Making Money With NFTs
What are NFTs
Non-fungible tokens (NFT for short) are a new form of digital collectible, specifically designed to be unique. Each NFT represents an asset or an ownership share.
To understand why this is so exciting, let’s first look at the current model of digital ownership.
There are two types of digital assets: fungible and non-fungible. Fungible digital items are interchangeable with each other, like audio or photos on Facebook. Fungible digital assets are the same, and one Bitcoin is the same as another. Most cryptocurrencies are fungible tokens in that anyone can swap them for another without a debate.
Non-fungible digital items are not interchangeable with each other, like unique pieces of art or real estate. You own one Picasso painting, not twelve. NFTs are unique and cannot be easily swapped for another unless both token holders agree on the perceived value of the underlying assets.
NFTs are a new type of digital asset that can be created, managed, and traded on the blockchain. They are programmed to be unique from their inception, and they can never be destroyed or counterfeited. NFTs use a simple set of rules, defined in smart contracts, to self-execute when a transaction occurs.
In the simplest terms, an NFT is an asset that you own and control — it’s not controlled by a central entity such as a bank, government, or social media platform (Twitter, Instagram, Facebook).
Why use NFTs
For creators or decentralized autonomous organizations (DAOs), non-fungible tokens are a new way to get paid. This is important because the current creator-first platform is slow, inefficient, and often unfair.
Some creators are very successful, but most aren’t. The problem with the current social media platforms and e-commerce platforms are that it makes it hard for small-time artists to make money. For content creators starting, it can take months or even years to monetize their content.
An artist who gets paid every month can live off their work. But an artist who gets paid once or twice a year struggles to pay rent. NFTs change that equation because they let anyone build a business without having to wait for payment. Since NFTs can be created (or minted) and listed on NFT marketplaces, auction houses, or platforms in minutes. Creators or DAOs can sell NFTs and receive crypto to their wallets in minutes.
DAOs use NFTs (crypto-enabled fundraising mechanisms) to raise capital for product development and marketing. NFTs empower DAOs to generate revenue using the community instead of traditional VC-based investors.
Why create NFTs
You have probably had this unpleasant experience: someone copies your work, puts their name on it, and makes money off of it. This is known as plagiarism or copyright infringement.
This is bad for creators, but it is also bad for the companies that help creators get paid. Every time there is copyright infringement, fewer people pay the creators of the things we love.
The good news is that there is a new way to get paid for digital content. It’s called non-fungible tokens (NFTs). These unique tokens are digital assets that can be used in games, on marketplaces, or on platforms. NFTs are special because they are unique and cannot be copied. When you create an NFT, it cannot be copied or cloned.
If you’re a creator or a DAO, here’s why NFTs are perfect for you:
- They’re frictionless and easy to use (e.g., install a crypto wallet)
- They’re more secure and transparent than other methods (e.g., $USD)
- They can incentivize behavior that’s good for the community (e.g., content curation or creation)
- It’s easier to find people who want your stuff (e.g., NFT marketplace reach)
- It’s easier to automate and programmatically enforce rules (e.g., no lawyers required)
How do you make an NFT
Dropping NFTs is a two-step process: minting and listing. Minting is the process of creating NFTs by uploading your assets, and listing is the process of placing yours for sale.
Once you have a smart contract, you’ll need to fill it with information about the token. That includes the total supply of tokens, the name of the token, and how much it costs to create (mint) the tokens.
This is where OpenZeppelin helps out. OpenZeppelin provides security products to build, automate, and operate decentralized applications. It has open-sourced Contracts, which help you minimize risk by using battle-tested libraries of smart contracts for Ethereum and other blockchains. You can use OpenZeppelin’s implementation to develop your smart contracts and drop your own NFTs.
NFTs will change the way you get paid
Non-fungible tokens are a new way for creators to get paid.
The basic concept behind NFTs is simple: they’re tokens that can represent anything unique. They could be limited edition sneakers, vintage baseball cards, or even virtual pets that live on the blockchain. Because they’re limited edition and unique, they’ve got an obvious use case within the world of e-commerce. NFTs are secure, have a limited supply, and have a provable rarity.
The tokenization of ownership will change the way creators get paid, and it is not just another blockchain.
Are you deciding on which NFT platform works best for you? Check out ✈️ Dstack.
Are you interested in creating your own smart contracts? Contact the 🦄 Unicorn Team.
Are you interested in minting your own NFTs? Reach out to the 🪶 Phoenix Team.
Originally published at phoenixteam.io on September 28, 2021.
