WHAT IS NFT?
Non-fungible tokens (NFTs) are cryptocurrency assets on a blockchain in which each token is unique. Unlike cryptocurrencies such as Bitcoin, Ethereum, NFT cannot be exchanged but can be used as Art. Hence the word Non-Fungible. They can be bought on the NFT market and can get tracked on their blockchains. NFTs are created by uploading a file to an NFT auction market which produces a hash of the file on blockchain as an NFT and can then be bought and resold with cryptocurrency. NFT usually has very little data stored in it. But it contains details which are links to where Art about it is preserved. As an NFT buyer, you do not have exclusive access to the work also, the original file will not be in your possession. Anyone can upload an NFT work. You do not necessarily have to be the original artist to upload a file. Even though NFTs would be favored for their authenticity, over a hundred copies can be made from it and then sold.
The NFTs artwork possesses similarities to autographed works because of its uniqueness. NFTs can be offered as collectibles in a digital form. Several popular brands have used NFT over time. In 2019, Nike created a system that would use NFT called Cryptokicks to verify a shoe's originality and translate virtual versions to customers. Nike's works proved that NFTs are not for digital arts only. They can also be used for regular utilities like;
Video games, 3D images, 2D images, event tickets, blog articles, cards, tokenized assets that aren't virtual like lands, buildings, music
Although there have been serious controversies about the use of NFT due to its high energy burning during blockchain transactions, NFTs are still very much in use today.
There are several ways you can make money with NFT. Let us start by showing you how to create an NFT.
How To Create An NFT
The technical word for creating an NFT is "minting" it. To create an NFT, you should:
Select your token standard- you can either use the ERC721, the token standard for the Ethereum blockchain, or ERC1155, the Enjin blockchain. The Enjin blockchain is very complex because of its properties which can allow for the creation of several NFTs. It also works well for the specification of NFTs. There are other blockchains that can be used like;
Binance Smart Chain, Flow by Dapper Labs, Tron, EOS, Polkadot, Tezos, Cosmos, WAX
Make sure you install a browser that uses any of the blockchains you select. Each blockchain has its own NFT standard, wallet service, and marketplace. For example, if you create an NFT with a Tron blockchain. That means you can only sell them on platforms that support Tron. This means you would not be able to sell them on platforms like VIV3, a flow-based marketplace or Open sea, an Ethereum based marketplace.
Since Ethereum is the most used and has the most extensive NFT system, it's advisable to install an Ethereum browser like Trust Wallet, MetaMask, or even Coin base.
Buy Ethereum. Depending on the browser you're using, you can buy Ethereum in several ways. You can purchase using the Luno app. Buy about $50-$100 worth of Ethereum.
Connect your wallet and upload the file you want to turn to an NFT– there are 3 Ethereum leading marketplace, they are;
OpenSea. - OpenSea is currently the largest Ethereum NFT marketplace, and here's how it works ;
- Click on the create button
- Connect your Ethereum based wallet
- Enter wallet password
- On the create button on your right, select "my collection".
- Add a name and a description of the file you want to upload
- Insert an image for your collection
- Now click on the "add new item" button. You'll reach a window where you can upload.
- Upload your image or file.
- OpenSea has the option to include special traits in your NFT so include whatever you want to.
- Once you're done, click on the "create" button at the bottom and sign another message in your wallet to confirm the creation of the NFT. The artwork should appear in your collection when you check.
What does it cost to create NFTs?
To create NFTs on OpenSea, it costs nothing, but on some other Ethereum based marketplace, they charge a fee known as "gas" fee. The gas fee is simply the amount in Ethereum you would need to perform certain functions or carry out certain transactions on the blockchain. The gas fee depends on the network and traffic congestion. The more the people transacting at a time, the more the gas fee and vice versa. It's advised to conduct transactions very early during the day or late at night. The gas fee is also considerably low on weekends.
How To Earn With NFTs
You can earn with NFT by either buying or selling NFTs on several marketplaces.
Buying And Selling Of NFTs
* How To Buy–
There are certain things that you need to consider before rushing to buy NFT;
- The marketplace you intend to buy It from
- The wallet you would download to connect with the platform and buy
- The cryptocurrency you would use to fund your wallet and buy NFT.
- If the NFTs are being sold at a certain time
Certain NFTs are not as available as others. You would have to buy them from specific platforms. You will need to create an account with whichever platform such NFT is and try to determine if it's sold out. NFTs such as these are usually scarce. And are only available for a specific period. The "pack and art drops" system is used for really short NFTs, and it helps generate more money. So buyers would fund their account prior to the availability of the product and then try to buy it once it's available. This is because pack and art drops tend to end quickly. And it can be over in less than a minute. There are several NFT marketplaces all over the world. Here are some of them;
OpenSea, Rarible, Nifty Gateway, Axie marketplace, Super rare, VIV3, BakerySwap, Foundation, NFT ShowRoom.
* How To Sell–
To sell your NFTs, you have to locate the "my collections button", click on it, and then click on "sell". When you click on this, you will be taken to a page for pricing where you can determine whether to run an auction or simply just sell at a fixed price.
You can sell your NFTs for Ethereum or any other cryptocurrency like Bitcoin. Although some platforms only support tokens, they are based on. So you can sell for the platform-based token.
Royalties allow NFT creators to earn a commission, thereby generating a standard income every time the asset is sold to a different person. This has the potential to create passive income streams for artists and other content creators automatically using a smart contract for life.
On some platforms, there might be a need to pay a certain fee in order for you to list your NFT.
What are the Problems with NTFs?
As with any new technology, NFT has its own downsides and drawbacks. They are:
Theft: Due to the lack of restrictions on copyright, there can be a significant theft issue. Artists and sellers can find out that their Art is on a marketplace and sold without their permission or knowledge. In the art world, however, the owners of NFTs (which, in most cases, are digital artists and fine artists) have very little control over how and where their work is sold. The primary value of NFT is that the proof of work makes sure that your original piece has a unique token attached to it, which means that the owner knows that they have the 'original'. But the main problem is that someone can take a JPG and upload it on a different platform and then claim there's no original copy. To avoid theft or being ripped off, artists should dig into platforms that actively promote original work and curate the pieces they sell.
Money flows barriers: it is harder to move money around with NFT.
Environmental Restrictions: operating in the same environment and platform becomes outdated. Artists would need a better way of making sales and getting paid. The whole Ethereum decentralized system works well enough but takes time to be activated. Also, electricity and carbon burned to complete a transaction is really high and might cause environmental health issues.
NFTS has been sold for far costlier prices than other techs. These are the 3 most expensive NFTs ever sold:
- February 25, 2021, Trevor Jones sold 4,157 editions of his painting Bitcoin Angel for $777 each over just seven minutes.
- Mad Dog Jones topped Beeple's December drop when two open editions NFTs brought in $3.9 million, selling for $2,500 and $5,000 apiece.
- Claire "Grimes" Boucher entered the NFT arena with splash, dropping "WarNymph Collection Vol. 1,". The entire series was sold out within 20 minutes.