You have heard the term NFT. It's all over the internet: YouTube, Twitter, Blogs, Vlogs, and every place you could imagine. I never thought these strange NFTs would explode in popularity like this. I was wrong.
What's an NFT?
NFT stands for non-fungible token. If that doesn't make it clearer… you're not alone. I had no idea what NFT meant. Until recently.
An NFT is a digital asset that is not mutually interchangeable. It has digital ownership with proof of authenticity. In essence, it is some sort of digital good that is unique. This explains the early use cases of NFTs: digital art.
To further explain what an NFT is, or rather to simplify it, let's look at two analogies for NFTs.
All of us remember the good old days when trading card games were all the rage. They're trending again right now. But that's the topic for another story.
NTFs have a similar appeal to trading cards. Let's use Pokemon for example. A pack of Pokemon cards wasn't too expensive back in the day. But the rare cards did jack up the prices. This is no surprise, the rarer the card, the more money a collector would pay. Today a pack of original Pokemon cards can be sold for as much as 40,000 dollars. Not a bad investment. If only I had known this a couple of decades ago…
Hello, NFT! Those little tokens could very well be the next trading cards. The difference is: You can already make a ton of money with NFTs right now. You don't have to wait for the collectible value to skyrocket. But you'll need a little luck.
The second analogy I have for NFTs is art. A great painter like Leonardo da Vinci probably didn't expect the "Mona Lisa" to become a piece of art with an unprecedented amount of value long after his death. Or maybe he did. The point is: Art is unique. A painting might be worth a fortune very soon or far in the future.
An NFT can be a digital form of a painting. You can market your art as a digital collectible and one day become as famous as Leonardo Da Vinci. Just imagine, being the Leonardo da Vinci of the digital age. Okay, let's stop dreaming.
These NFTs have certain advantages over paintings: They can't be faked or recreated (as far as I understand). They're uniquely yours and come with proof of authenticity, as stated before.
NFTs are built on a blockchain, that's why they can be called cryptographic tokens as well. They operate on a cryptocurrency standard, in this case, it's the Ethereum blockchain. That means that the price or value is presented in Ethereum (ETH), with a converted dollar value next to it. This dollar value depends on the current conversion rate. At the time of writing this, 1 ETH is worth around 1,800 dollars.
Now, you might be wondering: How can I create an NFT and where do I sell it? NFTs have several popular marketplaces, the top one is OpenSea. On Opensea you can discover, buy, and sell rare digital items, mainly NFTs. I am still learning this process, myself. I can't give you a whole tutorial just yet. Other popular platforms for NFTs are Rarible or Nifty Gateway.
What to create
An NFT can be almost anything in digital form. As discussed above, it can be a form of digital art: like an image, a digital painting, a picture, animations, or a video. It can even be a music piece. Or an in-game asset if you're a gamer. It can be anything. This means there's a chance for every creator to come up with a great idea for an NFT.
The NBA, for example, has started creating its own NFTs in form of the greatest plays in basketball history. These sell like crazy which quickly resulted in a huge second-hand market for those collectibles as well. Just to give a real-life example.
Logan Paul made 1 million in 30 minutes
The first story about NFT I read came from the famous internet personality, Logan Paul. He started big with Vine back in the day and is now famous on pretty much every social media platform. So he has a unique advantage here, of course: Tons of followers.
Anyway, Logan created its NFT with 3,000 copies to sell. And marketed those on social media. Within 30 minutes, his NFTs that sold for 1 ETH - which at the time was almost 2,000$ - had earned him 1 million bucks. But that's not all: Within one day, he sold 1773 NFTs. That's around 3.5 million dollars.
Small creators can earn a lot
You're probably thinking now: Sure, Logan Paul has millions of followers. No wonder, he made money with that. While that's true, it is still very possible for any creator or artist to make money with NFTs. It doesn't hurt to try. Especially if you utilize the bidding option that most marketplaces offer.
I've seen small creators with a unique idea making hundreds or thousands with their first NFT. A person named Lumi on Makersplace just at the moment of writing this received a 400$ bid on one of their NFTs. A nice amount of money for a single design creation.
Should you consider NFTs
To the big question: Are NFTs something for you to consider? I'd say, heck yes! If you're a creator - an artist, painter, designer, musician, gamer, or someone who just likes to try anything - the world of NFTs is all yours. This new business is booming at the moment. If you hit the right vein, you might be successful. And if not, there are still other great options to profit from NFTs.
Invest while it's hot
If you're keen on investments, have a little money on the side, or are just eager to take a risk, you could invest in NFT platforms like Nifty Gateway, OpenSea, or Rarible, as they're booming right now. The bubble will burst at some point. Most likely. But not today.
Get your hands on rare NFTs
Even if the bubble pops someday, NFTs, in general, are here to stay in my opinion. Therefore, investing in some rare or sought-after digital collectibles is another way to earn money now, and even more so in the future, just as I mentioned about Pokemon cards in the beginning. If only I knew… But now we do know! Those NBA NTFs will become massively valuable collectibles in the future. Some already sell for thousands of dollars apiece.
If nothing else…
You can write about NFTs as I do here! Make a video on that topic, or even create an online course about NFTs. This is a new market, the majority of people don't get it just yet, even though NFTs have been around for quite a while. A trend that's worth looking into, in my opinion. I am going to try NFTs and maybe I'll give you an update on this in a future article.