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NFTs have been the talk of the internet for some time now. But what exactly are they? Why have they become so popular? And most importantly, how can they be used to generate income?
If you’ve been thinking about diving into the world of NFTs to make money, here is what you need to know to get started, including what NFTs are and how you can create and sell your own!
What Are NFTs and What Determines Their Worth?
NFTs (non-fungible tokens) are unique digital assets built on the same technology as Bitcoin that exist as pieces of data on the blockchain.
They’re often used to represent artwork, music, or other digital content. And because they’re unique, they are frequently bought, sold, or traded as collectibles. Some examples of NFTs include:
- Trading cards
- Digital artwork
- Virtual pets
- Game items
There are a few reasons why NFTs have become a hot topic in recent years. For one, the blockchain ensures irrefutable proof of ownership as well as provable uniqueness, making it fraud-proof. It also facilitates the tracking of owners throughout the life of the NFT.
Some NFT collections can become extremely valuable under the right circumstances. Some factors that influence an NFT’s value include its age, who created it, and the story behind it.
For some, purchasing an NFT is a way to own a piece of digital history. For example, Twitter founder Jack Dorsey sold the world’s first Tweet as an NFT and made $2.9 million!
Another example is “Beeple’s Crossroads,” which is a piece inspired by the 2020 presidential election that sold for $6.6 million.
How to Create and Sell NFTs
The most common way to make money with NFTs is to create and sell them. If you’re a creative person with a digitizable skill, you can easily use it to create NFTs. Whether you’re a musician, artist, or graphic designer, there’s an NFT market for it.
Here are the steps you need to take to create and sell your first NFT:
1. Create Your Asset
NFTs can exist as virtually any type of digital file but need to be in a format that supports videos, images, or audio files. Many people create digital paintings using software like Adobe Photoshop, Procreate, or Krita.
Another option is to create graphic images using Appypie’s NFT generator, which is a code-free way to create your own NFT collections easily.
Just ensure that whatever graphics you use, you own the rights to; selling someone else’s copyrighted work can land you in hot water!
2. Create a Digital Wallet
Before you can hit the NFT marketplace, you’ll need to create a crypto wallet for sending and receiving cryptocurrency. If you don’t have a blockchain wallet, you can easily create one for free. There are many types of “hot wallets,” which is any digital wallet connected to the internet.
One of the most popular hot wallets is Metamask, which enables you to easily send and receive Ethereum.
When you create your wallet, you’ll want to fund it with some cryptocurrency so you can mint your NFTs. You can buy Ethereum and other cryptocurrencies on exchanges like Kraken or Coinbase. With Metamask, you can purchase Ethereum directly from your wallet.
3. Choose Your Blockchain and NFT Marketplace
The next step is to choose your NFT Marketplace and blockchain. A blockchain is a decentralized database that stores information about transactions.
There are many blockchains, but the most popular one for NFTs is Ethereum.
You can also choose from a number of NFT Marketplaces, but some of the most popular ones are:
A good one to start with is OpenSea, which is the largest NFT marketplace and one of the easiest to get set up on. The most significant advantage of OpenSea is that no verification or coding is required.
Once you choose an NFT marketplace, it will prompt you to connect your wallet. For example, with OpenSea, you can select Metamask from a list of wallets and give it permission to connect.
4. Mint and Price Your NFT
Now comes the fun part: minting your NFT and attaching a price tag for purchase.
“Minting” is the term that describes the process of changing your digital art into a unique crypto asset that’s available for purchase.
The minting process involves uploading your asset to the marketplace and filling out any necessary fields, such as a description, relevant links to info about the product, and the blockchain on which you’ll be selling the NFT.
You can also include properties, levels, stats, and unlockable content that is only available to the asset holder.
Once you’ve created the NFT, you can choose your pricing strategy for it. Depending on the platform you’re using, there are different options for selling your asset, such as selling at a fixed price, running a timed auction, or bundling your NFT with other items.
You can also set up royalties so that you get a percentage each time your asset is resold!
To finish publishing your NFT, you will need to pay what is referred to as a gas fee, which is kind of like a crypto tax. Gas is paid in crypto from your hot wallet.
Tips for Maximizing NFT Sales
Knowing how to create and mint your NFTs is just the beginning; the key to success with selling NFTs is effectively marketing your listings. To that end, here are some tips for a successful NFT marketing campaign.
Promote Your Collection Well Before Launch Day
One of the benefits of publishing your collection on OpenSea is that you can display your NFTs without making them available for purchase right away. Promoting your NFTs before they become available to buy can create buzz around the project in the days and weeks leading up to your launch.
This helps build momentum for your project so that you’ll have fans lined up on launch day to snap up the items they’ve had their eye on.
Provide Additional Value
At the end of the day, most digital assets have limited value in terms of what your buyers can do with them. Not only that, but the gas your buyers will need to pay to have the NFT transferred to them can be expensive in itself.
Therefore, if you can sweeten the deal by adding benefits to the sale, you are more likely to have a successful campaign.
Use OpenSea’s unlockable content feature to offer your buyers extra rewards, like a link to bonus content, an exclusive community, or a product discount coupon. For example, you could create an NFT that, when purchased, gives the buyer access to a secret dropbox folder with bonus images, videos, or other content.
Build a Community
This way, you can use your platforms to not only announce new NFT releases and sales but also provide a space for your fans to connect with each other. This can create a feeling of exclusivity and belonging.
For example, the Bored Ape Yacht Club has built a community of over 10,000 members and has grown to the point where they have even hosted in-person events.
A supportive community can also be essential in promoting your NFTs organically through word-of-mouth marketing.
How to Make Money Buying and Selling NFTs
If you’re not interested in creating your own NFTs, you can still make money by buying and selling them, similar to how investors buy and sell stocks.
You can buy or bid on NFTs on marketplaces like OpenSea through your connected hot wallet. Selling other people’s NFTs is accomplished in much the same way as selling your own, except you forgo the minting process.
However, it’s important to do your homework before investing. Here are a few tips to keep in mind when buying and selling NFTs for profit.
Watch Your Gas Prices
Each time you buy or list an NFT, you have to pay the gas fees for that transaction. Because most NFTs are traded on the Ethereum network, these gas fees can get pretty pricy and eat into your profits.
The good news is there are ways to keep your gas fees low. On OpenSea, you can use the left filter tab to find listings on the Polygon blockchain, which typically has much lower transaction fees. Similarly, when it comes time to sell your NFT, you can list it on Polygon as well.
Buy the Floor Price
NFTs can be very volatile, so purchasing an NFT that has already gone up significantly in price could result in a loss if that NFT then drops in value.
One tactic that works well is buying the floor price on new NFTs that have never been bought or sold before. You can find these items on OpenSea by filtering the collections by “recently listed.”
Stick with NFTs that have a “buy now” option and avoid auctioned items.
Once you have purchased an NFT at its lowest price, you can relist it for a higher amount to an interested collector to turn a profit.
Find and Research Reputable and Popular NFTs
Keep an eye out for verified projects, which are notated with blue checkmarks on OpenSea. Verified accounts can give you confidence that the NFT’s creator is authentic because they own collections with 100 ETH or more of volume sold.
Use Rarity.Tools to Price Your NFTs
When it comes to NFTs, not all assets are created equal; some are rarer than others and therefore more valuable.
Therefore, if you’re looking to buy or sell an NFT, it’s important to be aware of the rarity of the asset in question in order to get a fair price. After all, you wouldn’t want to overpay for a common NFT, nor would you want to undersell a rare NFT for the same price as a common one.
Rarity.Tools is a great platform that allows you to check the rarity of an NFT before making a purchase or listing it for sale. Simply type in the ID of the NFT in question, and the platform will do the rest, informing you of how unique the asset is. Having this information at your fingertips can help you get the best possible price for your NFT transaction.
Warning: Don’t Invest More Than You Can Afford to Lose
As mentioned earlier, NFT trading can be very volatile because an NFT’s value is highly speculative. This means that the prices of NFTs can go up or down very quickly, and you could end up losing money if you’re not careful.
Therefore, it’s critical only to invest what you can afford to lose in the NFT market. This way, even if the value of your NFT decreases, it won’t have a significant impact on your financial wellbeing.
NFTs are still a relatively new phenomenon, but they are gaining traction as a way to monetize digital content. So if you’re looking for a way to make money with your creative talents, NFTs could be an option. Alternatively, buying and selling NFTs for a profit is another option for making money.
Just keep in mind that – as with all things related to cryptocurrency – the NFT market is volatile and can change rapidly; it’s essential to do your research and fully understand the risks before diving in. It’s not the kind of side hustle you can start on a whim and hope to be successful.
Will NFTs stand the test of time? Only the future knows that answer. With that said, there is a potential for profit in the NFT space, if you’re willing to put in the time and effort, and take the associated risk.