Some non-fungible tokens can sell for huge amounts of money, while others are worth almost nothing.
So, what gives an NFT value?
Since NFTs are unique digital assets that can’t be copied, they attract people with a ‘collector mentality. Ultimately, it’s the collective interest of would-be purchasers that drives the price.
In reality, something is only as valuable as much as someone is willing to pay for it. But if many people want to be the owner of the item then the price can go up considerably.
However, even this does not mean that any given NFT will be a good investment.
Take the famous Jack Dorsey Twitter NFT for example…
A 2006 tweet by Twitter CEO Jack Dorsey, sold for $2.9m in March 2021. The buyer saw value in this NFT since it was the first-ever tweet created on the Twitter platform.
The buyer then tried to resell the NFT on the OpenSea platform for $48m. However, the best offer he received was $6,800 so he lost a huge amount of money on his purchase!
Another way people see value in NFTs is when a talented artist creates a piece of art digitally. In this way, the price of NFTs may vary widely, depending on the artist’s skill level.
The utility of NFTs is another factor determining their value. Proof of ownership is one major component. While anyone can take a picture of an NFT, blockchain technology unequivocally states true ownership publically.
How Can I Buy an NFT?
The majority of trading platforms where you can buy and sell NFTs will require you to use cryptocurrency to make a purchase. However, are a small handful of platforms like OpenSea and MoonPay that will accept credit cards.
To use cryptocurrency to buy NFTs (and to have more choice between trading platforms) you’ll need to set up a cryptocurrency wallet. There are lots to choose from, but some of the most popular crypto wallets include Coinbase, Binance, and MetaMask wallets.
Once your digital wallet is set up, you can begin purchasing cryptocurrency around the market value at the time. If you’re purchasing a popular currency like Bitcoin, then you’ll likely have more flexibility over what you can buy with it later.
While accumulating Bitcoin in your wallet, you can begin looking at NFT trading platforms to see what you want to buy.
At the moment, OpenSea is the biggest NFT marketplace, and it trades in all kinds of assets. For example, you can buy digital art at a cheap price and then make it more unique for reselling. Or, you can find very high-priced items to buy and hold or resell later.
How Can I Showcase My NFTs?
There are a number of ways you can promote an NFT and attract interested buyers. For example, you can share them on social platforms like Instagram, Twitter, and Reddit.
Discord is also another popular platform to join if you want to promote your digital items to a wider audience. Some sellers also go as far as using paid advertising or organizing and hosting events in the Metaverse where they can showcase their artwork.
How Can I Sell an NFT?
Before you can actually sell your NFT, you first need to mint it. The minting process simply means you’ve uniquely published your NFT on the blockchain to make it a purchasable item.
Next, you can list your NFT on a platform like OpenSea and set your asking price. Interested parties can either purchase your NFT via the OpenSea platform or make you an offer for it.
OpenSea allows people to create NFTs for free on their platform, but they’ll take a 2.5% cut of any asset sold on their platform.
There are various minting services out there to choose from. Here are a few you can use to mint your NFTs for free:
- OpenSea
- Rarible
- Binance NFT
- Nifty Gateway
- Async Art
How Will I Know if My NFT Sells?
Depending on which platform you’re using to sell an NFT, keep an eye on the sales page for the NFT you’ve listed for sale.
If someone’s accepted your price or made you an offer, you’ll be able to see it, accept it or reject it on the sales page.
Once you’ve accepted the offer, the funds will be sent to your wallet as cryptocurrency. You can then use the crypto to buy other items, or exchange it for cash.
Related Article: How much does it cost to make an NFT
Ways To Make Money With NFTs
There are a few ways you can make money through NFTs. However, at the moment the two most common ways are either to buy and resell an NFT at a profit or learn how to make them yourself and sell your work.
Most commonly, people either look to buy an NFT at a low sale price or sell it later on for a profit.
Renting Out Your NFTs
If you like the idea of passive income, then renting out your NFTs is a great way to go.
Renting NFTs is quite a new concept, but there are already platforms operating like reNFT that enable you to do it.
Basically, you as the lender will determine the rental price and period, while reNFT facilitates the transaction.
Renting NFTs is a great way to earn money on NFTs that are otherwise just laying about not doing much. The rental process allows you to earn money from your NFTs while ensuring you’ll get the asset back once the rental period is over.
In a way, your NFTs become digital real estate that you can leverage to make money from our collection of NFTs without actually selling them.
If you own in-demand NFTs, then this can be one of the most profitable approaches for you to earn consistent income.
NFT Royalties
If you create Nonfungible tokens yourself, you can continue to earn royalties from them after you’ve sold them, each time they change hands. This is a very common approach to making money on NFTs for digital artists.
This is one of my favorite parts about creating NFTs yourself as it means the original creator can continue to earn passive income from their work forever.
In order to do this, the content creator needs to write terms into the blockchain during the minting process. This way the creator will then be able to receive a kickback from all future sales. When you write the terms, you can also decide the amount you should receive on each future transaction.
For example, if you set the terms at 15%, you’ll receive 15% of the resell value directly into your crypto wallet on all future sales.
NFT Yield Farming
NFT yield farming is a new way to make money with NFTs by staking them for value or tokens to stake NFTs. Basically, thanks to DeFi, you can earn money trading NFTs on the network, kinda like digital trading cards.
In short, this use of NFTs can make money through betting tokens on the potential success of an ap
To participate in NFT yield farming, you first need to look for rare NFTs that you can buy. Once you have made the purchase you can then change the prizes for new NFTs.
NFT Staking
NFT staking is another way people can earn passive income through NFTs. This allows NFT holders to lock in their assets in DeFe (decentralized finance) platforms to earn crypto rewards.
NFT staking is similar to yield farming since it needs a Proof of Stake (PoS) in order to operate in this way. With the PoS in place, NFT holders can be appropriately awarded.
So, why do this?
In a nutshell, once NFT holders have locked up their assets, they can receive awards based on the number of NFTs that have been staked and the annual percentage yield (APY).
Want to know more about NFT staking? Read this article here.
Earn NFTs By Providing Liquidity
Providing liquidity for NFTs is kinda like being an investor. Users that invest in NFTs are referred to as liquidity providers (LP).
If you’re an LP then you can use your liquidity provider tokens to vote and have a say in the decision-making process involved with the NFTs you’re invested in.
Liquidity providers are also known as market makers since they can have a huge influence over the crypto market. Their involvement helps in the process of decentralized trading, and in return, LPs are paid in fees earned from any trades that are made on the platform.
This method appeals to a lot of wealthy investors. Basically, you gotta have a lot of money behind you to be a liquidity provider. But if that’s you then this can be another great passive income stream for you.
Promote NFTs With Affiliate Marketing
Since the emergence of the NFT market many businesses in the space have set up affiliate programs to entice affiliates to promote their products.
As an NFT affiliate, you can get paid well just for recommending products and services in the space. When someone clicks on your NFT referral link and makes a purchase, you get paid a referral commission.
Some companies are offering commissions as high as $500 for a single sale, so there’s plenty of money to be made as an affiliate. To learn more, see my list of NFT affiliate programs.
Making Money With NFTs – Final Thoughts
Thanks to blockchain tech, NFTs are an emerging market with a lot of opportunities. Anyone can get involved in this market even if you’re an introvert looking for a side hustle.
While there certainly are people out there making a lot of money with NFTs, there are also a lot of stories about people losing large sums of money on them too.
It’s still very early days to tell what the future of NFTs will be, but it’s looking like they’ll be here to stay.
If you’re new to this industry and you want to make money through NFTs, I urge you to take your time, do your research, and talk to an experienced investor you can trust first.