During the gold rush, most would be miners lost money, but people who sold them shovels and blue-jeans made a nice profit - Peter Lynch
In the first part of this series, I explained the evolution of the internet from Web 1.0 to Web 3.0. I also gave a high-level overview of NFTs, the technology behind them, and how they will shape the future. If you haven’t read that post, click the button below and read it first before coming back to this one.
This article, the final part, will examine two major concepts:
✅ What makes NFTs so valuable
✅ How you profit from the Web3 economy
Let’s get into it.
What makes an NFT project valuable.
If you’ve kept abreast of news in the crypto space over the last year, you will have heard the news of NFTs sold at mind-blowing prices. We saw NFTs from artists like Beeple sell for over $5 million, and pieces from the Cryptopunk collection sell at over $10 million. (P.S. You can check out some more crazy NFT stats here).
If you go on Opensea (the world’s biggest NFT marketplace), you’ll see NFTs with prices starting at a few dollars and going up to millions of dollars. However, the question remains, what makes an NFT project or piece valuable? In my opinion, there are three things that make an NFT project valuable:
The prestige of the artist/creator/team: Like any other piece of art, the more popular the creator or creators of an NFT project are, the more valuable the project is. This is why Jack Dorsey could sell the world's first-ever tweet for $2.9 million.
This points to the fact that there is real-world utility in building a name and reputation for yourself in any space you occupy. Rather than being one of the many “numbers,” you want to grow and increase in expertise until your name is enough to grant you prestige. But that’s a story for another day.
The community surrounding the project: One of the most powerful features of the internet is its ability to pull many people together. Now, people can connect over mutual interests, and when that energy is harnessed, great things can happen. A great example of the power of community action would be the case of #EndSars in Nigeria. What started as a few tweets and a hashtag grew into a wildfire that raged for almost a week as thousands of people from different locations and backgrounds united for a single cause.
Web3 and NFT projects bring this concept to life with DAOs - Decentralized Autonomous Organizations. Basically, these are projects owned and controlled by communities. By giving community members tokens of the projects, those members can vote and choose just how the project grows and evolves.
It's like everybody is a member of the board and can decide what happens to the project.
The best and most valuable NFT projects have loads of people talking about it, buying it, and supporting it. This can give the NFT project perceived value and translate into financial value; after all, if so many people were willing to support and invest in a particular NFT collection, it’s perceived to be more valuable than a similar project but with less attention.
The art itself: This is simple enough. The more people like the art, obviously the more valuable it will be. Nothing special.
This knowledge becomes essential if and when you’re looking to invest in NFTs. You want to ascertain that the project is backed by a qualified and well-known team and has an active community, all of which are good indicators of the project’s chance of success.
How to make money from NFTs
Before I talk about the ways you can make money from NFTs, you need to understand these two things:
✅ NFTs are not a get-rich-quick scheme where you magically make 1000X in a few days. You have to invest time, money, and energy to profit from the Web3 ecosystem like any other industry.
✅ More risk means less reward and vice versa. Anyone who promises a risk-free investment into any NFT or Web3 project is trying to steal your money.
That being said, let’s take a look at how to make money from NFTs
1. Become an NFT Creator
You can make money by creating NFTs for sale. This works if you are a digital artist or a creative. You can create your art and mint it on platforms like Opensea, Rarible, Nifty Gateway, Foundation.app, or any other NFT marketplace. (You can read more about NFT creation here)
Alternatively, you can create a team of qualified and well-known personalities in the crypto/web3 space to create a project and draw the right kind of attention. Of course, you will also need to do some marketing and build a community around the project.
2. Become an NFT Collector
Another way to profit from NFTs, and the most popular, is to buy NFTs or collect drops from different projects. If you can get in early, you wait for the value of the pieces to increase and then sell them off.
However, there are two main problems with this strategy:
Buying NFT projects that will be valuable can be pretty expensive, especially for the average young Nigerian reading this. Gas fees alone can cost you up to $200 (₦500k). Plus, there is a danger of you buying NFTs that will eventually become worthless.
You can get NFTs for free via community drops, as many projects drop free NFTs to their community members as a way of growing the community and incentivizing adoption. However, your chances of getting a valuable NFT are quite low. The truth is, there are a lot more low-quality projects than high-quality ones, and seeing as you have limited time to chase free drops, you need a better strategy.
3. Become an NFT builder
The last path to NFT wealth is my favorite, and it involves becoming a builder. I’ll explain the concept of becoming a builder with a story of the shovel sellers.
The case of shovel sellers
In the 1840s, gold was discovered in the San Francisco area, and over 300,000 people rushed to California in what is now known as the California Gold Rush with the hopes of getting rich.
Guess what happened?
Most of those who went to prospect didn’t find gold and become rich; instead, many found iron pyrite, an ore that looks just like gold but is ultimately worthless. This is the source of the idiom “fools gold.”
However, a class of people got rich and funny enough; they weren’t prospectors. The ones who made the most money from the Gold Rush sold shovels, pickaxes, and blue jeans that the gold workers wore. Think about it, anyone searching for gold would have to buy shovels, picks, and other tools, whether they found gold or not.
In the same vein, becoming a “shovel seller” in the NFT space means positioning yourself to provide the services that any and every NFT project will need.
I have researched some of the must-have skills in this NFT economy, and some of them are:
✅ Blockchain development - Every NFT project needs developers that can write smart contracts and create the project.
✅ Content creation and storytelling - Every NFT project needs someone that can help them tell the stories that will attract people.
✅ Social media management - NFTs thrive on social media, especially Twitter. You become valuable to every project if you can successfully engage users, drive traffic, and generate impressions for any brand.
✅ Community management - This is perhaps one of the biggest opportunities in the NFT space. Every project needs people to manage members communicate information, organize events, and so on.
The idea is that you offer what these projects need and get paid for it. This is why having a digital skill in the Web3 world is non-negotiable.
In the past month, I've worked with over four different NFT projects to create content for their community or web content for their websites. My friend, Orezi Mena, does UI/UX and product design for NFT projects and is making a killing.
But, that is not the best part.
The best part is that you gain insider knowledge into which projects are valuable. Any project willing to hire a professional (i.e., you) and pay premium rates will likely succeed. Because you have insider knowledge, you can now channel your energy to buy or collect an NFT from that project.
That is leverage.
A recap of what you’ve learned tonight:
✅ NFTs get value from the prestige of the creators, the community surrounding them, and the art itself.
✅ The three main ways to earn from NFTs is to:
Create and sell NFTs,
Become a collector that waits for the price to increase and sell
Become a builder that uses their skills to make money from the industry
✅ Becoming a "shovel seller" is the most cost-effective way to enter the space. You get paid for your skills in the short term, and you gain important information that you can leverage to trade
While I have tried to make web3 and NFTs sound easy to understand, there is a lot that I haven’t covered. So, I decided to attach some resources that I found helpful in my journey. I hope they provide more clarity.
1. One of the best YouTube videos I found. (N.B. - It’s 20 minutes long)
2. A great Twitter thread with links to other resources:
3. Medium article on introduction to Web 3- https://medium.com/geekculture/an-introduction-to-cryptocurrency-web3-nfts-and-daos-1736d229cc7a
If you enjoyed this series, please like this post and click the button below to share it with your frens.
WAGMI
Check out the full guide about "How to mint NFTs on Ethereum/Polygon/Solana" click the link below
https://blog.frontier.xyz/how-to-mint-nfts-on-ethereum-polygon-solana/