NFT – non-fungible tokens, differ from conventional cryptocurrencies by the presence of their own number, which allows you to distinguish a digital asset from other similar ones. At the same time, bitcoins or ether are no different from each other.
The value of NFTs lies in their scarcity; a non-fungible token cannot be copied or recreated. It can only be purchased or sold on special sites – marketplaces. Also, NFT can be easily created by yourself. You just need to select an item to be converted into digital format, select a site, connect a cryptocurrency wallet and upload a file, having previously described and evaluated it.
There are different subjects in the NFT format:
- artifacts from computer games and applications;
- movies and other video files;
- gaming real estate in virtual universes;
- other items.
There are cases of selling real estate in the format of a non-fungible token. So, in the summer of 2021, the purchase of a very real apartment at a price of 36 ETH was recorded in Kiev. And this is just the beginning of the arrival of NFT in real life.
By mid-2021, the volume of trades in non-fungible tokens across all marketplaces and trading platforms was $2.5 billion. In comparison with the previous year, the jump is simply gigantic, in 2020 the volume of the digital property market is less than $100 million.
Marketplaces sell collections of digital art, music recordings, paintings, and other goods.
Earning options on NFT
Non-fungible tokens provide ample opportunities for generating income. Moreover, this is possible not only for experienced investors but also for beginners who are little familiar with digital technologies.
Main directions of income:
- creating your own NFT;
- free receipt.
Creating your own token
To create your own digital asset in the form of a non-fungible token, you must select a physical object for conversion. It can be a photograph, drawing, painting, music recording or video file, or other content. NFT supports a variety of file formats, including:
After registering on one of the marketplaces (OpenSea, Rarible, Cargo, and others), the selected object must be uploaded and described. The next step is asset valuation. After creation, a unique address corresponding to the digital asset is generated in the blockchain. By the way, you need to have a cryptocurrency wallet.
After creating an NFT, you can download it to your wallet or put it up for sale.
Buying non-fungible tokens in order to increase capital is a profitable business. Digitized works of art can grow exponentially in value over time. This happened with the painting by the famous artist Banksy. The physical original was publicly destroyed, after which the price of the NFT rose from $95,000 to $380,000.
However, it is worth remembering the low liquidity of virtual assets. You can sell a painting or a music file in NFT format for a long time.
The main problem of investment is the difficulty of assessing the profitability of an investment.
Non-fungible tokens are handed out as bonuses or prizes, played in contests. NFT lotteries are regularly held, in which everyone can take part.
The received non-fungible tokens can be used for their own purposes or sold profitably, to make money on it.
They buy and sell non-fungible tokens on special platforms – marketplaces. In terms of their capabilities and functionality, they are similar to the sites for the sale of traditional real items. Among the largest popular NFT platforms are:
- NBA Top Shot – mainly lots related to the basketball league, photos and videos are sold;
- OpenSea is one of the largest platforms;
- Rarible – one of the first marketplaces, allows you not only to sell or buy digital assets but also to release your own;
The principle of making money on speculation is simple – buy cheaper, sell more expensive. It is also possible to put up for sale digital assets received for free in the form of prizes or bonuses. Everything from art to in-game artifacts is on sale. The Sandbox marketplace sells LAND tokens, which are land plots of the Decentraland metaverse.
Prospects for making money on NFT
The rapid growth in the volume of trading in non-fungible tokens and the growing capitalization of digital assets are attracting new players. However, there are also problems associated with fraud and hacker attacks. Despite the risks, NFT has prospects and continues to attract those who want to make money.