I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.
Throughout 2021, NFTs became mainstream across many communities online. Even today, there is a thriving digital art community that creates, buys, and sells NFTs to make some money.
Time and time again, we have seen individuals make a lot of money by selling this often misunderstood technology, making headlines across the world in the meantime.
Here you’ll learn all about NFTs, including how they are made, how you can make them, and how you can monetize them. While you’re not guaranteed a windfall, you will be entering a fast-emerging industry centered around a technology that could become ubiquitous in our digital futures.
To properly explore NFTs and how they work, we’ll need to get into some complex technical information. Where appropriate, we have linked to resources that verify details given in this guide and provide more reading material for those who want to dive deeper into crypto and blockchain-related subjects.
We should start by explaining what an NFT is – many people get it wrong!
5 Ways to Make Money with NFTs
What is a NFT?
So, let’s cover what an NFT is. Many misconceptions and misunderstandings surround NFTs, what they are, and what they do. First, we should explain what an NFT is not.
An NFT is not just some piece of digital art peddled by your favorite online influencer, it is a technology. NFT stands for Non-Fungible Token, which is a type of crypto asset.
That’s why the NFT community is closely related to cryptocurrency and why they share the same technological base – the blockchain.
As a side note for those who don’t know what the blockchain is, it is a chronological ledger of transactions and ownership information for crypto assets.
Most blockchains are simultaneously transparent yet anonymous and hosted across thousands of computers, so no one person can seize control and mess with its data.
Fungibility & Non-Fungibility
So, what makes NFTs special? Fungibility is where goods are mutually interchangeable. A pair of dollar bills are fungible, they are identical in terms of what we use them for despite being two different objects.
Individual cryptocurrency coins are fungible, too. NFTs are non-fungible, so they are functionally unique. By being stored on the blockchain, which keeps track of who owns the NFT and other relevant information, it creates digital scarcity.
This is something that hasn’t existed in the digital world much. Each NFT is unique and, by owning it, the blockchain records your ownership of the asset.
NFTs have been described as deeds to digital real estate, which is happening with metaverse technology!
NFTs Can Be Anything
The digital art scene is the largest and most successful expression of NFTs at the moment, providing many opportunities to make money and proving that the concept of NFTs can work.
If you are creating an NFT right now, it will probably be a piece of digital art as it’s the easiest to do and the most successful market for NFTs.
That said, pretty much anything can become an NFT. Artists like Grimes, Steve Aoki, and Kings of Leon have created music NFTs. Even the one-of-a-kind Wu-Tang Clan album, which is forbidden from public sale for the next eighty years, has been turned into an NFT.
As we cover later in this guide, NFT technology also got its start in gaming. Usable in-game assets can be NFTs. If it’s a unique crypto-asset verified by the blockchain, it is an NFT.
Through the blockchain, we can create unique digital assets that can retain value through their scarcity, as long as somebody is willing to pay for them.
One of the most consistent criticisms of NFTs is that digital art images can be copied and pasted, so they aren’t unique.
However, no collectible works like that – if you took a photograph of a Honus Wagner baseball card or the Mona Lisa, or even created a pixel-perfect recreation yourself, it wouldn’t have the value of the original.
If the NFT wasn’t backed by blockchain tech, it may be a valid criticism. It’s important to understand that the perceived value in NFTs comes from crypto communities where decentralized blockchains are considered the future of data storage.
If that happens, we may see NFTs used as digital signatures for contracts and other personal and business documents. There are many practical use cases for NFTs in the future and, by getting in early, it can be incredibly profitable for people to make unique content with them.
5 Ways of Making Money From NFTs
With that out of the way, we can start talking about money. NFTs are in their adolescence, the market for NFTs is expected to grow by 1,000x in the next year alone.
If you’re here, reading this, then you are already early to the party. There are five main ways of making money from NFTs right now – we have explained all of them below.
1. Create & sell your own NFT collection
The first way to make money from NFTs is what you’d expect – by creating and selling your own NFTs on the market. This helps if you’re a creator, of course, or just a creative person looking for an exciting new way to put your content out there.
Note that we are using details from digital art NFTs but, as we said, your NFTs can be music, literature, or even memes you have made.
Before you make NFTs, you need to ask yourself a few questions first:
- Are you creative?
- Are you good enough to monetize your work?
- Would your NFTs fill a gap in the current market?
- Can you build (or already have) a following online?
There are skill prerequisites that will make your attempt at creating NFTs much more successful. As for having an online following, this is one of the easier ways to monetize NFTs, though a string of cynical NFT rollouts from influencers has soured the idea for many people.
Nothing is stopping you from gathering a following and offering NFTs in good faith, however. With NFTs, creators will also be able to use smart contracts to benefit from programmable royalties.
This is where NFTs, when sold on secondary markets, can still make you money through a royalty payment, typically a short percentage of the amount the NFT sold for.
We have more information on how to create and auction an NFT later in this guide.
2. Trade NFTs
You don’t have to create NFTs to profit from them, you can just trade them instead! In fact, pretty much every art scene works like this.
For every one artist, there are ten collectors and traders who trade their art to make money. The idea is that certain NFTs will appreciate in time, either due to the quality of the content or external factors like the artist’s notoriety and cultural changes that make the NFT popular.
Just like buying into cryptocurrencies, you can buy NFTs and then, when they appreciate, sell them for profit. Naturally, this means putting your money where your mouth is and risking the NFT depreciating, which loses your money.
People have multiplied their investments by one-hundred or one-thousand times through NFTs. Your success hinges on knowing value when you see it and, if you do ride waves of speculation and hype, knowing when to sell before it crashes down.
3. NFT gaming
You can acquire NFTs through blockchain-based videogames. One of the earliest and most influential applications of NFTs was CryptoKitties, a game about trading unique cat sprite NFTs.
While many of those kitties aren’t worth much, there are rarer collectible kitties that are worth a lot. From there, many blockchain-based games allow people to pay to earn both cryptocurrencies and NFT – something now known as GameFi.
One of the most popular is Axie Infinity, a game about collecting, breeding, raising, and battling axolotl-like creatures. It exploded in popularity in the Philippines throughout the pandemic.
Many other projects are more affordable to play, including start-ups that are more generous with valuable NFTs for their first players. Getting in on these start-ups can be a great way to acquire NFTs that could appreciate in the future.
4. Staking NFTs
Just like cryptocurrencies, NFTs can be staked to earn a passive income from them. The blockchain tech behind crypto and NFTs needs to be maintained somehow.
By putting your crypto forward to be used by the blockchain, you will earn rewards for holding it, usually in the form of a percentage of its value. Think of it like a savings account where you accrue interest.
You can then withdraw the assets at any time, so staking is great if you’re holding digital assets for a long time. Just like with crypto, NFTs can be staked to receive cryptocurrency or incentives offered by certain NFT providers or games.
Staking works through proof-of-stake processes that verify blockchain transactions, avoiding the need for payment processors and other middlemen.
5. Investing in NFT startups
Lastly, you can make money by investing in the NFT startups themselves. These are the groups, companies, and game developers that are creating NFTs to try and make it in the market.
If you can identify one of these promising companies and invest in them, you can make some good money from long-term investing. To be successful, you need to know what you’re doing as an investor, and preferably have some experience in trading stock in companies.
The great thing about this is that, as NFTs become more mainstream, we should see startup companies based around bringing NFTs to all corners of data storage.
There may be limited options for investing in NFT startup companies right now but there should be in the future, so you should be ready to capitalize on those opportunities.
Creating & Auctioning NFTs: Step-By-Step
Of all the ways to make money from NFTs, creating and selling NFTs is one of the most complex, but profitable if done right. That’s why we have detailed the process of creating and selling an NFT in these eight steps below.
1. Buy cryptocurrency
To get started, you’ll need to get some cryptocurrency. Right now, most NFT creation and auctioneering platforms need a payment in cryptocurrency to mint your NFT, which is the process of taking your content and pinning it to a blockchain as unique data.
If you’ve gotten cryptocurrency before, you know how this works. Otherwise, you should follow these steps:
- Register with a service that allows you to buy cryptocurrencies, specifically Ether. Ether (ETH) is Ethereum’s proprietary cryptocurrency and, since most NFTs are tokens on Ethereum blockchains, they demand payment in ETH.
- With most cryptocurrency exchanges, you will need to verify your identity.
- From there, you need to move the ETH you have into a digital wallet. This is a process itself, so our next steps detail how to set up a digital wallet. If you already have one, skip to Step 4.
- If you already have a digital wallet, you can also buy cryptocurrency directly through them with popular wallets like MetaMask and Trust Wallet.
2. Create a digital wallet to pay for the NFT
If you haven’t already got a digital wallet, it’s time to get one. They are incredibly useful for managing cryptocurrency, NFTs, and other digital assets, and it’s safer than keeping them in a crypto exchange account as they are sometimes hacked.
Getting a digital wallet is easy, just go to the wallet provider’s site (like the two we linked above) and click “download” – simple as that. You can get digital wallets on both your desktop computer and your phone, for managing digital assets on the go.
Upon first opening the app, you’ll be asked to make a new wallet, which then gives you a ‘seed phrase.’ This is a list of words that verifies your wallet, so note them somewhere and keep them safe!
If you ever lose access to your wallet, it’s the seed phrase that could save your funds.
3. Add cryptocurrency to your wallet
Once the wallet is set up, you need to add cryptocurrency to it. If you’ve already bought cryptocurrency on an exchange, you should have the option to withdraw the crypto from there.
When doing so, you’ll get prompted to give a wallet address, a unique string of letters/numbers that anonymously identify your digital storage.
When transferring crypto, make sure that the details are accurate so that it doesn’t get lost! If you’re buying on the wallet itself, they should have a buy button that allows you to buy through services like Wyre or MoonPay, which allow you to pay fiat currency and get ETH in return.
Note that ETH, like most cryptocurrencies, can be exposed to volatility. Ether alone exploded in 2021, the price of 1 ETH going from below $1,000 to over $4,000.
The affordability of minting NFTs can change as a result, though it should be beneath $100 unless you’re trying to mint the NFT at peak periods.
4. Connect your wallet to a NFT platform
With your wallet set up and full of cryptocurrency, it’s time to connect it to an NFT platform. There are many out there but the largest and most trafficked are OpenSea and Rarible.
The process of connecting your wallet to an NFT marketplace is similar across wallets and markets, so you should be able to figure it out. On the NFT market site, you should make an account and then find the option to connect your wallet.
This is a lot like connecting your crypto exchange account to transfer cryptocurrencies. The site should ask for your wallet provider and address.
5. Upload the file you want to turn into a NFT
Now it’s time to upload your NFT content to the marketplace so that it gets minted as a unique digital asset. Naturally, you need to have content before you can do this.
We have some information on finding NFT artists in our FAQ section at the end of this page. On your chosen NFT marketplace website, you should find the option to create an NFT.
You’ll need to choose between a single piece of work or if it’s part of a set. Then, when you are ready, you can upload the content file. Rarible, for example, accepts all of the following formats:
Once uploaded, you’ll get a display of what the NFT looks like, then you need to confirm it. Congratulations! You have just created an NFT.
6. Set up an auction for the NFT
With the NFT created, you now need to sell it. You will typically have three options on how to sell your NFT:
- Fixed Price
- Timed Auction
- Unlimited Auction
A fixed price NFT is simple enough, it’s an instant purchase for those who want to get the sale over and done with. Most NFTs are auctioned and most auctions are facilitated on these online NFT marketplaces.
In some cases, they are big events that get media coverage worldwide. Take Beeple as an example. He is arguably the one who sparked the rise in NFT popularity last year after a prestigious auction house sold over a decade of his work as NFTs, raking in millions in the process.
Timed auctions last for a set period while unlimited auctions let people bid until you see a number that you like. With each of these options, you need to set a minimum price.
This can be difficult; you don’t want to scare buyers away. There are many fees in making and selling the NFT, so it’s hard to make a profit sometimes.
You can even lose money if you don’t ask for enough! You should set the NFT to “unlock when purchased” so that the buyer gets a high-resolution version of the content.
This can also be used to provide additional materials and unlockable content to the owner of the NFT.
7. Add a description for the NFT
It helps to add a little description to your NFT listing. It’ll also need to have a title, of course. The title and bio can dictate how many people see your NFT when searching the marketplace, which in turn dictates the likelihood that one of those people wants to buy it.
Think carefully for a memorable, meaningful, and relevant title and description for the content you’re offering. You’ll also get asked about the royalties, something we touched on earlier in this guide, and which percentage you’ll get from NFT resales.
It may be tempting to make this percentage high but this cuts into the future seller’s profits, too. Traders may not buy your NFT if the royalties are too high.
It’s a balancing act between what you want and what is comfortable for resellers in the future.
8. Pay the listing fee
The last thing you do is pay the listing fee with your connected digital wallet. The listing fee isn’t much but, when all the other fees are tallied up, it can get expensive.
In the case of Rarible, you can expect some of the following costs and fees:
- Buying the ETH in the first place.
- The listing fee.
- NFT generation fee.
- Commission fee on the sale of the NFT.
- Transaction fee for transferring money between digital wallets.
After all of these fees, you still need to make a profit on the NFT if it sells. Unfortunately, the nature of the blockchain and cryptocurrency value means that these fees all change with time, so they aren’t fixed and can be higher or lower depending on when you’re working with them.
From here, you just need to play the waiting game and hope somebody snaps your NFT content up.
10 Best Places to Buy & Sell NFTs
If you’re looking to trade NFTs, you need to know where to go. Since this is an emerging field, there are many marketplaces out there.
It pays to be on several if you can afford it and make money from peddling the wide variety of art they have. Here are ten NFT buying and selling platforms you should check out:
- Coinbase NFT
- Nifty Gateway
That brings us to the end of our guide on making money from NFTs. By learning everything you can about this emerging space, you’ll have the best possible chances of turning a profit by selling NFT creations.
You should get in touch with the community, and embed yourself within it, so your work becomes more acceptable to buyers who are looking for nifty art pieces or tradable graphics.
Whether you’re a content creator or you just want to trade other people’s NFTs, anybody can get started with NFTs across many different formats that will only expand in the future as the true value of this technology is realized.
When doing so, you’ll need to think like an investor if you want to turn a profit. If unique, blockchain-based data is the next big thing, embracing NFTs now also makes you one of the first-movers.
This can put you ahead of future competition and, again, help you profit from the NFTs that you make or trade. With all of that in mind, it’s time for you to start the process of making or buying your first NFT if you haven’t already.
If you ever get lost during the process, come back here for our step-by-step guide to making and selling them.
As we finish our guide on making money from NFTs, you probably have a few questions about the process. Here are five common questions that people have when trying to get into this exciting new market.
We briefly mentioned the expected cost of NFTs in our guide, along with a rundown of the many fees you can expect to face. As of writing in early 2023, it should cost a little under $100 to go through the whole process, including all the fees that come with it.
With that said, fees are paid in cryptocurrency that appreciates and depreciates in value. Using a price of 1 ETH for an easy example, let’s say that was how much you had to pay to mint your NFT.
In early 2021, this would have been below $1,000. Now, it’s over $3,000. You’ll be asked to pay much less than 1 ETH – minting an NFT isn’t that expensive and it’ll only get cheaper as the tech becomes more acceptable and mainstream.
So, the price can vary depending on wider market conditions and how busy the blockchains hosting the NFTs are. It may be cheaper than you expect or more expensive, and you’ll get an idea of how much it costs once you’ve gone through the process a few times.
We can’t tell you if you’ll have success with your investments or not because we simply do not know. Investing is tough for many people, especially those who don’t have patience and let emotions lead their decisions.
Your success will depend on your decision-making, just like when you invest in stocks or cryptocurrency. If you made the NFTs, you’ll need to make them reasonably priced so that they are snapped up.
What constitutes reasonable considers the content, its quality, your online presence as an artist, and whether you have a community built around you already.
Maybe you don’t have any monetizable skills you can transform into NFT content. If you don’t have the art credentials, nothing is stopping you from paying an artist to make the art and then turning it into an NFT yourself.
This will be yet another cost, so it makes it even harder to make your money back, but it can pay off if it’s a collection of art that is minted as a collection of NFTs.
It can be hard to build hype around your NFTs when you’re not the artist and, for copyright concerns, the artist should agree on you using them for NFTs.
There are many websites where artists and other creators gather and perform outsourced work. Check out websites like Fiverr, Upwork, and Freelancer.com to see if anybody there can help you out.
NFTs sell best when you already have a platform to sell them from, just like with traditional art or book sales. That’s why it may be a great idea to immerse yourself in NFT communities on social media sites like Twitter, Reddit, and Discord.
From there, you can become friends with people who know all about NFTs, learn more, and become part of the community. It also makes it easier to build a community of your own by announcing that you’re working on an NFT project and, when the time comes, delivering on that promise.
Assuming the art is good and members in the community like you, they’ll buy and signal boost your NFTs and enable you to make more money from sales.
Of course, gathering followers online is easier said than done, you’ll need to contribute valuable information or wit to the online discussion for people to pay attention to you.
The amount of money you can make from NFTs depends on how good you are at making the content, how much you get noticed by the community and your asking price.
The most expensive NFTs were sold at auctions, where collectors and traders ramped up the price by competing against one another.
Auctions are how some of the most expensive things in the world have been sold, so trying to auction your NFTs is a good idea. There is a caveat – you need to have people interested before the auction even starts.
You need to get your name out there, get a following, and have fans that will outbid each other.
I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.More Posts