What is NFTs? How to Make Money From NFTs? How do NFTs work?

Do you want to Earn and Make Money with NFTs? In this article, I am going to clear all your concept and misconception related to NFTs and finally, you will learn how you can make money through it.

NFT Mania

Take a look at this picture. How difficult do you think it is to draw, such as painting.

I guess most of you are capable of drawing something like this. You don’t even need photoshop to do that. You can do it with Paint and you don’t have to be creative at all.

But what if I told you that this painting was sold for 69 million dollars. It sounds like a joke, however, it’s not. 

Take a look at this picture. How difficult do you think it is to draw, such as painting.

I guess most of you are capable of drawing something like this. You don’t even need photoshop to do that. You can do it with Paint and you don’t have to be creative at all.

But what if I told you that this painting was sold for 69 million dollars. It sounds like a joke, however, it’s not. 

make money with NFTs
CryptoPunk #5217

Gere is another one, CryptoPunk #5217. I am not sure what exactly makes this picture better than the previous one, but this one was sold for 5.59 million dollars. 

I know that these numbers sound absolutely shocking but that’s because you haven’t seen this one. It was drawn by Mike Winkelmann and it contains within it 5K items of his work. Ranging from 2007, he pledged to create one piece of artwork daily, and that is the end result. This piece of art, if you can call it so was sold for 69.3 million dollars. yes, you heard that right!

If you want to ask me what makes this particular art better than any other form of art that you have seen, I will probably struggle to answer but I can explain to you is why is this art is so expensive, why investors are willing to pay that much money for these painting?

Why could they potentially be worth much more in the future? And how are teenagers making millions of dollars through NFTs? 

We will answer all of these questions and many more.

At first glance, all of these paintings don’t seem different from the rest of the paintings but what sets them apart is that they are not simply art but NFTs or non-fungible tokens. But what is a non-fungible token?

Take a look at this image. This article is not the only place where this image exists. A copy of it exists on my computer, another copy is somewhere in google drive and another one probably exists on my parent’s computer, I mean if they haven’t deleted it yet. In fact, I can make as many copies of this image as I want, so it’s not unique in any way.

However, this painting (Mona Lisa) is unique. It was drawn at the beginning of the 16th century by Da Vinci, and it’s impossible to create a second one because only one such painting exists that’s why it is worth millions of dollars. 

Of course, you can create a copy but it’s going to be a copy, a Mona Lisa that was drawn by Da Vinci is always going to be one.

In fact, what makes every painting of Da Vinci so expensive is that they aren’t going to

be second copies, ever! and we humans value unique things!

Remember supreme shirts? They weren’t fundamentally different from everything else that existed in the market. They were simply t-shirts with a supreme logo on them, however, the company usually made these shirts in collaboration with celebrities and only produced a limited number of them. 

The fact that only a limited number of them existed in the world made them

so attractive and that’s what makes these paintings so expensive because NFTs allow them to be unique. 

Suppose an artist draws paintings and sells them to you as an NFT. The entire world is going to know that this painting belongs to you, and anyone would attempt to create a copy. 

The world will know that it’s a copy and that the original belongs to you, exactly like the Mona Lisa.

But how is that possible. To understand that we have to go back to the blockchain. I know that blockchain is overused and you probably hear this word everywhere but let’s just recap how blockchain works in short.

Concept of Blockchain

When you buy a house, for example, you need the middle man to approve that the ownership of this house is shifting from one person to another. In fact, when you look at our world, we always have the middleman. 

When you buy something, trade, send money to each other,  Banks are the perfect example. When you swipe your debit card, for example, both of you, the buyer and the seller trust the bank to transfer money from your account to the seller’s account. If you don’t have the money in your account, the bank declines your request to send the money to the seller while if you have the money, the bank approves the transactions, you take your packet of bread and the bank transfers 5 dollars to the seller’s account. 

If it wasn’t for the bank, we wouldn’t be able to complete this transaction since we don’t know each and one of us if not, both can cheat the other, that’s we need the middleman or the bank in this example. 

But blockchain changes the entire system by getting rid of the middleman and letting the public keep track of every transaction.

Blockchain is a database that stores information electronically in digital format. Transactions in blockchain cannot be altered, deleted, or destroyed.

So if the same transaction would have been made using bitcoin, the public can confirm

whether I have enough money for that packet of bread and when I send those 5 dollars to Peter, the public acknowledges the fact that these 5 dollars were sent from my account to Peter’s account. And is pretty difficult to cheat the system because every transaction is being tracked by thousands of computers all around the globe which makes it extremely difficult to hack. That’s what makes crypt currencies so powerful!

So the question is, how is that related to NFTs. 

Concept of NFTs

NFTs are also based on blockchain, mostly on Ethereum. So when an artist creates art

and turns it into an NFT, the entire blockchain will record it. So whenever it changes hands, all the computers that are connected to this blockchain will keep track of it. So if I come out with another similar painting and claim that it’s CryptoPunk #5217, and try

to sell it to you for 6 million dollars, you can easily verify it by taking a look at the

blockchain database to find out if it actually CryptoPunk #5217 or a copy. 

If you are not interested in Art, NFTs probably doesn’t make sense to you but if you are,

this is a game-changer. We no longer need experts and historians to verify whether this

is the Mona Lisa that was drawn by Da Vinci, the moment it’s recorded in the blockchain, no one can steal it or create another copy, I mean they can create a copy but everyone

will know which one is the original and which one is a copy because it’s being tracked by

thousands if not millions of computers all across the globe whenever it changes hands.

If your favourite Artist designs art for you, the entire world is going to know that this

art was designed for you and it belongs to you and no one can steal it or claim otherwise. 

We, humans, are very unreasonable creatures, we like to have things that others don’t. That’s why we buy expensive things that are rare like a Rolex watch that costs 50K dollars. 

What do you think that 50K dollar watch can do besides telling you the time? Nothing!

but why did it cost 50K dollars, because Rolex made only 100 of them so you can brag in front of your friends that you have one of the only 100 watches of this model that Rolex ever made.

Theoretically, anything could be turned into an NFT. Even this video. But the question that you are probably interested in is – How do you make money with NFTs?

Before we answer that question, you have to understand the Metaverse. 

Since the invention of the internet, we have been going through a revolution where we have been building a virtual world. You have been creating your virtual identity for some time already. There is already a digital version of you on the Internet – Your Instagram is

the place where you keep track of your experiences, Twitter is where you share your opinion and Facebook is the place to let your grandma know that you are still alive. 

Google and YouTube already know what you are thinking and what you are curious about. 

This digital world is only going to play a more important role year after year. I know

that it’s difficult to imagine an entirely digital world today but it was the same with

the internet 20 years ago. Who could have predicted that your Instagram version would be more important than who you are in reality?

That’s why the worlds biggest companies such as Facebook, Microsoft, Apple are all investing billions of dollars to create their own version of the metaverse. Facebook literally renamed itself to Meta because they know where the future is heading to.

But no one is going to own this metaverse like no one owns the internet and this Metaverse is probably going to be a multiverse. But the question is, how do you own anything in this digital world? That’s where NFTs come into the picture. 

Whether it’s a Pokemon card, a fortnight skin or a painting, it can be turned into an NFT. So when you are buying a Pokemon card, you can take a look at the blockchain database to find out if it is that Pokemon card or a fake one.

This is of course the future, but that future is not that far. We have already built the infrastructure to make that possible. So the reason that people are paying so much money for NFTs is that when this Metaverse will be ready, these NFTs will be worth a lot more. Whether they will or not, that’s of course speculation.

Like any other new technology, there is always hype around it, and people throw unbelievable amounts of money into them. Think of the internet when it started. Back in the late 1990s, investors threw billions of dollars into internet companies.

Companies would purposefully add .com at the end of their names to attract investors and it turned into a bubble. But in the year 2000, the bubble burst, bankrupting the vast majority of internet companies. Even the internet giants almost went bankrupt like Yahoo. 

However, that was not the end of the internet. In fact, that was the beginning.

How to Make Money with NFTs

So there are essential 2 ways to make money with NFTs. You are either going to take advantage out of this hype by creating NFTs around something that’s popular or buy NFTs for pennies that you believe are going to be worth a lot more in the future, as is the case with any other investment.

But to do that, you have to understand deeply how NFTs work. 

I hope this article gave you some context and cleared some of the misconceptions you might have had.

If you have enjoyed this reading this article, comment down below and share it with your friends.

What is the full form of NFTs?

NFTs stands for Non-Fungible Tokens.

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