Minting an NFT involves using smart contracts to assign the transferability and ownership properties of the artwork. In essence, the process involves the following steps:
- Creating a new block into the Ethereum cryptocurrency blockchain.
- Validating the smart contract information.
- Recording the ownership information into the cryptocurrency blockchain.
Finally, a minted NFT token gives the owner a unique identifier linked to an Ethereum address. One of the most remarkable parts of NFTs is that creators and collectors can easily verify the information in any marketplace. It’s important to note that NFTs mostly exist in Ethereum and may only be transferred through an Ethereum-based marketplace.
How Do Royalties Work with NFTs?
An interesting thing about NFTs is that the creator can earn royalties as soon as the NFT is sold to someone else. Depending on the marketplace the creators work with, they may earn different royalty percentages for their artwork; for example, the owners of EulerBeats Originals are earning approximately 8% in royalties every time their NFT token is sold.
Most NFT and crypto markets support creators through considerable royalty percentages. However, other sites are not as friendly for creators. In essence, you must look for the right platforms if you want to earn something for your NFT sales in the future.
Thankfully, the royalty payment process is entirely automatic on most sites. In these cases, the creator is going to earn money each time they sell the NFT. In case your NFT already has a royalty program in it, all you have to do is wait until you sell it to someone else.
How Does Asset Scarcity Work with NFTs?
In most cases, the artists decide how scarce their digital assets (or assets in general) are going to be for the world; for example, there may come a time in which you want to sell tickets for an event as NFTs. There, you can decide how many replicas of the same NFT you’re going to sell on the market. Regardless of the option the artists choose, each NFT is still going to have a unique identifier with a single owner.
While most artists use NFTs to create a one-of-a-kind token to increase its value, they may also use them to create a limited amount of the same asset.
How Can You Make Money with a Non-Fungible Token (NFT)?
As stated before, NFTs can be bought and sold as the artists/collectors consider appropriate. However, some artists still haven’t figured out how they can sell their art on the internet and make a profit from it. While the process may seem a bit complicated, it’s not as hard to start making sales with their artwork; all it takes is choosing the right platforms to work with and set up an Ethereum wallet.
Before the NFT world started to increase in popularity, most digital artists used social media to create a community, seek exposure, and sell their art on the blockchain. However, one downside to this method is that the artist typically would have to pay the social media platforms money to gain exposure, which didn’t ensure that the art piece was going to get sold.
In the case of NFTs, the funds go directly into the owner’s crypto wallet once the tokens are sold. Additionally, if the new owner sells the digital asset to someone else, the original proprietary could earn royalties automatically, making the process even more convenient for everyone. Once the artist receives their money, they can go into their crypto wallet and exchange the Ethereum tokens for cryptos like Bitcoin or other assets.
The Main Problem with NFTs on the Market
Considering the high value most NFTs have (remember that some of these assets are being sold for millions of dollars right now), some people are still skeptical about them. The main argument from these people is “I can just screenshot that picture and have it for free.” As mentioned before, anyone could simply go into the internet, look for a picture of the Mona Lisa, and download it. However, that doesn’t make you the proprietary of the original piece.