Whether you are an artist, a crypto investor, or simply browsing through some Internet content recently, you certainly have heard about NFT. Everyone is talking about NFTs: the future of digital art, digital money, investments, and more… But what are NFTs? How can you make money with them? Let's find out anything you need to know about the NFT world.
What are NFTs?
To understand what are NFTs (Non-Fungible Tokens) you need to understand first what Fungible Tokens are, that is, what are traditional crypto coins. Cryptocurrencies are based on blockchain technology, which is like a chain of data that works as a public register for every transaction made in the network. The most famous example of cryptocurrency and the fungible token is Bitcoin. What does it mean that Bitcoin is a fungible token?
Bitcoin is a digital currency. It doesn't exist in a physical form; you can't hold a bitcoin in your hand as you do with one dollar. However, just like it happens with dollars, you can exchange one bitcoin with one bitcoin, which is exactly the same. They have the same value. An NFT, instead, is unique. A non-fungible token exists in one single sample. NFTs can be connected to the same blockchain, but each of them is unique. This is why NFTs are used for commodities like pieces of art (digital art, music, videos…).
How are NFTs traded?
NFTs can be sold and bought on specific marketplaces. Just like they were e-commerces, any investor can browse the marketplace, find digital content (like a digital piece of art) that they are interested in, and buy it. However, unlike common marketplaces, the purchase is not paid with dollars or euros but with crypto coins. As you may know, however, there is more than one crypto coin in the world, so what should you use to pay for your NFTs?
That depends on the marketplace that you are using. For example, if the marketplace is based on the Ethereum blockchain, you'll pay with the Ether coin. You'll pay with the CRO coins if the marketplace runs on the Crypto.org blockchain.
How can I sell my NFT?
NFT marketplaces are a point of reference for both buyers and sellers. On those markets, you sell your NFTs (NFTs you created, for example, if you are an artist) and NFTs that you bought from other investors. The process is usually very simple. You need to connect to the marketplace, go to its selling page, and put your NFT on sale.
There is, however, one important content to keep in mind: on blockchains, every operation needs to be signed? What does it mean? That every operation requires a small transaction: even when you put an NFT on sale, you need to pay a fee. How much is this fee? It depends on the marketplace. If the marketplace runs on Ethereum, fees will be very high (because fees on this chain are always high!). If you pick other blockchains, you can certainly spend less on fees.
How can you create NFTs?
Creating an NFT matches the process of putting your NFTs on sale the first time. This is how you do it step-by-step:
- Pick your favorite marketplace and create your account. Because digital NFT art is traded on blockchains, you are going to need a crypto wallet.
- Inside the digital marketplace, find the selling dashboard.
- Click on sell new NFT and upload your digital art.
- This is where you are asked to pay the fee with digital coins.
- When you have completed this process, you have created your NFT.
How to earn money with NFT?
NFT isn't only interesting for artists or art collectors but also for investors. Many people, however, wonder how they can earn money with NFT if they are not artists. In this section, we're going to find out how to do it. The principle behind earning money with NFT is one of trading goods: you buy a good for a certain price and then sell it at a higher price. Earning money with NFT is even more rewarding because if you have been the owner of an NFT once, you'll keep earning money on that NFT for each related transaction. A crypto investor could purchase NFTs (instead of crypto money as they are used to), wait for the NFT price to rise, and then finally sell it. This is how you earn money with NFT.
Most known NFT marketplaces
As you may have learned in this content, marketplace choice is important for artists, sellers, and buyers. What are the best-known marketplaces for crypto NFTs?
- OpenSea: this is the first marketplace for crypto NFTs, and it's the one with the highest number of buyers and sellers. It's based on the Ethereum blockchain; therefore, fees are extremely high.
- Gleam.io: quite a new marketplace that is becoming very popular.
- Magic Eden: based on the Solana blockchain, this is more suitable for beginners because fees are lower.
- Binance NFT: Binance is one of the world's most-known crypto platforms. It allows you to buy, sell, and earn interest on crypto coins. Recently Binance has entered the world of NFTs with the Binance NFT marketplace.
- CNFT: a marketplace for digital NFTs based on the blockchain Cardano.