Here is how you can make loads of money using NFTs
NFTs are non-fungible tokens that people can buy and sell. After cryptocurrencies, they are the biggest craze in blockchain technology.
They are called “non-fungible” because once they are created, they are practically immutable. They cannot be altered. They cannot be meddled with. Thousands of people connected to the blockchain that controls that NFT need to get involved if someone wants to change the conditions of the smart contract embedded into the token.
India has 1.5 million NFT users – the 6th largest user base in the world. Incidentally, the largest global NFT sale to date – $ 69 million Beeple sale – was executed by a buyer of Indian origin, Vignesh Sundaresan who goes by the username of MetaKovan in the crypto world.
Nonetheless, very few people in India are investing in NFTs even though there are many celebrities, creators and digital artists mining their creations into NFTs with incredible enthusiasm.
One of the biggest reasons why there are many NFT creators in India but fewer buyers is that there is a very limited culture of collecting items for wealth generation. Speculatively buying art and other items of expression haven't really caught on in India, and there are very narrow circles who indulge in the activity.
But it doesn’t mean if you want to make money using NFTs there are few avenues available. No, there are multiple avenues available if you decide to make money with NFTs. Some of the methods are listed below:
NFT Staking
NFT staking is like depositing money in a bank account and receiving interest for not withdrawing it.
People normally invest money in digital art and other NFTs so that when their value appreciates, they can sell them and make money.
In NFT staking, you deposit a cryptocurrency in a blockchain network, and you receive rewards for not selling the NFT while it is staked.
Your stake in an NFT using a DeFi platform through a smart contract in a liquidity pools.
The NFT may have its distinct protocol and you earn rewards based on that individual protocol system. You receive the rewards in the form of tokens from the DeFi platform or another NFT.
Money is earned based on the annual percentage yield that is unique to every NFT. You need to carefully scrutinise the APY before putting your stake in a particular NFT.
Creating, buying, and selling digital art
This is these days the commonest way of making money using NFTs. Real-world art pieces, digital images, GIFs, music, and painting are first converted into NFTs and then sold and bought on the NFT exchange platforms.
These days there are numerous apps available that enable you to buy art directly from the creators.
One caveat is that NFTs are not bought and sold using your conventional currency. It is not like you can take out your debit or credit card and purchase a few NFTs. To dabble with NFTs, you first need to have cryptocurrency. To store and exchange cryptocurrency you need a crypto wallet. A crypto wallet is like PayTM – just as you can deposit money in PayTM and then use it to make payments (or receive payments), you can do the same in a crypto wallet but, with cryptocurrencies.
You can buy NFTs and then wait for their value to appreciate. Then, when you are ready to sell for a profit, you can approach interested parties within your present DeFi platform and sell your NFT. In India, WazirX is one of the fastest growing crypto currency exchanges where you can buy and sell NFTs.
Licensed collectibles
Digital collectibles are virtual products that are minted as NFTs. These NFTs can then be acquired within the designated blockchain. Through the NFTs, the ownership of different virtual collectibles is tokenized – there can only be a single official owner of the token at a particular time. These ownerships can be traded online using cryptocurrency. The ownership of the token is established through the smart contract and the needed programming code is embedded within the contract.
For example, an artist can tokenize his creation and assign the ownership to the buyer using the smart contract. Then that buyer is the original owner of the piece of art. Unless the buyer sells the ownership to someone else, he is going to own all the rights to the piece of art.
Just like in the traditional world, the value of the art piece increases as the artist becomes widely known and the art ownership can be sold to another interested party, for a profit.
Creating NFT designs
You don't need to buy and sell NFTs to make money. If you are an artist or a designer, there are many parties who are eager to hire you for your work. Then they convert that work into NFTs and trade in them. Therefore, you can create your art pieces for money without directly dealing with NFTs and yet, making money off the blockchain technology.
Playing games and watching videos
The biggest benefit of the blockchain technology is the decentralisation of ownership. In conventional gaming when you earn tokens or create environments (for example, creating worlds in Minecraft) their value exists only in that particular game. With NFTs and blockchain technology, you can take your coins and worlds to other games. You can also sell them and make money.
Many organizations are paying NFTs for watching videos. These are small videos and for every viewing session they pay you in cryptocurrencies and NFTs.
The field of NFTs is still at its nascent stage. People are finding various ways to make it more lucrative and meaningful. Social media posts are converted and sold as NFTs. People are being paid in NFTs for performing tasks. You can even participate in surveys and polls and get paid in NFTs.
Ultimately, just like in any other market, how much money you can make depends on demand and supply. Even within this narrow market, profit margins are decided by (again, just like in any other market) for how much you buy a particular NFT and how much the other party is ready to pay for it after a few months or after a few years.