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WHAT IS NFT AND HOW CAN IT BE A GOOD BUSINESS OPPORTUNITY
What is NFT and how can it be a good business opportunity?
When the first cryptocurrencies appeared, people were skeptical about whether or not they were a good idea and whether they would ever survive.
Here we are about ten years later, when certain cryptocurrencies have reached enormous value. Some are still skeptical, and some are looking at how to get into that circle and play.
There are several ways to get cryptocurrency:
- Crypto mining, which requires investment in serious equipment and mining sites, and the result is quite uncertain.
- Buying cryptocurrencies on the stock exchange as the simplest way, where in exchange for money you get the equivalent in cryptocurrency
- Making crypto money by selling or reselling something.
This is where NFT comes into play as a good business opportunity that should not be missed.
WHAT IS NFT?
NFT stands for non fungibile token.
What is that fungibility in general?
When one thing is easily interchangeable with another, we say that it is fungible. For example, you will exchange a 5 cent coin without any problems or thinking with someone for the other 5 cents, because it is fungible. However, if it was a unique copy of that coin, something special and therefore more valuable, you would not replace it with another 5 cents. Then he is not fungible.
NFT is a digital product or token that is tied to a blockchain. The most common blockchain is Ethereum, although there may be others (Polygone, Solana). The cryptocurrency Ether is tied to it.
NFT is unique and therefore unfungible. There is no other one like it that is its equivalent. Confirmation of its uniqueness is digitally written in the form of a blockhain. We can say that NFT is a digital certificate or license that proves the uniqueness and authenticity of some digital work.
NFT can be any digital file.
For example:
- Photography,
- Graphic design,
- Gif,
- Text,
- Tweet,
- Video,
- Domain name…
The video on Youtube can be NFT.
And how can that make money now?
NFTs are traded and in some cases they are sold and bought for serious money. This is actually a good way to, if you have a good idea, earn a serious amount of cryptocurrencies. The price that NFT can reach is determined by the market or demand.
Why would anyone buy NFT if it is an ordinary photo that literally anyone can download and copy it, or a Youtube video that anyone can watch, a tweet that anyone can read, rewrite, and retweet?
Well, for the same reason why someone would buy let say the Mona Lisa portrait if it was for sale. It would certainly cost enormously, and realistically, it is not that there is a some overriding need. There is more need here to have something that is exclusive.
HOW TO MAKE MONEY FROM NFT?
You can do this in the following ways:
- As an author – by creating NFT and selling it.
- As a collector and investor – by buying NFT, and then reselling it at a higher price, which carries with it a certain risk (or simply keep it in your collection, if that is your motive).
And the following examples tell you that you can make serious money:
The most expensive NFT is sold for $ 69.3 million, and it’s a collage of everyday photos by a Florida graphic artist called “The First 5,000 Days.”
Among the 5 most expensive NFTs are as many as 3 cryptopunks, avatars the size of 24 × 24 8-bit pixels. The most expensive was sold for 11.7 million dollars. It is a collection of 10,000 stickers, each unique. They resemble each other, but some are considered very rare, less similar to others. Owning a cryptopunk has in a way become a matter of prestige.
Jack Dorsey, one of the former owners of Twitter, sold his first tweet for $ 2.5 million. Yes, that tweet is still on his account and anyone can read it, but only one person is the exclusive owner of this tweet and is not the same as the person who wrote that tweet.
Sounds absurd to buy these things for this much money?
Wait, the thing gets even more absurd.
When you buy NFT, you can’t actually own it physically, because it’s a digital format. Almost anyone can copy it, download it to their computer, take a screenshot, watch a video, read your precious tweet or read an article that is NFT.
But those are all copies.
You do not have any exclusive copyright to this work, but you have a certificate and proof that it is unique. And that work can be worth a lot.
HOW TO INVEST IN NFT?
These dizzying figures above may not be available to you, but not all NFTs have such prices. Some are cheap, but may have the potential to become more expensive.
To sell or buy NFT, you first need a crypto wallet on which you will have deposited money or cryptocurrencies. One of the most commonly used is Metamask. You can download it as a phone app or as an add-on for your internet browser. NFT is mostly bought for a cryptocurrency called ether – which means you need to deposit these funds on your wallet.
Things get complicated when you need to find the right NFT to invest in.
If something preserves the value of your money or increases it – that is a good investment. If you just buy something and it becomes worthless and creates a cost for you – that is not a good investment. Not every NFT is a good opportunity and a good investment.
HOW TO ASSESS WHETHER SOME NFT IS WORTH THE INVESTMENT?
Investing in NFT, like any business, needs to go through some research. It is important that you consider the following:
– Your interest
First of all, you need to invest in NFT that you like. It will be much easier and more engaging for something that interests you than for something that does not interest you at all. And believe me, you need to get involved.
– Interest of others and communities
If there is no interest in some NFT – then it has no value and you will not be able to sell it. This is a very slippery terrain, because this market is quite unstable, driven by some current trends. What can have a flood of interest today and be a total hit, can completely lose its audience tomorrow and become worthless.
A good NFT project brings together people who follow it and who make up one community. That community needs to spread a positive attitude about the project.
Social networks, especially Twitter, are a place where people interested in a certain NFT project gather. There are also media such as Discord, which enable the creation of such communities around some interest, so you can also check on them whether an NFT project that you have cast your eye on as an investor gathers a large community.
If there is no community, it means that there is no interest in this NFT project. In other words, you will not be able to sell it to anyone tomorrow and earn money.
– Trade volume
Check which NFT projects have the largest volume of trade. For example, OpenSea, the place that is perhaps best known for NFT trading, gives you an insight into which NFT projects are the best-selling and at what price.
If the project you are interested in is not traded much, then it is a sign to be very careful and think carefully about the investment. I’m not saying it might not pay off – but it’s a bigger risk.
On the other hand, the fact that something is currently popular does not mean that it is risk-free. That is why it is important to follow the communities and what is said in them, whether they are active or stagnant, whether the conversations are positive or vice versa.
– Project
An NFT project usually has a theme on which the whole collection is based and can have several tens of thousands of elements. For example, the aforementioned Cryptopunk has 10,000 collectible thumbnails. It is similar with Mutant ape yacht club (which is a collection of some monkeys), then Doodles, Cool Cats…
Check how many copies there are, how many already have their owner, whether they are traded and to what extent, whether the project is new (and therefore harder to pave the way for it) or has already existed for some time (so you go along the already paved path) .
– Author
By investing in some NFT you are actually investing in some person or team behind a particular project. And that is an item that needs to be studied. It’s not the same to buy a tweet from an anonymous person (as good as it is) or a tweet from Elon Musk.
It’s the same with teams, because collections usually need a team of people. Check if the team has had any previous success or is completely new on the scene, what is their status in the company. It is clear that these parameters should be as good as possible.
– Rarity
The value of an NFT depends to a large extent on how rare it is. So, you should take into account the way the authors or the team try to make some NFT rare and worth owning.
And how do you know that?
In fact, when you dive into this world, you will see that there are many tools for the NFT trade. Rarity tools is one of them that will also reveal this information to you.
INVESTING IN NFT AND RISK
Buying and selling NFT is quite risky and by no means don’t invest money you are not willing to lose. NFT is not an overly liquid investment, and just because you bought it easily, doesn’t mean you can easily sell it and exchange it for money.
It doesn’t matter if the NFT is really an artistic value by your standards. Maybe not. It is important that there is interest in him, and if you want NFT to be an opportunity for you to earn money, then that is what you should be guided by.
HOW TO SELL NFT AS AN AUTHOR?
Although you may now think it’s simple and you’re already imagining spending money on that tweet you posted and rubbing your hands because you made an ultra-funny gif – slow down little bit. Let’s return for a moment to the reality in which money does not grow on a tree, and cryptocurrencies do not fall like digital rain.
But it is not impossible to make money. In fact, this option is easily available to you.
Where to start?
The first thing is to determine the place where you will sell NFT. Although there are several, they all work in a similar way:
The most famous are:
- OpenSea
- Rarible
- Crypto
Some NFTs are also sold at auctions. Tweets are bought and sold on the site: Valuables by cent
Let’s take OpenSea as an example.
The thing is more or less simple at first look. Open an account, connect your crypto wallet (Metasmask mentioned above) to it. By clicking on the “create” option, you can place your masterpiece as NFT on the site.
Insert your NFT, fill in the fields (name, description, starting price, sale deadline), and determine the blockchain on which it will be. Ethereum requires a gas commission of about $ 110 (which you should initially provide on your wallet). If you tie it to Polygon, then this commission is not paid. You should then list your NFT for sale by clicking on the “Sell” option.
The next steps are to confirm the permits and transactions in Metamask and that’s it – your NFT is ready and attributed to you and put on the list.
And then it starts tangling…
Just as you can’t make a product and expect everyone to go crazy for it and start buying it, so you can’t expect millions here just because you exist. The probability of that happening is just pure luck.
It is clear that NFT should be made to be a good investment. This means:
An author needs to have credibility (or at least the potential to build it, for starters)
- A project should be well thought out around which a community of people with the same interests will gather.
- A project should be well thought out around which a community of people with the same interests will gather. For example, by selling you prevent world hunger, fight against GMOs, for women’s equality, abolition of zoos, gather youtubers, people who love diving… whatever gathers a certain number of like-minded people who would achieve some goals by buying NFT.
- Build community. This means actively participating in discussions, spreading the story of the project on social networks and on the Internet, and outside it, and raising interest in the project.
If it’s not visible, if it doesn’t have a good story around it – it won’t sell. A good project should gather at least 10,000 followers on Twitter and Discord. Active ones.
As you can see, it is not enough to just install NFT, but you need to work on its marketing and visibility. Like any business, NFT should have its own goal, mission and vision, and the branding of the project should be worked on.
AND IT'S SERIOUS BUSINESS!
The best way to get into this story is to start by following #nft on Twitter and gain insight into events and trends. What I have written is just a starting point and just the beginning from which you can begin your consideration to make NFT a business opportunity for you. It is up to you to explore further.
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