How You Can Profit From The NFT Craze
Before you can successfully invest and profit in a consistent manner with NFT, you should set aside time to UNDERSTAND fully what you are investing in and how you can profit.
The last thing you want to happen is getting stuck with a bunch of Beanie Babies following the crash that craze had back in '99. "Investors" drove up the price, bought up huge amounts of inventory, then interest faded, and the value crashed.
All the signs were there of a crash coming, but they were mostly ignored.
In this article, you will understand the NFT market, how to set up an account to buy, how to spot the right NFTs, when to sell, and most importantly, the signs to completely dump your portfolio of NFTs, and take your money and run!
Let's get started.
What Is an NFT?
An NFT (non-fungible token) refers to an asset that you, and only you, own in digital format. It's not a real tangible thing that you can hold in your hand. It can be anything from a photo of your dog, a digital work of art, avatars, and even music. It can even be event tickets or an exclusive video of a music album. Anyone can own the NFT, and it can be distributed and sold in different ways. The best part about NFTs is that anyone can create them; all you need is a digital wallet and a connection to an online marketplace.
As the number of digital items grows worldwide, NFTs are becoming more popular for companies and individuals to raise funds both privately and publicly. The development of new technologies enables individuals like you to create, sell, and buy a range of unique, valuable assets, such as art, music, and sports tickets. In addition, since the creation of NFTs uses blockchain technology, anyone can review the contents of an NFT's chain and verify the ownership.
An NFT is a unique digital asset that can be bought and sold online using cryptocurrency. It is a certificate that identifies the owner of a digital asset. Like a stock that trades on an open market, the worth of the NFT is not determined by the actual value of the NFT but the perceived value. This is an important distinction you must not only understand but accept.
Remember collecting sporting cards (baseball, football, etc.) as a kid and getting the Beckett Monthly, which showcased the worth of card sets and certain individual cards? I remember meticulously tracking the worth and how I was filled with excitement to see the worth of my collection growing each month until one day, reality struck me hard.
My father drove me to a card dealer shop with my entire collection. It was worth just over $8k. I can still remember the musty smell of all the aged cards when I walked in. This was my huge payday, and I was going to prove my father wrong by spending all the money I made mowing lawns buying baseball cards. After perusing my vast collection, the stained t-shirt wearing shop owner blurted out, "52 bucks."
I brought my notebook with all the data from Beckett written neatly and showed the total of $8k. "Kid, that magazine is worthless. It doesn't matter what the cards are worth; what matters is what people THINK the card is worth."
And that was the first of many tough lessons I would learn about investing, but this was no doubt the best lesson. An asset's value on the books means nothing. What matters is the cash someone is willing to depart with to acquire your asset, and coming full circle, this is exactly why the Beanie Baby market crashed. Very few bought the collectibles at the high stated value, and when the inventory sat on auction sites such as eBay, the prices came crashing down.
By following the advice here and other places I recommend, you won't go through what so many have over the last few decades and probably centuries, with fads driving prices to unrealistic amounts.
These NFTs can be bought and sold by people or businesses worldwide. Then, the owner can sell the token to other investors or collectors. And, the selling party can keep the money in their digital wallet.
How Is an NFT Different From Cryptocurrency?
The first question to ask yourself is, how is an NFT different from a cryptocurrency?
An NFT is a form of non-fungible asset, a digital asset that you cannot exchange for an identical item. A common example is cash. You can trade a dollar bill for another dollar. Likewise, you can swap a ten-dollar bill for two five-dollar bills and receive the same value. An NFT, however, is not a fungible asset. These items are unique and have a monetary value. Examples of non-fungible goods include:
An NFT is not a cryptocurrency. It is a digital asset with a digital signature.
The value of an NFT is untradeable and cannot be exchanged for physical money. In contrast, the fungible nature of cryptocurrencies makes them easy to trade. Hence, a person can buy an NFT, but it can't exchange it for actual cash.
An NFT is an asset that is unique in that its creator can sell it on the internet. Unlike cryptocurrency, people use NFT for the purchase of digital assets. Its creator can sell it to anyone, which means it has the power to transfer ownership to other parties. Its value is similar to a commodity, but it does not have the same characteristics as a cryptocurrency.
The essential difference between an NFT and a cryptocurrency is that an NFT is one-of-a-kind. It makes NFT more valuable than a cryptocurrency. The differences are also visible to the public. An NFT can be a digital or physical asset, and you can manipulate them. Embedded metadata is what makes NFTs unique. Its digital counterparts are traceable and can be traced quite easily.
What Are NFTs Used For?
One of the best-known uses of NFTs is as a form of payment for goods and services. This cryptocurrency has been around for many years now. However, the rise of Cryptocurrencies has made them even more desirable.
These digital collectibles are not limited to digital artwork. They can also be used as currency. People can attach an NFT to any intellectual property by using a blockchain. The value of an NFT depends on its market price, which is based on its uniqueness. However, NFTs are more than just an investment. They can be bought and sold like other forms of art. And since NFTs is a digital asset, they are easily transferable and tradeable.
How to Buy NFTs
To buy NFTs, you will first need to purchase the Ethereum (ETH) cryptocurrency. This is an open-source operating system and computer programming language that are a popular choice for many digital currency users. ERC-721 compliant contracts are used to mint NFTs. Then, they are deployed to the Ethereum blockchain, which is considered the "gold standard" for cryptocurrency transactions. Once you have enough ETH, you can buy and bid on the various NFTs available on marketplaces.
Once you've made your initial purchase, you can continue browsing available inventory. Most NFT transactions occur in a dedicated marketplace powered by the Ethereum network. You will need to have Ether for buying NFTs. You can purchase Ether using Binance or WazirX. If you don't already own Ether, you can visit several online marketplaces to buy it, and I list many below to help you get started.
Creating a cryptocurrency wallet is the next step in buying NFTs. To make a purchase, you need to deposit ETH into your digital wallet. After you've added Ethereum to your digital wallet, you'll need to choose an appropriate NFT marketplace. You can visit various NFTs marketplace including:
Then, you can buy and sell your non-fungible tokens.
Popular NFT Marketplaces
There are several popular NFT Marketplaces out there. You should learn about these sites to know how they work if you're new to crypto beyond what I explain here. Many of these sites offer similar features and can be an excellent choice if you're looking for something that doesn't involve a middleman, which is not recommended as the fees they charge are hidden amongst inflated signup requirements. There are a lot of cons and scams out there and a lot of people fall victim, as they are blinded by the fortunes they have heard which have been made with NFTs.
The first thing to do is to sign up for an NFT marketplace. You'll need to register to get started, but the process is straightforward. Just head to the site you want to use, create an account, verify your email, and then login.
Depending on what service you use, once you've setup your digital wallet, you'll need to confirm every transaction for a time. You can buy and sell NFTs with various options once your account has been approved and verified. You can choose to trade for digital art or collectibles and you can even mint them and sell them for cash!
OpenSea: is another popular NFT marketplace. Opensea was founded in 2017, and the owners are located in New York. This site offers a wide variety of digital objects in their inventory. Advanced search features, interesting statistics, and the ability to import other NFT marketplaces will also help you find the perfect digital product you want to invest in. The OpenSea platform has a unique design and allows you to create your own NFT. It is an excellent option for those who want to add a unique item to their collection.
Rarible: is another popular NFT marketplace. Anyone can create an account and list a digital item. To be verified, you'll need a small tick next to your profile picture. While most people use Rarible, there are still some scammers out there. Be wary. It's recommended to do a research on the seller before you purchase on this or any site. There are hundreds of thousands of NFTs on Rarible, and you can find just about anything from art to collectibles to gaming items.
Axie Infinity: is another popular NFT marketplace. Axie Infinity has more than 19,000 monthly users and over $6400 ETH in revenue each month. Interestingly, a plot of land in Axie Land was sold for 888 ETH or about $1.5 million. It is an excellent example of how to use an NFT marketplace. Axie Infinite is another popular NFT marketplace.
Should You Buy NFTs?
If you're thinking of investing in NFTs, you probably have questions about the value of these tokens. The price of NFTs depends on how much they're worth to someone else as I explained with my baseball card collection example earlier in the article.
The value of NFTs' will depend on demand.
In other words, if you have a lot of NFTs, the market will be high enough for you to sell them. However, if no one wants to buy your NFTs, you'll likely get less than you paid for them. And often, far less than you expected.
NFTs have a unique value. Their price is determined by what someone else will pay for them. While iMessage app stores are known for their limited quantities, NFTs have a limited supply and may have only one owner. The scarcity of these tokens encourages potential buyers to buy them because they worry that someone else might get the item first. Thie behavior can make prices skyrocket, but understand that these types of moments are rare. Moreover, some NFTs can balloon in value, and you may have to pay a lot of money to get a piece of it.
Advantages and disadvantages of investing in NFTs
There are many advantages and disadvantages to investing in NFTs. Besides being an excellent asset for investors, artists and buyers can use NFTs to sell work that has no real market. For instance, if you have a digital sticker idea, you can't sell it on the iMessage app store. You can use this method to sell the idea and earn a percentage of the profit. If you think you have a good idea, you should buy NFTs.
Although NFTs are new, they're a good investment for the right investor. They don't wear off and aren't affected by weather or physical pressure. And you could even make millions of dollars with them. Some people have bought NFTs and made millions of dollars, but many people have lost their hard-earned money on unprofitable items because they couldn't find any buyers for their NFTs.