Non-fungible tokens, or NFTs, are set to become some of the most profitable blockchain-based experiments in history. In short, these tokens are unique, and not able to be produced in large amounts.
As an asset class, NFTs are beginning to find their way into the hands of many collectors, but the value that backs many NFTs is still evolving. As a new way to own a creative asset, some caution in the sector is warranted.
High-profile influencers, such as Twitter CEO Jack Dorsey, have recently made the news auctioning NFTs. Although the cryptology behind NFTs is quite tricky, it’s not hard to understand what they are and how some are making a quick buck with them!
To be sure, NFTs aren’t the same thing as a normal cryptocurrency. While they use the same blockchain, they are always created with another token protocol, like ERC-721 on the Ethereum blockchain.
This means that you will need to have ETH to buy NFTs, and also spend tokens on gas fees whenever you want to create, or transfer an NFT.
Let’s take a look at what makes an NFT valuable, NFT ideas, how you can sell NFTs and make money from them. Let’s dive right into it.
What gives value to an NFT?
Just like the pieces in our hypothetical art collection, consumer interest determines the value of an NFT. They have no intrinsic value, much like art. In the same way, NFTs can gain in value quickly, as many art pieces do.
Similar to trading cards, rarity and the number of interested customers influence their value. Said differently, an NFT has value as a collectible, not a currency.
Even if an image can be converted into an NFT, this does not prevent the image from being shared freely. However, it definitely shows who owns the asset through the blockchain.
Some of the most prominent modern artists, including Banksy, have opted to enter the NFT space. In some cases, there is a physical object that is created alongside of the fully digital NFT, and in others, the art is fully digital.
It is very easy to make an…