CONNECTING YOU TO OPPORTUNITY
NFTs. Non-Fungible Tokens. Crypto fad or legitimate business concern? Both? It’s clear some people are making money by creating, owning, and selling them. A lot of money – both fiat (real) and cryptocurrency.
You’ve probably heard about Twitter co-founder, Jack Dorsey, selling the first ever tweet as an NFT for $3 million dollars. You might even know digital artists like Arab Punkz, who’s championing NFTs in the MENA region.
However, you might be wondering what exactly NFTs are (we’ll get to that), and why some people are spending millions on seemingly intangible digital assets.
Looking ahead, building a business around them could be a very stable and profitable enterprise. But can entrepreneurs truly turn NFTs into a viable business effort today?
What is a non-fungible token (NFT)?
Let’s start with the non-fungible part. This simply means that an asset is unique and cannot be replaced with anything else. Think of a rare trading card – or even a specific print run of that card. You know when and where it is from, and while there may be other similar trading cards, there is not another one exactly like it on the planet.
Now for the token part, this really just relates to any digital asset. That could be a drawing, a video, a piece of music, a piece of code even.
But can’t these be copied – and relatively easily at that? Well, yes. This is the part people really struggle with. Digital art can be copied infinitely without any loss of quality – so anyone can have a literal replica of an NFT. However, what they won’t have is ownership of the exact token.
Think of a famous painting like the Mona Lisa. There’s only one actual version of Da Vinci’s masterpiece – hanging in The Louvre Museum in Paris. But how many posters, t-shirts, mugs, and keyrings bear the same image? Millions. But there’s only one original.
So it is with NFTs too. And because of how blockchain technology works (which itself merits a thorough explanation) the original token is easily verifiable and impossible to fake.
How to make money with NFTs
While we can see NFTs as similar to a work of art – as their intrinsic value is defined by quality, quantity, desirability, and authenticity – when it comes to making money with them, there are additional ways to unlock value from these digital assets.
Unlike physical art, NFT creators can set fees on future sales so that they always benefit from their work. Say they list a piece at the equivalent of $100 in their preferred cryptocurrency and set the kickback at 10%. From then on they will receive 10% of every sale. So if the work takes off, they’ll always be paid for that success. Suddenly, the opportunity for artists to digitise their work becomes more attractive.
Not so artistically skilled? If you’ve got a habit of spotting trends before they begin, you could consider investing in NFTs; effectively ‘HODLing’ them (to borrow a crypto term) until their value rises. You don’t even need pockets as deep as Dorsey’s to get started – many NFTs sell for hundreds (rather than millions) of dollars.
However, as with any new technology, it’s a little bit like the Wild West out there. To make smart decisions, you need to be dialed into where the technology is today and where it is going.
Not keen to play the money markets, but still want in? If you’re technical and want to leverage your coding skills and creative vision, you could join or create video games built around tradeable NFTs.
Game development itself is becoming more and more accessible – particularly for mobile platforms which are now dominating the overall gaming market at well over 50% of its overall revenue. And given the boom in NFTs, there are also plenty of investment opportunities out there too.
Consider Genopets, billed as the first “move-to-earn game”. It’s a great fusion of mobile gaming and NFTs; and has a focus on health and wellbeing. They have brought those ideas together to create a community of over 200,000 people ready to play – with over $8 million in seed round funding.
Their product aims to balance an economic system of transfers, promoting interaction and wellness to generate further tokens for trading. If they can do it, so can you.
Play the market
Continuing the technical theme, setting up a place to buy and sell NFTs – building your own NFT marketplace – might be one of the biggest opportunities for people to make money in the space. As Mark Twain once said, “When everybody is digging for gold, it’s good to be in the pick and shovel business”.
Yes, delivering services that support the industry could be a smart move. And while you might not (yet) be able to match the popularity of OpenSea, when it comes to NFTs, no matter whether it’s a focus on the art or the trading of assets, there are always communities that need to be built first.
If you aren’t up to speed on digital communities, many of them now build out from Discord and Reddit as forums where users, enjoyers, and enthusiasts can interact with one another as well as interact with the creators of the things they love.
If you’re an aspiring artist then start by creating a name for yourself in communities which focus on the art itself such as SuperRare. And don’t forget that real-world communities are just as important as digital ones.
Places like the UAE continue to attract technical talent by making it easier to move here. So, if you’ve got a great idea and need high-tech support to get it off the ground, you’re in the right place.
Keep it ‘real’
Needless to say, the potential of NFTs has got big companies around the world interested – with the likes of McDonald’s and Coca-Cola (to name just two) getting in on the action. However, the brands that are embracing both the digital and physical seem to have a better chance of longevity.
Consider how Nike, at the end of 2019 patented the tokenization of their shoes. This effectively allows buyers to not only own their shoes but also a digital record of their ownership in the form of an Ethereum-based token: referred to as CryptoKicks. Nike envisages that these tokens could be used to curb counterfeit merchandise in the future.
A little closer to home, a partnership between Saudi artist, Abdullah Qandeel, and Velas, a decentralised crypto platform has resulted in something truly unique. After creating an NFT video featuring Abdullah custom-painting a Lamborghini during an event at Dubai Opera (with DJ Peggy Gou performing alongside), the NFT plus the car were auctioned off as linked assets.
The resulting royalties are being donated to charity and will continue to earn money as the assets are traded and accrue in value.
What to remember
In a tech space where the world evolves in the blink of an eye, keeping track of everything is a real challenge. If you want to make money with NFTs then you need to focus on exactly how you’re going to do it.
We’ve touched on a range of examples here, but there are so many more out there and lots that none of us have even considered yet. Ultimately, if you’re starting a business then do the work, spend the time researching everything you can, and build what excites you – with NFTs, there is plenty of space for all of that.
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