NFT is a non-exchangeable, unique token that can be exchanged or replaced with another coin of the same kind. The technology first appeared in 2017, but today the trend is unfolding with renewed vigor. The system is based on smart Ethereum blockchain contracts, which allow tokens to be used as more than just a means of payment. For example, pictures, music, and more are sold as unique NFT tokens with the possibility of profit. Let’s look below at what this tool is, how it can be earned, and where to store it.
What you need to know about NFT-tokens ?
The abbreviation “NFT” stands for “Non-Fungible Token. The technology appeared four years ago, but only today it has received a second life. Such assets can be received, earned, and stored in different wallets, for example, Trust Wallet, which supports BEP / ERC 721.
The essence of replaceable objects is simple. For example, a bill of 100 rubles can be exchanged for the same piece of paper. This means that the ruble refers to an interchangeable asset. There is a similar situation with other fiat payment instruments, for example, euros or dollars.
For comparison, the painting “Starry Night” by writer Vincent Van Gogh, created in 1889, is one of a kind. This means that it is irreplaceable. Sure, you can find more than a dozen copies on the planet, but their cost is nothing compared to the price of the original version.
NFT technology works on a similar principle, but in a blockchain system. The token is easy to sell, exchange, or transfer because each token is unique and one-of-a-kind. A certain value from the real world is attached to an NFT token: a picture, text, song, audio, and more.
The peculiarity of NFT-tokens compared to usual cryptocurrencies is that they are an integral unit, they are not divided into small elements (for example, Bitcoin has got Satoshi). You can’t buy 0.0001 NFT – only the whole token at once.
Is it possible to earn on Non Fungible Token ?
There are many ways to earn NFT-coins, but the most in-demand are gamer platforms. Their capabilities allow you to make your own items, and then offer them to other users for money. When determining the price, the rarity of the item and its characteristics are taken into account.
As an example we can take the Crypto Kitties project. The principle of action is as follows:
- All animals in the game are virtual and have the form of NFT-token. Accordingly, it is impossible to separate them.
- Users take the cats for money and cross them. The primary characteristics do not matter, so the cost of the animals is different.
- In the next step, new kittens with unique qualities appear. Such a feature increases the interest of other users in them. As a result, you can sell virtual animals at a higher price, covering the primary costs and earning additional money.
This way of earning appealed to many participants, which led to a change in Etherium commissions. Users realized that it was possible to get more expensive assets from budget assets and have income. So, in 2018, one of the cats managed to sell for 600 Etherium coins, which at the time was about $600, and at the current rate it amounts to more than one million.
Another option is Crypto Punks. The organization issued 10 thousand unique tokens for the collection. At first, they were distributed for free, but today they are successfully sold on the “secondary” market. Each issued asset is unique in its own way, and the main difference is the background, reflecting the status. The following variants are possible here:
- blue – passed confirmation;
- red – are on sale;
- purple – have a valid rate.
For detailed information on the issue, you can go to the Twitter profile – @cryptopunksbot. Here you can easily find information on the most significant deals. For example, one of the largest sales is a $24,000 transaction. But this is not the limit, and prices will only increase in the future.
At the beginning of spring 2021, the activists of the cryptocurrency world opened not less interesting project – Crypto Cats. It almost completely duplicates the variant considered above with the difference that instead of images of people pixel representatives of the family of cats are used here. It turns out that since 2017 not all animals have been sold and there are still two hundred of more than 600. After the spread of this information, almost all the cats were sold in a couple of hours for up to $200 each.
How to create your own NFT tokens ?
Today, anyone can make a Non Fungible Token in order to earn money from it later on. To do this, it is not necessary to learn any complicated information, programming or blockchain technology. The most convenient platform is Open Sea.
The algorithm for creating an asset is as follows:
- Install MetaMask software for Google Chrome and make your own storage for Etherium.
- Log in to Open Sea at opensea.io and click “Create”.
- Click on the “Submit NFTs” button on the top right and connect with the created crypto wallet. Enter a password to log in.
- Prepare a unique document. This function can be performed by any object, for example, a personal photo.
- Click on “Create a new collection.
- Specify a name and logo. There is no need for a description, and this field can be filled in later.
- Upload the previously prepared file. Keep in mind that the system does not support all formats. You can download files in OGG, GLB, JPG, WEBM, PNG, GIF, MP3, MP4, WAV, SVG, GLTF. Note that the file size should not exceed 100 MB.
- Enter a name.
- Fill in the field with additional data. It can be a URL to more details, settings, and descriptions.
- Make the file with the unlock option. This is necessary so that it will only open after the purchase.
- Click “Create.”
This way you have created a new object in the collection, and most of the actions do not require confirmation in Meta Mask. There is no additional cost involved. If done correctly, you have your NFT in your possession and can sell it for a certain price or through an auction.
How to sell your NFT ?
After creating a non-exchangeable token, you need to sell it. This can be done on the same platform as mentioned above (opensea.io). To do this, click on “Sell” to sell. The value can be set in one of two ways:
- Fix. In this case, a specific value expressed in ETH, DAI, or USDC is put.
- Auction. A minimum price parameter is set, as well as the date of the transaction.
It is allowed to group with the other NFT-files to increase the probability of sale. After completing the settings, click on the “Post Your Listing” button.
Learn that in order to add a file to the catalog, you need to perform a vault operation. Despite the 0 amount, you have to pay a commission to activate the account. Once the object is bought, the money comes to the wallet without the opensea.io service fee (is 2.5 percent).
How to buy a Non Fungible Token from others ?
An alternative to creating and selling a token is to buy existing assets to sell and get the difference. You can use the same Open Sea service or another platform for this purpose. Alternatively, you can use the functionality of MakersPlace, Mintable, KnownOrigin, Mintbase, etc.
If Open Sea is preferred, do the following:
- Go to the Explorer section.
- Look at the available options, which are grouped into different groups. To keep the tools you want, use the filters on the left side. They will help you find tools that belong to a specific project or are for sale for certain virtual money, etc.
- Go to the right NFT and study the information provided.
- If everything suits you, buy the instrument.
Immediately after that, the funds are deducted from the Etherium vault, and you become the owner of the new object. Keep in mind the author’s right, which allows you to give or sell the token to other users in the future. In this case, a part from each next transaction is sent to the creator. It turns out that Non Fungible Token creators can count on passive profits for a long time.
Earning an income from NFT is real and the feature is available to everyone. No special knowledge is needed to make money from copyright and property rights, and the procedure itself takes a few minutes. The only disadvantages are the difficulties in scaling the Ethereum network, as well as large commissions. That’s why Non Fungible Token platforms are increasingly appearing on third-party blockchains, such as Binance SmartChain.