What are NFTs and how do they work?
NFTs, or non-fungible tokens, are unique digital assets that are stored on a blockchain, a decentralized digital ledger that records transactions. Unlike fungible assets, such as cryptocurrencies like Bitcoin, which are interchangeable and have the same value, each NFT is distinct and has a unique value.
NFTs can represent various types of digital content, such as artwork, music, videos, or even tweets. When an NFT is created, it is assigned a unique identifier that is recorded on the blockchain. This identifier, or token, is what makes the NFT unique and valuable.
When someone buys an NFT, they own a unique digital asset that is stored on the blockchain. The ownership of an NFT is recorded on the blockchain, making it possible to prove that a particular NFT is owned by a particular person. This can be important for artists, musicians, and other creators, who can use NFTs to sell their work and retain control over it. In short, NFT is non-fungible token that is a safe and secure digital asset where each piece has its unique value.
NFTs are digitally linked to the original owners, and people use them to make active and passive income. How can you make money from NFT? There are many ways. Here is a small guide about ways to earn money using NFTs.
Ways to Earn Money Using NFTs
1. Create and sell NFTs
Creating and selling NFT is the best way to get started with minting money using them. Before building an NFT, get a clear understanding of different aspects. You should know what a non-fungible token is and the best marketplaces to sell it on. A user can use a number of things, including videos, images, and art to sell them as NFTs. There are many platforms, such as OpenSea, SuperRare, and CryptoPunks, to sell your digital assets.
2. Trade NFT
This is a simple method where you purchase an NFT and sell it at higher rates to make a profit. It is not as simple as it sounds. You should be concerned about different factors, such as the interest of consumers in the NFT and the right time to sell the NFTs. It is important to understand that we cannot rate all the NFTs on one scale. Some NFTs are worth millions, and some do not sell. So, invest in NFTs that can prove to be profitable.
3. Rent out NFT
Many collectors use NFTs to earn passive income by renting them out. The fact that NFTs can be used for long term makes them very profitable. Renting enables you to earn money without creating a new NFT. The ownership stays with you. You can find platforms like reNFT to easily rent out your NFTs.
With the internet in our pockets, people across borders can participate in a game, which makes gaming very popular. There are already some popular games in the market. CryptoKitties is one such game that is known to be expensive. Today, there are games with inexpensive NFTs. You can start to use video games as NFTs that offer in-game items for purchase or other options to earn. NFT video games are advanced as compared to other NFTs such as digital trading cards, making them lucrative and profitable.
This can be one of the most interesting ways to earn money with NFTs. You can earn passive income with your NFTs on all their transactions in the market. For instance, if the NFT is resold to someone, then you can have your share of royalties, and so on. The best part is that the entire process is automated and requires no manual interference from you.
6. Licensed collectibles
Blockchain has brought in new possibilities to earn from NFTs. You can now record and store your collectibles in the blockchain as digital assets and sell them at a profitable price at the right time. Sports cards can be a popular example of a licensed NFT collectible.
7. Stake NFT
You need to lock your digital assets in Decentralized finance protocols (DeFi) Smart contracts to generate a yield, which is referred to as “staking.” Basically, we keep our digital assets at stake in return for a reward. You can use different platforms, such as Only1, and Kira Network to stake your NFTs.
8. Investment in NFT startups
With the huge potential of NFT, it would be a wise move to invest in NFT startups. New technologies like Blockchain open doors to new possibilities. The wide range of applications in different industries is also boosting the growth of NFT ecosystem.
With investments pouring into NFTs, the ecosystem is bound to develop and grow. In the future, there can be more options to make money using NFTs. The listed ways of earning money with NFTs can help you stay profitable. The best part is that you can use anything as NFT. Start your research and consult NFT experts to build NFTs that bring you long-term income.