Posted on June 24th, 2022
Many people today are tossing around some terms we may or may not be familiar with. NFTs are definitely part of that category.
For those that are trying to grasp the concept of an NFT and why it's grouped with art maybe we can start by breaking this down into smaller bites.
First of all, we need to understand what NFT stands for. NFT is an acronym for Non-Fungible Tokens. You may be wondering now what Fungible means. Fungible is something that can be exchanged for something else of equal value.
For instance, if you have a $5 bill and someone else has a $5 bill and you trade, both people still have $5. Those 2 pieces of currency equal the same amount.
It also helps to look at other words that mean fungible. The words exchangeable, switchable and transferable all have the same meaning. Basically trading one thing for another of equal value.
So adding the word Non in front must mean it does not have the same value. Non Fungible means there is nothing in existence that is equal to an item.
In the case of art, if you have an original creation, there is no other one in existence that can be traded for it. This means you have a one-of-a-kind item that is unique.
Now let's add the word token. This is a digital file. It assigns ownership to an item. It's basically like a digital certificate of authenticity. Saying this is the original. Here is the digital serial number so to speak. Having the token means you own that item. You are holding the title.
Now that's add in a twist by looking at what an NFT looks like where art is concerned
Most artists create items that are unique. They have a certain style and many people follow that style and collect their art.
NFT's put a whole new twist on collecting art. If an artist creates NFTs they can also produce a token that can be sold either with the art or separately.
Actually, there are quite a few different ways an artist can generate income with NFT creation
You can sell your NFTs. This will generate income when someone purchases an NFT from you. They are basically purchasing the original and want to be the new owner of that item.
Next, you can also earn royalties as a creator. If you are the creator of an NFT and it sells you earn a royalty. The next time it sells you can earn that royalty again. The more times it's traded the more royalties you make depending on the percentage you attach to the item.
You can also invest and trade your NFTs. This is similar to trading stocks only way more fun. You may want to start your own collection. Hold on to your token collection until the market changes. Then you can trade just one or the entire collection and make money on the trade. You can invest short-term or long-term.
The most important rule of thumb to remember when investing is never to invest any more money than you can afford to lose. Any type of investing comes with risk. So do research so you can make decisions that are best for you.
The last way is to find or create a job in the NFT space. With this new technology, there will be plenty of opportunities for developers, marketers, and influencers. Since this is also a new income space there are going to be new positions created every day as needs arise.
It's super exciting to be on the cutting edge of technology. I am so happy to be able to take my art into a totally new space.
The original version of my art is still there and is what I love doing. I am adding value to my art now by offering my clients the ability to own a Rick Cheadle Original. Anyone can now own one of my custom art pieces in the form of a Non-Fungible Token.
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