Non-fungible tokens (NFTs) are quickly becoming one of the most successful blockchain-based projects ever.
People are rushing to buy and sell NFTs today as trading these tokens is a profitable business.
But, before you start trading NFTs, it is crucial to understand what they are and how they work.
So, what are NFTs?
NFT is an abbreviation for non-fungible tokens that function similarly to cryptocurrencies.
However, cryptocurrencies are fungible, which means one BTC is equivalent to the other.
NFTs are non-fungible, making them similar to physical assets that you could sell in a shop.
With their unique properties, NFTs can be thought of as credentials that represent ownership of non-fungible assets.
These can include real estate, collectibles among others. Basically, NFTs allows you to tokenize every asset in your possession.
So, how do NFTs work?
As I already mentioned, you can use NFTs as a provenance (proof of ownership) of luxury goods.
Additionally, you can buy, sell and trade these non-fungible tokens on digital marketplaces such as Nifty Gateway and OpenSea.
If you are interested in making profits through NFTs, here is how you can start trading them.
How to Start Trading NFTs
There are several different ways to trade NFTs. These include:
- Directly trade NFTs
- Decentraland
- Create and sell NFTs
- Invest in the NFT industry
Let’s discuss these options in detail.
Directly Trade NFTs
If you are thinking of trading NFTs, the first and simplest way to start is by buying and selling the tokens.
You will need to visit a dedicated marketplace or app to find and purchase or sell these NFTs. Luckily, there are plenty of online markets where you can discover NFTs for sale.
However, they aren’t all similar – each has a slightly distinct focus and benefits.
Whether you want to buy or sell NFTs, you need a digital wallet. However, not all wallets support NFTs; therefore, ensure yours does before you fill it with cryptocurrencies.
When the wallet is ready, you can start buying NFTs with the crypto. Once an NFT transaction is validated, it will be permanently recorded on the blockchain and NFT will appear in your wallet.
Decentraland
If you are not a big fan of buying and selling these tokens directly, Decentraland offers a more hidden way to trade NFTs.
Decentraland is a digital platform where the world is made up of land parcels, each of which is an NFT that you may buy and claim as your own.
You can use these land parcels to create anything you want, perhaps buildings or advertisements like the real world.
Additionally, the value of these parcels may rise as the world becomes more popular or land becomes scarce/valuable.
With a wide range of NFT trading options, you can sell or rent these land parcels to other creators – making profits in the process.
Create and Sell NFTs
Another great way to make money trading NFTs is simply making and selling ones that other traders might be interested in purchasing.
Creating a piece of digital asset that other people might want to buy is not difficult in itself. Transferring it into an NFT, on the other hand, can be a little more complicated.
Luckily, most blockchains that allow NFTs will have templates that you can use when creating these non-fungible tokens.
Invest in the NFT Industry
If you aren’t into trading NFTs directly, you may want to try trading NFT marketplace tokens.
This option is more profitable as the value of tokens used to perform the transactions climbs as the market expands.
In fact, some of these NFT marketplaces are large enough to be traded on cryptocurrency exchanges.
Apart from that, you can opt to trade cryptocurrencies utilized in trading NFT.
Cryptos, such as ETH, is used for both NFTs and conventional purchases; therefore, the value will rise, and the resale tokens would be profitable.
How to Start Trading NFTs
Are you thinking of investing in NFTs? Here are a few options you can try;
- Directly trade NFTs
- Decentraland
- Create and sell NFTs
- Invest in the NFT industry