If you’re someone who watches the news regularly, you’ve probably noticed some crazy headlines regarding something called “NFT”.
For example, there was This article From CNBC with the title, “Meet the 12-year-old programmer who is set to earn over $400,000 selling NFTswhich explained Twain’s process of buying and selling digital artwork consisting of “exotic whales”.
Then there was This article is in Fortunewhich describes a teenager who built a $26 million NFT empire.
This all sounds crazy for sure, but it’s especially true if you don’t even know what an NFT is. clearlyNFTs are a type of asset that can be bought and sold online, but how do NFTs actually work? And most importantly, how do you make money?
Finally, how can children under the age of 12 benefit from something the ordinary world barely knows?
While I personally adore investing in cryptocurrencies and everything that goes on in the crypto space, NFTs or Non-Fungible Tokens are a type of asset that I don’t have much experience with.
With this in mind, I decided to interview one of the NFT experts – Robert Farrington – to learn more about NFTs and how they work. Farrington is not only the owner of the famous site college investorbut has a separate website called money worship This is all about cryptocurrency and NFT.
If you are keen to know what NFT is, how this type of asset works, and how to start investing, then you are definitely in the right place. As a side note, you can also listen to my podcast interview with Robert using the link below.
What is NFT?
Before we dive into how to invest in NFTs to make a profit, it is crucial that readers understand what they really are. According to Farrington, NFTs are much more than just a .jpeg image, which some people tend to believe.
For the most part, Farrington says, non-fungible tokens (NFTs) are blockchain-based digital representations of a smart contract. However, NFTs can really be anything, from a collectible to a digital piece of art. An NFT may be a card that gives you access to a specific community, such as a ticket.
At the same time, NFTs are also used for for-profit games, a type of online game that allows participants to earn cryptocurrency based on the time they spend. According to Farrington, NFTs were sold at Sotheby’s just like mainstream art.
Top Picks From the NBA another type of NFT that I know personally. For example, you can buy the NBA Top Shot NFT which includes a digital video of LeBron James dunking the ball. In some cases, only 25 or 50 copies of each NFT are released, so the NFT you buy is almost like a piece of art.
According to Farrington, these are collectibles that people have purchased since the beginning of time.
“There is so much out there and people have always loved to collect unique and rare things,” he says. “This is just a digital format for it.”
In addition to thinking of NFTs as art, he also noted that non-fungible tokens are very good at showing ownership and provenance. You may have heard of the source in the context of traditional art. If not, “source” is a term used to describe the ownership history of a piece of art that shows its authenticity.
Other methods use NFTs
As I mentioned earlier, NFTs can also be marketed as permits for a specific event. For example, Gary Vaynerchuk recently sold about 10,000 tickets for a conference he’s showing over the next three years. These are the only tickets he’ll sell for the conference, so their value will likely go up.
What is interesting here is how content creators can take advantage of selling tickets as an NFT rather than through traditional means. With the NFT, the creator can include proprietary rights in the digital contract. This means that when the NFT is subsequently sold on the aftermarket, the original creator receives royalties from that sale.
In this case, Farrington says, Vaynerchuk is already taking a 5% discount off every future sale. So, if he sells 10,000 conference tickets and 30% of them are in the resale market, he makes 5% of 30% of tickets sold. Since no other tickets for these events have been sold, and since the purchase price is likely to go up in value, Vaynerchuk must take advantage of the increased value of each NFT along with the person selling it.
The same could be true for sports season tickets, which can easily be sold as NFTs in the future. If you sell your season tickets to a friend, no one will get a discount. However, season tickets sold as NFTs will include royalties that go back to the team owner.
In short, NFTs can come in countless different forms, some more useful than others. But that’s part of the reason for its growing popularity. NFTs are interesting and unique, and the ways to use them will only increase over time.
Where do you buy NFTs?
If you are interested in NFTs, your next question is likely to be where You can find them. I remember I had this same question when I first started investing in cryptocurrency. I had all of these regular brokerage accounts, but none of them actually offered crypto at the time.
Just like with crypto, it takes a certain amount of work up front to figure out where to invest in NFTs, and then to transfer the cash you need for your investment to the platform.
“It’s definitely a process, and it all starts from where you own your cryptocurrency,” says Robert.
He says the general premise of cryptocurrencies is that they are decentralized and have ownership. However, platforms like BlockFi and Coinbase hold the cryptocurrency for you.
“You have ownership of it because it is in your name, but you don’t have real ownership of it yet. They act as a trustee and keep your private keys.”
As a result, you must transfer your crypto to a hardware wallet if you want to invest in NFTs. On a personal level, Farrington says he uses a Ledger Hardware Wallet And a platform called Metamask.
This combination of products allows him to hold the physical keys to his cryptocurrency, which is what it takes to be able to invest in NFTs. Not only that, but Farrington says the move is what prevents people from getting hacked and watching their crypto assets disappear overnight.
Hacking is a huge concern when it comes to cryptocurrencies, so you should keep in mind that this is one thing when you break into this space and start learning more about NFTs. The truth is that there are all kinds of cryptocurrency scams to watch out for, and new scams surrounding NFTs are popping up all the time.
Farrington says that losing your encryption can happen in two different ways. First, platforms like Coinbase can lock your account, and there’s really nothing you can do about it. Secondly, hackers use some very sophisticated methods to hack cryptocurrency exchanges like Coinbase or BlockFi with the aim of erasing your account. And when that happens, there’s really no recourse because crypto accounts don’t have the same consumer protections as regular bank accounts.
Farrington says that, for these and other reasons, he recommends that anyone with more than $1,000 of cryptocurrency get a hardware wallet and Metamask for storage.
“As you do more and more in the digital space, this wallet with Metamask will enable you to buy your NFTs and own your crypto keys,” he says.
Once you have the encryption keys and your account is secure, you can buy NFT at places like open sea And the rare.
“These are basically like eBay for NFTs,” says Farrington. In fact, just like eBay, you’ll find some NFTs that have a “buy now” option and others that are sold by auction.
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Explain the popularity of NFTs
At the moment, the highest NFT is CryptoPunks collection, which you can browse on OpenSea. Next is Promos Monkey Yacht Club.
In both groups, NFTs look just like a bunch of weird digital images of actual people and monkeys. Yes, I said monkeys!
I asked Farrington if he could explain why anyone would exchange over thousands of dollars in cryptocurrency for a digital photo that anyone could take if they wanted to.
According to Robert, some of the most popular NFT kits are built around a community, so you’re buying into a community of 10,000 like-minded individuals who might be doing things you care about.
The NFT you buy is a digital representation of that, and some of these NFT sets have personal encounters and other ways that add value.
“You’re buying a club membership,” he says.
There are also ways that NFT groups operate in the world of traditional marketing to grow in popularity. For example, the Bored Ape Yacht Club recently announced a collaboration with Adidas.
“The most valuable groups are the ones led by really strong communities that are very technology-focused,” he said.
And if you really want to understand the value of some NFTs, you can do so by thinking of them as valuable baseball cards. For one, a rare and valuable baseball card is a collectible featuring their favorite athlete. However, for others, the baseball card itself is an old piece of cardboard that they don’t care much about.
Farrington is very open about his NFTs, which include assets from the Royal Society of Gamers (a poker-based NFT community), Axie Infinity (a for-profit gaming platform that allows participants to earn crypto), and Carl Richards of Behavior Gap, who also writes In the New York Times.
Based on Farrington’s NFT assets, it appears his strategy mostly involves investing in his areas of interest and the things he loves. This is definitely one way to invest in NFTs.
“If you support artist and art, you can invest in NFTs this way,” he says.
Takeaway
I asked Farrington if he had any final thoughts for people “crypto-curious” who are ready to invest in NFTs. For the most part, he says you really have to start investing to learn more about how it all works.
“You just have to do it,” he says. “There is no easy way around it.”
You can start the process by looking at the NFT options on platforms like OpenSea and Rarible. From there, you can start comparing projects and see why they came up in the first place.
Once you purchase your first NFT, you can also join Discord – a social media platform intended only for people who own an NFT. You have to already own the NFT and prove that you have access to the platform, so start with something small to join the conversation.
“Once you do that, you’ll really start to open your eyes to what I’m talking about with the community,” says Farrington.
You’ll also realize that NFTs are much more than just a .jpeg format. Some experts say NFTs are the future of art as we know it.
