A non-fungible token (NFT) is a non-interchangeable unit of data stored on a blockchain. It is associated with digital files such as photos, videos, illustrations, animations, and audio. Nowadays, people make money by creating NFT because it is recognized as a digitalized asset that may be traded or invested.
Historically, the first known NFT was created by Kevin McCoy and Anil Dash consisting of a video clip made by McCoy’s wife Jennifer. The video clip was registered in the Namecoin blockchain and it was sold for $4 at that time. Afterward, the first NFT project, Etheria, was launched and demonstrated at DEVCON in London. Surprisingly, most of Etheria’s 457 purchasable and tradable hexagonal tiles went unsold for more than five years. Yet, when renewed interest in NFTs sparked a buying frenzy, all of Etheria’s tiles were sold within 24 hours and sold for a total of $1.4 million.
Basic Concept of Making Money in NFTs and Its Phenomena
The popularity of NFTs affects traders and investors to hunt valuable NFTs. It creates NFTs as a valuable asset that cannot be expected before. Sometimes, the price of NFTs is unreasonable and it is similar to arts. Undoubtedly, the buyers decided to purchase NFT for such an emotional reason. For instance, the Indonesian NFT creator made millions of dollars for the daily photos namely “Gozhali Everyday”.
None of the technical arts is used to create Gozhali Everyday. It is only the daily photos of the creator for five years with similar poses. Also, the creator itself is not a popular person or an influential person. NFT of Gozhali Everyday is only the photo of Gozhali, the creator, in front of the camera when sitting down on the gaming chair.
The unreasonable price of NFT is similar to the art painting, especially abstract style. Yet, the art painting is sold for a high price because of the message derived from the painter. And, the painter usually is a popular person, or at least the painter delivers a strong message in the art that can be understood by the buyer.
However, the basic concept of NFT reaches a high price and is popular among traders or investors in the cryptocurrency market because of the system of NFT itself. Ownership of an NFT does not inherently grant copyright or intellectual property rights to whatever digital asset the token represents. While someone sells an NFT representing the creator’s work, the buyer will not necessarily receive copyright privileges when ownership of the NFT is changed and so the original owner is allowed to create more NFTs of the same work.
In fact, it can be a solution for artists to create their works as NFTs. A non-fungible token provides artists to create many works, which are digital art, games, music, film, photos, and other associated files. The NFT market experienced rapid growth during 2020, with its value tripling to $250 million. Additionally, in the first three months of 2021, more than $200 million were spent on NFTs. In short, it is an opportunity for making money to whoever creates NFT.
Do We Need to Buy NFT?
The inquiry above represents that we are not sure about the NFT. Not only NFT can be a valuable asset in the future but also it is able to become worthless. Even though the NFT price is affordable for you, it does not make you have to buy it. It depends on how do you acknowledge NFT for making money.
In this case, artists can take an opportunity to produce their works as NFTs because it possibly helps them make money from their work. The NFT market grows rapidly recently so it is a chance to join as an NFT artist. Due to the fact, the price of their works can be sold for a high price in the cryptocurrency market.
Meanwhile, if you only feel fear of missing out (FOMO), I suggest you learn more about NFT to make sure about the NFT market before you put the money for purchasing the NFT carelessly. Some NFTs’ prices may increase rapidly so they can be digitalized assets in the future, but so many NFTs have become worthless. Undoubtedly, you must decide to purchase a potential NFT that may the price increases in the future rather than you are FOMO and purchase worthless NFT.
At least, you have to purchase NFT considerably and look at the creator of NFT you want. Similarly, when you buy a painting from a popular painter, the price of the painting you bought will increase automatically during the time. Whereas if you do not know who the creator of NFT is, be considered the NFT that you bought belongs to a huge community so you can sell it in the community group.