Here’s why you shouldn’t ignore the NFT hype

NFTs are proving to be more than just a flash in the pan. You may have heard of NFTs either through blockbuster news pieces like Everydays by Mike ‘Beeple’ Winklemann which sold for $63 million. Or maybe you’ve seen how UAE-NFT has celebrated the 50th anniversary of the UAE with a limited series of digital artwork?

However, a lot of people struggle to get their heads around the actual concept of unique ownership. In this article, we want to pull back the curtain and show you why NFTs aren’t just a fad and how you can make money in this exciting market.

What are Non-Fungible Tokens (NFTs)?

Breaking down the acronym is the best place to start. NFT stands for non-fungible token. In short, this means that the asset is unique and no copy of it can ever be exactly like the original. Imagine a rare painting, like Van Gogh’s Sunflowers, it doesn’t matter how good a copy you make or what you print it on – it will never be the original.

Token just means digital item. Most commonly these are drawings and this is what most people associate with NFTs. But it can be anything such as music, code, or even a special edition digital bike render. Anything digital can be an NFT. More and more the lines are blurring and how NFTs can exist in the real world is becoming hotly debated.

Digital products/assets/art/whatever you want to call them can be copied easily, instantly, and with no loss of quality. So creating a replica of an NFT is easy, but the one thing you cannot copy is its history – i.e. who created it and who has owned it. Only with that information can any NFT be truly unique.

Because of the blockchain technology that NFTs are built on, checking the history of any digital asset is easy and at the same time – impossible to fake. This solves a lot of the traditional problems people find with ‘real’ art.

Why are NFTs worth your time?

Well, with a market capitalisation of around $23 billion (at the time of writing) there is a whole lot of value ready to be tapped into. The great thing is that it’s not difficult to get started because many of the most popular platforms are tailored to beginners.

Also, there are a vast number of free resources at your fingertips that you can use to build your knowledge as you go. Starting a business off the back of NFTs can begin with a really small investment and as you grow your knowledge, your investment can follow.

You’d be forgiven for thinking that the current market cap is just made up of lots of independents. While the majority of all NFT trades and businesses are to individuals, big companies are already well seated on the bandwagon. Names like the NBA, Coca Cola and Emirates Post are already in the swing of making sales and pushing their brand with the use of non-fungible tokens.

With the recent announcement of the Metaverse crypto and NFT enthusiasts everywhere are on the edge of their seats, waiting to find out what sort of potential there is in this new digital world to profit from the blockchain – maybe it’s your time to do the same?

5 ways to make money from NFTs

Now comes the part where we give you some real insight into turning a passing interest in NFTs into a money maker – or even a fully-fledged business. These aren’t the only ways to make money but they’re a good starting point no matter the scale of your skill/investment pot.

Create and sell NFTs

The most obvious on the list. Why not create a digital asset and then sell it? Perhaps you have an artistic flair, or an eye for a great photo and can transfer that to an NFT? If you can channel any sort of creativity then you can make an NFT and sell it.

There are a variety of NFT creation platforms such as Mintable and they’ll make getting started really easy. There are a few starter steps such as setting up a crypto wallet (where you store your cryptocurrency) and then just the standard verification process that you’d find on other websites where financial transactions are made.

Once you’ve made an NFT you’re ready to put it on the market. A quick google search will throw up all the big names, but OpenSea and Rarible are some good examples. After a small fee to list the NFT, you’re ready to start increasing your income.

Trading NFTs

Not so creative? Have an eye for market trends? Then trading NFTs is going to be a great start for you. Just like any ‘real’ asset, the idea is to buy low/sell high. This can be done through tracking trends on the NFT you’re interested in, or looking at the wider scope of how popular the creator of that NFT is.

Go to any of the platforms we have already mentioned, search for the type of NFT you want –?like art or a video clip – and then you can start making offers to buy.

As with any trading activity, there is an inherent risk. Because NFTs are new and rather volatile you’ll want to do a good amount of research before you pull the trigger. There is such a sea of NFTs that aren’t worth your time, so it pays to be informed.

Stake NFTs

One of the key parts of crypto is the ‘proof-of-stake’ model. In short, users on the blockchain networks validate transactions between parties using ‘staked’ cryptocurrency. This means that everything that happens on the network is confirmed, recorded, and then fully traceable. It’s the reason that NFTs can’t be faked.

The users who validate these transactions, often called miners, dedicate their crypto resources to make this validation possible. In return, they are often given passive income?– in the form of the native cryptocurrency –?while their assets are being used.

Take Axie Infinity: a game where $3.6 billion has been traded in just under 4 years. All those trades have been validated by users staking their own crypto on the platform. If you have a pot to invest, then consider the different staking options available with NFTs. Most of the current opportunities revolve around games which we’ll touch on next.

NFT games

No need to overcomplicate this one. NFT games are any game that uses NFTs as a tradeable asset within the virtual world. These NFTs might be stakeable, shareable, or just plain sellable and in trading them you can unlock new items and abilities for your character – as in the case of Cyberclassic

With in-game purchases and micro-transactions having become the de facto model for modern video games, especially those on mobile, NFTs and crypto are currently becoming a way to make this even more accessible.

Very often in classic games, developers will create their own in-game currency that you can buy for FIAT. Well now, we’re seeing that completely replicated by blockchain developers – think Crycash.

Maybe you aren’t interested in playing video games and earning rewards in the way of NFTs. Well, then why not set up your own game studio? The UAE is one of the world's hotspots for tech talent – so take advantage.

Back NFTs with liquidity

If you find that your interest is purely from an investment angle then backing NFTs with your own cash is another path you can take. Much like trading, it’s going to require a good amount of research to be successful, but there certainly are opportunities available to the savvy investor.

Once again leveraging the advantages of DeFI (decentralized finance), an investor can add their investment to a shared pool backing NFTs. In return, they receive a token. If, for example, you are using Ethereum as your platform this would be an ERC-721 token. This token represents your investment and whoever owns the token can claim back the investment. This means it’s important to have a good handle on how you look after your digital assets.

Whenever you want to sell your part of the NFT you can liquidate your investment and reap the rewards. Unlike other FIAT platforms, you’re never limited by trading hours so you can make a move whenever you want.

Final thoughts

NFTs, as part of crypto, are a rapidly evolving technology that we haven’t even scratched the surface of yet. There is currently a big boom surrounding them and this gives you an opportunity to start developing your own business and income from them.

We’ve only covered a few of the options today and because of the rapid change, in 6 months' time, there’s likely to be a whole host of other ways to build in the space. Whatever you do, make sure it’s backed up by a lot of research – starting a business starts with a plan.