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NFT – what are they and how to profit?

So you want to profit with NFT? But you don’t know what that really means. Among the non-fungible token types, there are digital collectibles – and it’s a topic that I am going to explore here.

I have been thinking about non-fungible tokens (NFTs) for a few weeks now. There’s just something about them that gives me an emotional response, got me hooked, and wanted to learn everything there is to know about them and ultimately invest in them.

What is an NFT?

Non-fungible tokens (NFTs) are digital token that’s unique. In this guide, I’m going to discuss what they are, how they can be used, and what steps you need to take to profit from them.

The definition of non-fungible tokens is pretty tricky, to begin with, even for those who have been involved in the crypto space for years. With the recent explosion of popularity in blockchain games and collectibles, and all things crypto-collectibles (crypto-collectibles, what a word), the terms ERC-721, ERC-1155, and ERC-723 are on everyone’s lips.

NFT, or a Non-Fungible Token is gaining popularity among crypto and non-crypto communities alike. Although non-fungible sounds are very technical and confusing, it really is quite simple. Non-fungible simply means 1 unit is unique or different from another. Every time you take a picture with your phone it creates an image that belongs to you and only you. Every file you save on your computer is specific to that device; it is identifiable with your user account credentials and not anyone else’s.

NFTs are the next step in-game assets/asset classification. We’ve seen a wealth of new and exciting asset designations emerge from games. New types of buffs, new types of items, and even new ways to play the game itself through mechanics that actually change the rules while you’re playing.

How an NFT looks like - sometimes
How an NFT looks like – sometimes

What does NFT stand for?

NFT stands for “non-fungible token” – a crypto-based form of digital scarcity. And NFTs are not just a new way of doing things, but also the future of trading items in the games and entertainment industries. NFT (or non-fungible token), is a term that you have probably heard thrown around, but might be confused as to what it actually means.

Non-fungible tokens, also known as NFTs, are the latest innovation in the cryptocurrency space. The concept of NFTs has been around since at least 2011. However, it wasn’t until last year that CryptoKitties really brought NFTs into the spotlight.

The ability to transfer a unique asset on a blockchain is an incredible invention. It means you can now have something that was impossible before. You could have a rare or unique collectible item that can be completely owned by anyone in the world and transferred without having to rely on centralized elements or intermediaries.

Some people may even argue that NFTs will become so popular and widespread in the future that they will replace actual real-world items. I was intrigued by this concept, so I wanted to investigate it thoroughly for myself for a series of articles here on Blockonomi.

How to make an NFT?

Have you ever wanted to make a non-fungible token in the Ethereum blockchain? Within this blog post, we will explore multiple ways to make your own token. Each approach has its own unique characteristics, but each allows you to create your very own collectible.

First of all, you have to determine what your unique digital asset will be. That’s what you’ll turn into an NFT. It might just be a custom painting, music, collectible, meme, GIF, or perhaps even just a tweet. An NFT basically is a unique digital item with a sole owner – that’s what gives NFT value.

Make sure you own the intellectual property rights to the item before you turn it into an NFT. Creating an NFT for a digital asset you don’t own could get you into legal trouble.

It has to be something people want to buy. A great example of this is the “Bored Ape” collection. People tend to buy something that makes sure other people know how expensive it was, and the Bored Ape company took advantage of that. Basically, if you have money to buy a Bored Ape NFT, people know you’ve got your life on the right track.

Second and final, you have to choose a blockchain. Once you’ve decided what NFT you want to sell, it’s time to pick the blockchain where you want to sell it. The most popular one among the NFT artists is the Ethereum blockchain. I myself like the Polygon one. Other options are the Tezos, PolkaDot, Cosmos, and Binance Smart Chain. You can pick yours.

This is how you basically mint and sell an NFT

How to buy an NFT?

If you’re looking to buy a Non-Fungible Token (NFT), then congratulations! You’re well on your way to being a part of the next big thing in crypto. Don’t worry – buying NFTs is super easy.

Here’s how you can buy your first NFT.

First of all, you’ll need an Ethereum-compatible wallet and some ETH to get started. Once you’ve got that, you can go to NFT marketplaces like OpenSea, Rarible, SuperRare, and Foundation.

There are a lot of marketplaces, but for sake of keeping this article clean, we’ll focus on the OpenSea.

In order to connect your wallet, go to their website, click on the icon in the top right section, select “My Profile” and you’ll be prompted to connect your wallet. Done? Good.

Now time to explore. Prices, obviously, range from cheap to a thousand dollars for a rare item. Some of them are sold via auction, while the other might be snatched right away if you see the “Buy now” option. Keep in mind that even if an NFT seems cheap – or even free, there are still fees you have to pay in order for the purchase to go through.

Once you’ve chosen the NFT you like, you purchased or won the auction – also covered the fees (sorry), you can access your NFT via your crypto wallet until you decide to sell it.

How NFTs will appear on your wallet
How NFTs will appear on your wallet

How to sell your NFT?

Let’s say you’re looking to sell an NFT. Where do you start? How much should you charge? What if I told you a market exists where you can receive real-time offers on your items and make 100% of the profit? You probably think I’m crazy but keep reading and you’ll learn how to make that happen.

Here’s how to sell your NFT in some basic steps.

Choose a platform to sell

There are a lot of platforms that allow you to sell your NFT across a wide variety of blockchains, so it’s practically impossible to include all of them in a single article. In this article though, we’ll cover AtomicHub, Solana-based Solsea, and also OpenSea.

There can be catches — with OpenSea, listing and minting your first NFT for sale will require initializing your account, which can be a pretty expensive transaction – some $300 or $400. It is a one-time fee though, and after paying it, you’ll be able to lazy mint NFTs without having to pay anything.

Of course, there are alternatives to those prices. Rarible lets you sell NFTs using the Flow blockchain if you sign up for it using the Blocto wallet, and OpenSea will let you sell using the Polygon blockchain – which means your can mint and list your NFT for free! Both options have much lower fees than those you pay for using the Ethereum blockchain, if any fees at all, so we will at least touch on using them.

Set up a wallet

Wallets are the applications or websites you use to store your cryptocurrencies but also the NFTs you end up minting or buying. Coinbase has a more in-depth explanation of how wallets work and the different options that are available. On the other hand, if you’re just getting started, there’s really one main thing you need to worry about: using a wallet that’s compatible with the blockchain you’re using.

MetaMask’s wallet is one of the wallets that is supported by Ethereum-based applications like OpenSea, Foundation, and others and can be used either as a Chrome / Firefox extension or as an iOS / Android app. Coinbase has its own wallet that you can use as an extension or an app, which is supported by most platforms. I highly recommend Coinbase’s wallet if you’re planning on getting into crypto more broadly, as it has support for blockchains not based on Ethereum, like Bitcoin.

MetaMask and Coinbase Wallet’s setup procedures are similar. Once you have the browser extension or app installed (MetaMask can be downloaded here, Coinbase Wallet here), click or tap the “Create new wallet” button. Coinbase will ask you for a username, but both of them will ask you for a password, which obviously you’ll want to make sure is secure.

On the final step, both MetaMask and Coinbase will give you what’s known as a “seed phrase” which is 12 random words. It’s very important not to lose this, as it is the only way to recover your account if you, say, uninstall the app or need to set up your wallet on a new device. The best idea is to copy it and store it in a very safe location, something like a physical safe or password manager (or both).

MetaMask will ask you to repeat the phrase back just to make sure you have it, while Coinbase Wallet will ask you if you want to store an encrypted copy of it on the cloud if you set it up using the app.

If you lose your password or the 12-random-word security phrase there is nothing neither of the company can do to help you. Keep your password and secret phrase safe.

Connect your wallet

After you’ve set up everything from above, it’s time to connect your wallet to the NFT marketplace you plan on using. OpenSea and Rarible make this tremendously easy – all you have to do is to click the “Create” button on the top left. This will prompt a modal to connect your wallet. You’ll be then presented with a list of possibilities for wallets, and choosing yours will prompt another process you have to go through.

If you have Metamask or Coinbase’s extension installed, you’ll be presented with a pop-up asking if you want to connect your wallet – all this can be done shy of a few button clicks. Download the “Coinbase wallet” app and scan the QR code and you’re good to go.

After doing all this, you’re good to sell your NFT. So basically, this is how to make money with your NFT.

Where to buy NFT?

Most marketplaces currently use the Ethereum or the Polygon network to complete their transactions. So you will need Ethereum’s native token Ether or Polygon to buy an NFT. If you don’t have one, you can open an account with an exchange like WazirX or Binance and purchase the tokens from there.

You will also have to set up a crypto wallet compatible with Ethereum or Polygon. A crypto wallet is basically a digital address where you can store cryptocurrencies and collectibles like NFTs. You can open wallets with platforms like Metamask, Binance, or Coindesk. You have to go to the site of the platform of your preference and register to open a wallet with them. After you’re done opening the wallet, you will need to send the ether you bought from the exchange to the wallet’s address.

Choose the marketplace you want to buy the NFT from. There are multiple marketplaces for NFTs. Some of the top NFT marketplaces include OpenSea, Rarible, SuperRare, and Foundation.

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