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What are NFTs and How Can They Make You a Millionaire?
It’s not just a theoretical possibility; many individuals have indeed become millionaires through NFTs. Learn about NFTs and how you can make the most of it.
NFTs, short for Non-Fungible Tokens, have taken the world by storm, gaining immense popularity, especially during the COVID-19 pandemic.
As their prominence continues to rise, investors are increasingly intrigued by the potential of NFTs to become a pathway to million-dollar fortunes.
If you find yourself wondering about the world of NFTs, what they are exactly, and how you can invest in them, then this article is tailor-made for you.
It explains the concept of NFTs and uncovers the possibilities they offer for those seeking to venture into this digital frontier and potentially secure a lucrative future.
What are NFTs?
NFT stands for Non-Fungible Tokens, and while it has been around since 2014, it has recently gained significant attention due to its increasing popularity in buying and selling digital artwork.
According to Condesk, an astonishing £123 million has been spent on NFTs since November 2017.
For history enthusiasts, the concept of valuing artworks is not new, especially in European, African, and Asian cultures. Art lovers have been purchasing masterpieces from renowned artists like Leonardo Da Vinci, believing that these works will appreciate in value over time. Similarly, NFTs hold a similar appeal in today’s digital world.
It’s important to understand that NFTs represent a digital form of artwork, whereas cryptocurrencies represent digital currencies.
To grasp the concept better, think of NFTs as virtual certificates, similar to physical certificates or titles used to prove ownership of a physical asset, such as real estate. Originally designed for digital assets and art, NFTs serve as a digital proof of ownership, granting unique value and ownership rights to the buyer.
Still don’t get it? Let’s break it down and make it simpler.
How would You explain NFTs to a Child?
Imagine you have a favourite piece of artwork that you really love, like a painting or a drawing. Normally, you can show it to your friends or family, and they can see how special it is to you.
Now, think of NFTs as a special magic sticker that you can put on your artwork to make it even more special. This magic sticker says that the artwork belongs only to you, and nobody else can have the same sticker on their artwork. It’s like having your name on your favourite toy, so everyone knows it’s yours.
With this magic sticker, your artwork becomes unique and valuable because it shows that you are the only one who owns it in the whole wide world. People might want to buy your special artwork with the magic sticker because it’s so unique and meaningful to you.
So, just like your favourite toy with your name on it, NFTs make digital artwork or other special things on the internet really special and one-of-a-kind, just for you!
How to Make Money With NFTs
Making money with NFTs can be achieved in two ways: creating your own unique digital assets or purchasing existing ones. Another option is to invest in NFTs from established artists or projects with promising growth potential.
It’s not just a theoretical possibility; many individuals have indeed become millionaires through NFTs. Imagine a scenario where an NFT creator launches a collection of 10,000 NFTs, each priced at $200. If the entire collection sells out, the creator would earn a whopping $2,000,000 overnight, becoming a millionaire in one stroke.
An inspiring case study is that of 13-year-old Nyla Hayes, who achieved multimillionaire status by selling NFTs at such a young age. And this is just one of the many success stories in the world of NFTs.
Tips to Make Money in the NFT Market
The potential for financial growth and success in the NFT market is indeed real and within reach for those who embrace this innovative digital asset space. Here are some tips to help you get started and increase your chances of success:
1. Niche and Quality:
Focus on a niche that interests you or has a growing demand. High-quality, unique, and well-promoted NFTs tend to attract more buyers and higher prices.
2. Promote Your NFTs:
Marketing plays a crucial role in selling NFTs. Utilize social media, forums, and NFT communities to showcase your work and attract potential buyers. Engage with your audience and build a following.
3. Participate in NFT Drops and Auctions:
Keep an eye on upcoming NFT drops and auctions from popular artists and projects. Participating in early sales or limited editions can provide opportunities for profitable resale.
4. Hold or Flip:
Decide whether you want to hold onto your NFTs for the long term or flip them for quick profits. Some NFTs may appreciate in value over time, while others may offer immediate resale opportunities.
5. Stay Mindful of Costs:
Consider transaction fees and gas costs when buying or selling NFTs. High fees can eat into your profits, so be mindful of the overall cost involved.
6. Diversify Your Portfolio:
Avoid putting all your funds into a single NFT or project. Diversify your NFT portfolio to spread risk and increase the chances of finding valuable assets.
7. Stay Informed:
The NFT space is rapidly evolving. Stay informed about new projects, trends, and changes in the market to make informed decisions.
8. Understand the Risks:
While NFTs can be lucrative, they also come with risks. Prices can be volatile, and the market may experience downturns. Only invest what you can afford to lose.
Remember, success in the NFT market often requires a combination of creativity, research, and timing. With the right approach and a bit of luck, making money with NFTs can be a rewarding experience.
Source: The Motley Fool
How to Buy NFTs
First, it’s essential to understand that NFTs operate on blockchain networks like Ethereum and Solana, allowing complex financial transactions through smart contracts. Unlike Bitcoin, NFTs represent unique digital assets and are not interchangeable.
To buy NFTs, you’ll need a digital wallet to store your cryptocurrency. Popular wallets include Metamask, Binance, and Coinbase, which you can connect to the NFT marketplace of your choice.
Where to Buy NFTs
There are various NFT marketplaces where you can purchase unique digital assets. Some popular options include Axie Infinity, Decentraland, NBA Top Shot, OpenSea, Rarible, SuperRare, and more. For this guide, we’ll focus on buying NFTs on OpenSea.
How to Get a Metamask Wallet to Buy an NFT:
- On Google Chrome, go to the Chrome Web Store and get the Metamask wallet Chrome extension. If you’re using a mobile device, download Metamask from the Play Store or Apple Store.
- After setting up Metamask, add some Ethereum (ETH) to your wallet. You can buy Ethereum directly on Metamask through “Buy” > “Continue to Wyre.” Ensure you have enough ETH to cover the cost of the NFT and the Ethereum gas fee.
How to Buy an NFT on OpenSea:
- Visit OpenSea.io and click on “Marketplace.” Browse through millions of NFTs and use the left panel to filter by category.
- When you find an NFT that catches your eye, click on it to view details and the price (in ETH and USD).
- If you’re comfortable with the price, click “Buy Now.”
- Sign in to your Metamask wallet when prompted.
- A “Complete checkout” window will appear, showing the total price. Tick the “Terms of Service” box.
- Click “Checkout” and review the Ethereum gas fee presented by Metamask. On a good day, the gas fee should cost no more than $25, but I’ve seen dark days when Ethereum gas fees climbed to $500.
- If you agree to the gas fee, click “Confirm” to proceed with the purchase.
- The transaction will start, and you can track its progress by clicking “View on Etherscan.”
Please be patient if the NFT transaction takes some time to complete, especially during periods of network congestion. Once your NFT purchase is confirmed, you can admire your new digital asset by navigating to “My collections” under your profile icon on OpenSea.
Buying NFTs can be an exciting and creative way to explore unique digital art, collectibles, and more. Just remember to stay informed about gas fees and make sure to use a reputable marketplace to ensure a smooth and secure NFT buying experience. Happy hunting!