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Nov 02

How to make money with an NFT (Non-Fungible Token)

Reading Time: 9 mins

Have you wondered how to make money with an NFT? You actually could do it. You don’t have to be a celebrity to make money with an NFT (although it does help).

It’s hard to avoid the hype of Non-Fungible Tokens, or NFT’s as they’re referred to, with stars such as Argentinian footballer Lionel Messi launching his own NFT collection, pop star Katy Perry launching a video/music NFT and digital artist Grimes raising over $6m in NFT sales.

Then there’s the stories of digital art NFT’s such as Beeple raising $69 million and even an NFT of the YouTube video “Charlie bit my finger” raising £500,000. And there’s the controversy of Jay-Z’s lawsuit around album copyright and NFT’s. We’re even seeing “traditional” firms such as Visa moving into NFT’s when they purchased a Cryptopunk NFT for almost $150k.

Phew! What a lot of money is already sloshing around this sector!

NFT’s aren’t just for big stars with big budgets though.  They can be bought and sold by mere mortals such as ourselves and you can even create your own.

There’s a growing market in the sale and resale of NFT’s with sales of NFT’s exceeding $700m in Q2 2021.

So what is one of these mystical “NFT”’s ?  is it all a bumble of short-term hype or any opportunity to make money and how can you create your own NFT?  Read on…

 

what is an nft (Non-Fungible token)?

An NFT is a digital representation (or “token”), held on a blockchain, showing ownership of a specified digital asset.

See our article about NFTs here for more information.

Think of it as like a digital receipt or a bearer bond where whoever possesses the receipt can prove ownership of the item. That means that people can trade the ownership of something by buying and selling the NFT.  That makes it quite similar to how bank notes came about – they originally represented the ownership of an equivalent sum of gold held in a vault. The difference being a bank note wasn’t representing a specific gold coin or ingot and was interchangeable (a £5 is pretty much the same as any other £5 note).

That’s what’s meant by ‘fungibility’. NFT’s instead represent ownership of a specific, uniquely identified asset which isn’t interchangeable – it’s unique.

That’s what makes it ‘non-fungible’. That’s why they’re called Non-Fungible Tokens.

 

what’s the point of an nft?

NFT’s are being used to represent ownership of digital art through marketplace platforms like

There’s a growth of NFT’s representing digital assets in the metaverse (think of avatars and inventories held in computer games)

  • there’s stories of how the NFT representing the first tweet from Jack Dorsey sold for $2.9m
  • and an NFT linking to Sir Tim Berners-Lee’s source code of the World Wide Web selling for $5.4m.

NFT’s can be exchanged directly between people or are more typically bought and sold on the various NFT marketplace platforms described elsewhere in this article.

  • Some people buy them as short term opportunistic purchases – looking to spot something that will quickly increase in value.
  • Some buy them as longer term investments and others buy them simply to say that they own them!

NFT’s sell for anywhere between $100 and $1 million and, like the traditional art world, have become the domain of experts focussing on particular niches – such as crypto artists like Nanu Berks.

If you’re a digital artist then NFT’s provide a new way to promote, market and sell your works and they also bring an additional benefit as NFT’s can be set up to pay a fee back to the originating artist every time the artwork is subsequently resold.  This means that artists benefit not just from the initial sale but from any subsequent resale and this makes NFT’s very attractive to artists.

 

how to create your own nft

Hopefully you’ve checked out some of the suggested sites and feel suitably inspired to create your own NFT and dip your toe into this exciting market.  To do this you will need a number of things, each of which will be explained further:

  • A digital asset – maybe a .jpeg, .gif or other image that you’ve created and would now like to sell
  • A digital wallet – This holds the keys to your NFT and allows the NFT marketplace platforms to verify that you are the owner of the asset. A popular one is Metamask. You can install this on a mobile device (Android or iOS) or on the Chrome, Firefox, Brave or Edge browser on a desktop
  • Some ETH (Ethereum cryptocurrency) – this is used to pay for the minting and registering of the NFT. You will also need ETH if you want to buy an NFT. If you’ve installed Metamask then you can buy ETH with a debit card or use Apple Pay. Just click on “add funds” and follow the instructions. The amount you will need varies but somewhere between £25 and £200 will probably be enough.  The reason for the big range is down to demand and supply and activity on the network.  An indication of past prices can be found at https://ycharts.com/indicators/ethereum_average_gas_price

Once you have all of the above pre-requisites you’re now on the way to creating your first NFT!

start on your nft

For this explanation we will use Rarible as this has a relatively simple interface which makes it easy to use.  The instructions are for someone using a Windows PC but you should be able to figure out how to do it on an Apple device as it’s pretty similar!  Just follow the steps below:

SET UP METAMASK WALLET

  1. Whilst you can use various browsers, I personally prefer Chrome.
  2. Next you will need to install the Metamask wallet extension for Chrome. Go to https://metamask.io/ and click on ‘Download now’.
  3. Now click on ‘Install Metamask for Chrome’
  4. Now click on ‘Add to Chrome’ and then ‘Add extension’ and then ‘Get started’
  5. You should now have two options and you should click on the second button ‘Create a Wallet’
  6. Metamask will ask if you want to help Metamask improve, click on your preferred option. I prefer ‘ No Thanks’
  7. It will now prompt you to create a password and agree to terms of use and then click on ‘Create’
  8. Ensuring that your wallet is secure is important and you’re offered an opportunity to watch a video about it. It’s only 95 seconds long so worth watching!
  9. Finish setup of wallet here…..

Congratulations, you now have a crypto wallet which you can use to store the keys to your NFT’s and connect to NFT platforms to verify your ownership of NFT’s.

You’ll now need to purchase a small amount of ETH.  It’s fairly easy but we’ll step through the process here:

  1. On your browser, click on the MetaMask extension icon (the little fox)
  2. Click on ‘Buy’
  3. Click on ‘Continue to Wyre’
  4. Click on your chosen payment method
  5. Click the ‘authorise Wyre’ and then ‘Next’
  6. Fill in the payment details and then click on ‘Submit’
  7. You may then need to go through your card issuers verification process and put in how much you wish to purchase
  8. You should now receive a confirmation that you have received ETH in your wallet

Congratulations, if you’ve made it this far, you’re now a member of the crypto owning community!

You now have all the pre-requisites to finally product your first NFT and, if you wish, put it up for sale.

 

CREATING YOUR NFT

Now create your very own NFT (remember, it can be anything you like – you don’t need to be a genius artist to do it)

  1. Go to https://rarible.com/
  2. Click on ‘Create’
  3. Click on ‘Choose file’ and navigate to your .jpeg.gif/etc.
  4. Click on ‘Single’ (we’ll keep it simple for now)
  5. Select whether you want to put on marketplace at a fixed price, timed auction or open for bids
  6. If you want to sell your item for a fixed price then enter it in ETH (Ethereum)
  7. Select ‘Unlock once purchased
  8. Click on ‘Create (ERC-721)
  9. Click on ‘Sign in with Wallet’ and then ‘Sign in with Metamask
  10. Enter a title and description and set any royalties (up to 50%) that you will receive on any resale
  11. Click on ‘Create’
  12. The Mint process will ask you to confirm the Gas fee (this is how much it will cost to mint the NFT and will change depending upon network activity.  This can have a big effect on how much it will cost
  13. Click on ‘Confirm’ if you’re ok with the gas fee
  14. Depending upon how busy the Ethereum blockchain network is the process may now take a few minutes before you receive a confirmation

At last! You’ve now created your first NFT!

 

how to sell your nft

Now what ?  For some people it’s sufficient to simply have the bragging rights to say you own an NFT  (or a particular NFT).  On Rarible, if you click on ‘My items’ details of the NFT’s you own is displayed.

From here you have the option to

  • take the item off sale
  • or put it on sale
  • or transfer it to somebody else (a bit like gifting something).

If you put the item up for auction, you can view the bid history and see if you are on the way to becoming an NFT millionaire!

If the NFT is successfully sold then the price paid in ETH will appear in your MetaMask wallet.  I guess you’d now like to know how to turn that into cash right ?

If you just want to show somebody the NFT, you can click on the three little dots ‘…’ at the top right hand side of the item and choose ‘Share’ and then select how you want to share it.  Options currently include Twitter, Facebook, Telegram and E-mail.

 

where can you buy and sell nfts?

As we can see from the examples above, an NFT can be associated with a variety of assets held as a digital file.

Typically the underlying asset will be a .

  • jpeg, gif or png for a digital image, .
  • mp3 or .wav for music
  • mp4 for video.

The creation of the asset is therefore limited only by your own creativity and imagination as pretty much anyone can create a .jpeg with an application such as paint on a PC or even record a video on their mobile phone.

If you would like to see what the assets (pictures, video, writing etc) that NFT’s are linked to are then a good starting place is Opensea which is considered to be the world first, and largest, NFT marketplace.

There’s also niche markets like

You’ll see a lot of prices expressed in dollars (USD) or cryptocurrencies such as ETH (Ethereum) and that’s just the nature of the market and something you need to adapt to.

 

finding out more about nfts

So there you have it, you’ve been on quite a journey involving creating a wallet, buying cryptocurrency, minting your first NFT, putting it on sale and being able to see it on a marketplace.

The world of NFT’s is fascinating and hopefully this guide has provided you with the step by step instructions to creating and selling your own NFT’s.  If you’d like to learn more then it’s worth reading the guides on the Rarible and Openseas sites.  Also, feel free to contact me at gnuttall@distlytics.com.  I run an NFT Community on Telegram and host crypto zoom meetings where we discuss NFT and other crypto related developments.

If you’d like to learn more about NFT’s, cryptocurrencies and much more then check out my Youtube channel and “useful guide” playlist:

I’m going to soon be publishing a video on the NFT creation process, so subscribe to the channel and be alerted when it’s available.

If you have enjoyed this article then please share the link with others who you think would benefit from it.  If you found it too complicated then let me know!

 

Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.

WHAT DO YOU THINK?

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Joanne
Joanne
24 days ago

Interesting information on this.

Joanne
Joanne
24 days ago

Interesting information.

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