physical piece of art or a baseball card could be.

Ok, but what types of NFTs to invest in? What kind of NFT can turn out to be a profitable one?

Well, there is no exact answer to that, but here are some guidelines that you can follow.

  • Assess the reputation, credibility, and past performance of the creator or project team.
  • Evaluate the originality, creativity, and craftsmanship of the NFTs being offered. Consider factors such as artistic merit, technical innovation, and cultural relevance.
  • Find the projects with the best communities. Active and engaged communities can contribute to the long-term success and value of NFTs.

Where do I buy these NFTs?

Platforms like OpenSea, Rarible, Foundation, and others provide a user-friendly interface for browsing, discovering, and transacting with NFTs across various categories and genres.\

But the best ROI comes from buying the NFTs at a mint price, and then selling it for a higher price. Of course, factors like the Project’s value, holding period etc. matter on whether you’ll make a profit or loss.

For example, some people who minted a Bored Ape, had 1000% returns. Some people who had minted NFTs from collections like Evolved Apes ended up with a rug pull and 100% loss.

Ok, how do I buy these NFTs?

Buying and selling NFTs on these marketplaces typically involves connecting a digital wallet (such as MetaMask or Coinbase Wallet) to the platform, funding the wallet with cryptocurrency (e.g., Ethereum), and completing transactions using smart contracts (don’t worry, this happens behind the scenes on Marketplaces) on the blockchain.

And here is a beginner’s guide on how to buy NFTs.

What are the downsides of investing in NFTs?

  • The market for NFTs can be highly volatile, with prices fluctuating rapidly based on supply and demand dynamics, market trends, and speculative activity.
  • The NFT space is not immune to scams, fraud, and malicious actors seeking to exploit unsuspecting investors.
  • Common scams include fake or plagiarized NFTs, phishing attempts, rug pulls (fraudulent projects that disappear with investors’ funds), and pump-and-dump schemes.
  • Investors should be aware of the risks associated with smart contracts, decentralized platforms, and third-party services, and take appropriate measures to secure their digital assets and private keys. Not Your Keys, Not Your NFTs.

Related Read: Where Do NFTs (Non-Fungible Tokens) Get Their Value

2. Create & Sell Your Own NFTs

  1. Create Your Digital Masterpiece: Begin by crafting your artwork digitally. Whether it’s illustrations, animations, music, or any other form of digital expression, ensure that your creation is unique and stands out in the digital realm.
  2. Choose the Right Platform: Select a suitable NFT marketplace to mint and sell your artwork. Popular platforms like OpenSea, Rarible, and Foundation facilitate the minting and trading of NFTs, providing exposure to a global audience of collectors.
  3. Mint Your NFT: Minting your artwork involves transforming it into an NFT token on the chosen platform. This process typically incurs a gas fee, so ensure you have a compatible cryptocurrency wallet and sufficient funds to cover the transaction costs.
  4. Set Your Price and Royalties: Determine the initial selling price of your NFT and set any desired royalties for future resales. Royalties enable artists to earn a percentage of the proceeds each time their artwork is sold in the secondary market, ensuring ongoing revenue streams and incentivizing long-term support for creators.
  5. Market Your NFT: Promote your NFT on social media, art forums, and other relevant platforms to attract potential buyers. Engage with your audience, share insights into your creative process, and leverage the power of storytelling to enhance the value and appeal of your artwork.
  6. Engage with Your Community: Cultivate a loyal fan base and establish connections within the NFT community. Participate in discussions, collaborate with other artists, and attend virtual events and exhibitions to expand your network and gain visibility in the digital art ecosystem.
  7. Monitor Sales and Adapt Strategies: Keep track of your NFT sales and analyze market trends to refine your pricing and promotional strategies. Embrace experimentation, iterate on your artistic style, and remain adaptable to evolving tastes and preferences within the digital art landscape.

Related Read: 8 NFT Minting Tools (No Code) To Create NFT Collections Easily

Conclusion

NFTs present lucrative opportunities for artists and investors, but navigating the landscape requires caution amid potential scams and volatility.

With careful research and strategic engagement, individuals can harness the power of NFTs to redefine digital ownership and expression responsibly.

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