Making Money off NFTs: What You Need to Know
Non-fungible tokens (NFTs) may seem like the next big thing, but if you’re not careful,
they can be more of a hindrance than an asset. In fact, NFTs aren’t even legally considered to be tokens, which means that many people who own them technically don’t own any value at all.
But this doesn’t mean you should ignore NFTs altogether; there are plenty of ways to make money with them if you know what to do and what to avoid!
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The main factor
Overlooking a few other factors is a quick way to lose money on non-fungible tokens. You need liquidity, so you’re not left holding an asset that’s hard or impossible to trade.
And while rare items could theoretically retain value as collectibles, doing so in a digital world means you must figure out how to maintain that interest over time; otherwise,
your assets become worthless. As always, make sure you do your research and understand what makes a good cryptoasset before buying into one.
No matter which asset you decide to buy into first, take care not just with which token/NFT/cryptoasset you buy but also where and from whom.
Don’t be afraid to ask questions, especially if you don’t fully understand something—the community is generally happy to help.
If you have friends who are interested in trading cryptoassets, set up a Slack channel together or start your own Telegram group chat to keep everyone updated about potential opportunities.
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When should you purchase with ETH or USD
One of the most important questions you can ask yourself before purchasing any non-fungible token is, Will its value increase over time? The reason for asking is because you want to avoid losing money in an investment that quickly becomes obsolete. To help make your decisions easier,
here are a few general rules of thumb. When buying with ETH: If your purchase will be significantly more valuable with updates or new features added down the line,
it’s worth it for you to buy in ETH (not USD). Also consider that if there is no secondary market and liquidity right now
(which is currently true), then there will not be one when you decide to sell either. Therefore, you may need to wait longer than you expect to get out of your position.
When buying with USD: If you’re looking at a project whose purpose doesn’t change much but is still fun,
check out what their future plans are; if they have plans for significant upgrades/improvements in the near future, it might be worth paying extra today so that once those changes happen, you’ll benefit from them as well.
For example, CryptoKitties was popular because people loved collecting and breeding cats; however once they were able to get their hands on rare kitties through auctions and raffles they became even more popular.
Which games should I buy into?
There’s no one size fits all answer here. It depends on your goals, time available and more. Even if you only have a small amount of money to invest in NFTs, it can be worth it to pick up game-specific items that are likely to retain value over time (as a collectible).
Of course, make sure you’re buying from a trusted seller and understand there is some risk involved. If you’re looking for a quick flip, then go after assets that have high liquidity and low volatility. But remember
—the odds aren’t always in your favor! If you find yourself consistently losing money when trying to turn an asset into cash, then maybe it’s not right for you.
And if you don’t want to deal with any risk at all, then stick with tried-and-true investment vehicles like stocks or bonds. They may not offer as much upside as digital assets, but they’re also much less risky.
How do I know if a game will be successful
As with any investment, it’s impossible to predict if a game will be successful.
That said, there are a few good ways to measure success in terms of an interactive experience.
If a game can hook users and make them play again and again, or if they find they just can’t stop playing it—even though they could easily quit at any time—
then that’s a good sign that you have something special on your hands. To find out more about whether a game will be successful or not,
check out our guide here. If you have further questions about monetizing non-fungible tokens (NFT) or creating games on crypto collectibles platforms like Enjin Coin and Rarebits check out our post here.
Or if you want to learn how other companies are making money with blockchain gaming, read our guide here. We’re always happy to help! 🙂
Can I resell my cryptocollectibles?
Yes and no. The answer is dependent on a number of factors, including
(1) whether your particular cryptocollectible is truly an asset (i.e., an item that could be exchanged in a marketplace, versus an object that cannot be traded) and
(2) what kind of platform you are using to make exchanges between users (or whether there even are such platforms). While some types of cryptocollectibles can function as actual assets, many others will remain mere objects
—and not all trading platforms can facilitate every type of trade. This guide provides more details on how you might legally exchange your crypto collectibles for money or other forms of value;
it also discusses how NFTs can be used for personal vs. commercial use.
Note that we provide these resources for informational purposes only and do not intend them to constitute legal advice or solicitation of any form.
Please consult with an attorney regarding specific circumstances related to your business plan or project before taking any action.
The resale rights of blockchain-based collectibles differ from country to country, so make sure you check local regulations before attempting to resell items like CryptoKitties or CryptoPunks.
In most cases, blockchain-based items have been classified as intangible assets rather than tangible property—
which means they’re generally treated like digital goods in most countries around the world (including Canada and Japan), but may also be subject to different laws depending on their intended use case.
Other advice
While non-fungible tokens are a new concept for most consumers, it’s actually not that far removed from other kinds of digital assets you already use. For example, there’s a good chance you’ve purchased and used gift cards online.
Or maybe you have bought digital art and paid for it in cryptocurrency. (Non-fungible tokens are sometimes called cryptocollectibles, and cryptogoods as well.)
Though these two categories aren’t exactly one and the same, they do share some key features.
To start with, they don’t give their owners any particular rights or privileges—unlike stocks or bonds issued by corporations.
Instead, what makes them valuable is their intrinsic value.
They can be traded like any other kind of collectible item, such as rare coins or baseball cards.
And many people find collecting these items fun and rewarding. The primary difference between cryptoassets and traditional collectibles is that cryptoassets can be easily traded on a blockchain network NFTs
—meaning you can buy them directly from another person rather than going through an intermediary like eBay or Amazon. This also means you can sell them more easily. But whether you’re buying or selling, both parties need to know that what they’re trading is authentic and legitimate.
Otherwise, no sale will take place. That’s where provenance comes into play.
Provenance refers to how a product has changed hands over time—and how its ownership history can be tracked via a secure ledger system such as blockchain technology.
It’s similar to having an authenticity certificate on your collectible asset; it ensures everyone involved knows who owns which token at any given time and helps prevent fraud or counterfeiting.
