Cryptocurrencies witnessed a considerable dip during the turn of 2022, but the non-fungible token (NFT) market was in stark contrast during the same period – amassing $41 billion throughout 2021. As investors continue to expand their portfolios, one theme that draws their attention is blockchain-linked digital assets (NFTs). Early examples of these assets include tokenized artworks, physical goods, real estate projects, etc.
This blog will discuss how to approach NFT investing (for beginners) – highlighting the ebbs and flows of the market – including potential return-on-investment (ROI) areas – everything from the comfort of your home.
“Everything in life goes back to the basics.” – said by Kron Gracie (the Mixed Martial Artist)
Likewise, it’s time to restore;
Some Basics on Non-fungible Tokens (NFTs)
While tradeable and interchangeable assets are fungible, non-interchangeable assets are non-fungible tokens. Bitcoins, for example, are fungible, meaning that consumers can exchange one Bitcoin for another and get the identical asset.
Non-fungible tokens, on the other hand, are one-of-a-kind and cannot be duplicated. Because of this distinguishing feature, NFTs are represented on the blockchain as tokens that reflect digital ownership. Because its existence is time-stamped on the blockchain, this record of ownership cannot be modified.
NFT Use Cases in 2022: Real-World Industry Applications
#1 Real Estate
Blockchain technology will eventually lessen the risks of property transfers between parties by eliminating the middleman. Many analysts believe that NFTs have the potential to drastically alter the global real estate business by syncing with the Metaverse and changing people’s perceptions of property as a commodity and their expectations from transactions.
Prometheus, a real estate developer, recently sold two luxury units in Portugal using Cardano cryptocurrency and offering ownership through NFT. Through Blockchain-enabled technology, future property owners will be able to sell their property with a single click.
NFTs accrue immutable value in the ever-evolving Sporting world. National Basketball Association (NBA)-accredited NBA Top Shot is a prominent marketplace platform exhibiting digital collectible NFTs. This platform took sporting fandom to a whole new level with monetization opportunities.
NFT Art is a digital artwork distributed in NFT format, including photography, video, internet memes, and more. The Merge (Pak’s piece) holds the expensive NFT art record at $91.8 million, followed by Beeple’s artwork at $69 million.
Apart from tokenizing traditional artworks, the NFT space has engendered the generative art trend. CryptoPunks – the Larva Labs-owned NFT project – kickstarted the AI-powered art trend in the blockchain. Then, projects like Bored Ape Yacht Club (BAYC) and Artblocks carried it forward.
Potential Money-Spinning Areas
If you’re wondering how to earn money with NFTs, you need to know the strategies to give you the best chance of success.
#1 Act Early
Investing in potential new collections early, before they soar in value, is one of the best ways to make money on an NFT. Many of the greatest NFTs to buy were initially released at a low price, but their value skyrocketed in the weeks and months following their release.
#2 Play-to-Earn (P2E) NFT Games
If you’re wondering how to make money using NFT tokens, another option is developing a play-to-earn NFT game. Partnering with an NFT Development company allows you to arrive at an avant-garde NFT game. P2E features, which allow players to earn prizes through competent gameplay, are currently included in many top NFT games. These prizes are typically valued in the platform’s native cryptocurrency, which can be used to purchase in-game things or converted into fiat currency.
#3 Buy the Dip
Buy low, Sell High or Buy the Dip or NFT flipping – whatever you may call it – is another effective way to make money. Finding the greatest NFT to generate money and then flipping it for a profit is difficult, especially in today’s market with so much competition. It is not difficult, however, despite the fact that there are various aspects to consider while investigating how to profitably flip NFTs.
#4 Generating Royalties
Royalties are one of the fascinating aspects of the market, as they go hand in hand with selling NFTs. The creator can specify their royalty % during the minting process, ensuring that any secondary market sales compensate the original inventor. Most NFT royalty amounts are set at 5% or 10%, while some go higher than that.
#5 Rent your NFTs
Renting out NFTs is one of the finest methods to make money with them. For NFT developers and collectors, renting out NFTs can be a useful source of passive income. The fascinating part is that you don’t have to build new NFTs if you utilize them for a long time.
You can rent your NFTs to fellow investors; however, make sure that NFTs are cross-chain compatible. Embracing the cross-chain NFT development along with your investment strategy will do good!
Investing in NFT Product Companies
Buying/selling NFTs is a direct investment; however, you would want to invest in the exposure of this futuristic technology, won’t you? Investing in NFT companies is a wonderful method to do this. As the name implies, these companies have direct or indirect exposure to the NFT industry, allowing stock investors to speculate on the sector’s growth.
Investors embrace the NFT world, encompassing the potential business opportunities that can grow into every possible sector.
As mentioned earlier, we recommend partnering with a blockchain expert in whatever venture. If it’s an out-and-out investment, you can approach consulting firms, like AppDupe’s crypto art consulting services. Or else, if you like to build a business model around NFTs, partner with an NFT Development company to ensure hassle-free proceedings.