What the article consists of
1.What is NFT.
1.1 History.
1.2 Concept of NFT
1.3 Prospects.
2. Problems of NFT tokens.
2.1 Garbage tokens.
2.2 Money Laundering.
2.3 counterfeit tokens.
2.4. Have no legal effect.
2.5 The high cost of creating your own NF token.
3.How to create your own NFT token.
3.1.Creating an ETH wallet (MetaMask).
3.2. Replenishment of the wallet to pay the commission (gas) for the creation of a token.
3.3 Linking the wallet to the exchange.
3.4 Creation of a token on the NFT exchange.
3.5 Sale.
4.How to make money on NFT.
4.1.Farming tokens.
4.2 Resale of tokens.
4.3 Create your own NF tokens.
4.4 Fraudulent NFTs.
4.5 Theft of NF tokens.
4.6. Development of own projects.1. What is NFT
1.1. History .
Experiments with NFT began back in 2013-2014 in the script language of the Bitcoin blockchain by the Colored Coins and Counterparty projects, and already in 2017 it was first tested on the ETH blockchain.
1.2. NFT concept .
To understand what an NF token is, you first need to understand what an ordinary token is:
A fungible token is any object that we can replace with another object, for example fiat money: We can replace a joke bank ticket with a denomination of 5 thousand rubles for another Joke bank ticket with a 5 thousandth bill, but with a different serial number.
Non-fungible tokens (NFT - No-fungible token) are tokens that are based on the ERC-721 or ERC-1155 standards (is an improved version), and also have uniqueness - this means that one token cannot be replaced by another, they are unique get a simple equation: Smart contract table entry + metadata + media = NFT
But how do you store so many media files, you ask?
In fact, the media files themselves are not stored in the table; instead, a link to the file is stored there. Because of this, the token and the object that is laid as the semantic load of the token are not related to each other.
1.3. Perspectives .
Tokenization (digitalization) is a steady vector along which our world is moving. Digital money that does not know what inflation is, decentralized databases, and now the digitization of property rights. Every year blockchain and smart contract technology develops and brings more and more promising ideas for DeFi projects.
At the moment, development in the direction of non-fungible tokens is just beginning, so there are not so many new unique projects where you can use NFT, but every month this direction will only gain and gain momentum in various areas, be it media business, digital art, or gaming. assets.
2. Problems of NFT tokens
2.1. Garbage tokens.
The popularization of NFT tokens has led to the oversaturation of the market with garbage tokens, people who know about NFT with burning eyes and in the hope of making millions of dollars create their own tokens that do not carry any semantic load, as a result, it is not so easy to find something really valuable among this mountain of garbage ... Therefore, I see 2 outcomes:
a ) Market self-regulation, all garbage will gradually disappear as no one buys it, and the replenishment of marketplaces with new garbage will be very slow.
b ) Tokens placed on auctions will start checking marketplaces, it can be manual checks or account verification and making some deposits.
2.2. Money laundering .
Everyone has probably already heard about the sold 10-second GIF-file of Mike Winkelmann, called “Everydays: The first 5000 days”, which is a collage of 5 thousand paintings by the author, in the form of an NF-token for $ 69 million. And the token itself was bought by Winkelmann's business partner)
2.3. Fake tokens .
As I wrote above: due to the fact that the token has no real connection with the object, we can fake it by creating an NFT on another marketplace, or blockchain. And in order to verify a token for authenticity, we need to know the history of its creation and on which marketplace it was placed. You can also check the token on the website https://checkmynft.com but it does not give 100% accuracy.
Is there really no way to fix this situation?
It is possible to fix the problem of fake tokens, but all marketplaces need to start storing files on the same blockchain. There are two options for storing media files:
a ) Off-blockchain on decentralized servers.
b ) On blockchain - One-chain solution, or IPFS.
One-chain is a blockchain network that allows you to store files on the blockchain, in such a bundle we can actually link a digital product to an NF token.
IPFS (pinata) - InterPlanetary File System - blockchain solutions for storing files, access is carried out by the hash of the file.
Now a small list of marketplaces and their metadata + media storage locations:
Artblocks - Metadata and Media on the Blockchain.
AsyncArt - Metadata and Media Hash - IPFS.
infiNFT - Blockchain metadata, media hash in IPFS + Arweave.
KnowOrigin - Metadata and Media Hash - IPFS.
MakersPlace - Metadata and Media Hash - IPFS.
Mintbase - Metadata and Media Hash - IPFS + Arweave (https://www.arweave.org/).
NiftyGateway - Metadata - differently, media hash - IPFS.
OpenSea - Metadata and media in its own repository.
Rarible - Metadata and Media Hash - IPFS.
SuperRare - Metadata and Media Hash - IPFS.
2.4. Not legally binding .
NFTs are great for selling digital goods, but at the moment they have no legal force and with such an operation we cannot buy a car, or an apartment. More precisely, we can, but no one can guarantee us that after the purchase, the seller will fulfill the terms of the transaction, and will not fly away to rest in the Maldives.
2.5. The high cost of creating your own NF token .
Each new entry in a smart contract is a commission to the blockchain, and given the current gas price, ETH is not a cheap toy (by the standards of an average CIS citizen), one such NF token will have to drop from $ 50.
3. How to create your own NFT token .
3.1. Creation of an ETH wallet (MetaMask) .
Go to the website https://metamask.io and download the browser extension or the phone version, then generate the wallet and save the seed phrase in a safe place
3.2. Replenishment of the wallet to pay commission (gas) for the creation of a token .
I think there is no need to explain)
3.3. Linking the wallet to the exchange .
We go to any of the exchanges (list above), register and link the wallet.
3.4. Creation of a token on the NFT exchange .
The process of creating a token is the same everywhere, we create a collection, upload media files (formats - JPG, PNG, GIF, SVG, MP4, WEBM, MP3, WAV, OGG, GLB, GLTF), add a name and description to them, each file is a new one unique token. On the OpenSea exchange, it is possible to add various characteristics to the token, including blocked content that only the buyer will see. After that, click “Create” and wait for the authentication (to be honest, I don’t know what the point is, because you can download any garbage for sale).
3.5. Sale .
Among the sale options are :
a ) Auctions
b ) Fixed price
To place the token itself for sale, you need to pay for gas (blockchain commission). Then we are waiting for our long-awaited buyer. About what products to sell as NFT further in the article.
4. How to make money on NFT .
4.1. Pharming of tokens .
Zero entry threshold, to work you need to be able to use the Internet and a lot of free time. The bottom line is NFT farming on various projects (mainly games) and further resale, you can also get tokens from distributions. To find such games and giveaways, you need to monitor social networks Facebook / Twitter by tags, for example #NFT #NFTgames and others.
4.2. Resale of tokens .
The scheme is maddeningly simple, but some investment is needed. We buy a token and resell it at a higher price. But there is a sooooo big BUT! At the moment, there is a large number of junk tokens on the market, so in order not to fall for this kind of scam, you first need to check seven times and buy one. This kind of speculation can be attributed to bubble games in the style of "Hot Potato" where each next buyer pays more than the previous one, and the control of this process is carried out by all the same smart contracts.
4.3. Creation of your own NF tokens .
I talked about how to create your own non-fungible token above, now let's talk about how you can make money on it.
If you are a creative person: you know how to write pictures, sing songs, or shoot short videos (yes, at least the ones you just thought of) - the sale of NFT is just right for you, firstly it can be like the sale of a physical product (by agreement between the client and the buyer) and the sale of copyrights in digital form, although at the moment NF-tokens are not legally binding.
4.4. Fake NFT scam .
Perhaps one of the most interesting schemes. As we learned earlier, NFT is just a record in the blockchain using a smart contract, each marketplace stores media and metadata differently, and thus we can forge an NF token from one marketplace to another, using the popularity of a particular token and the ignorance of the buyer.
4.5. Theft of NF tokens .
Theft of NFT is carried out like theft of cryptocurrencies: by gaining access to the wallet, through a private key, or a seed phrase (the methods of theft can be very diverse), with the further withdrawal of the token to a wallet controlled by the attacker. Subsequently, they ask for a ransom for the token from the previous owner, or sell it on the marketplace.
4.6. Money laundering .
The scheme is not yet suitable for black cash in the CIS, but it will not be superfluous to talk about it.
A cash-out partner creates any garbage token, after which a company that wants to avoid taxes - buys this same shit-token in cryptocurrency, then mixing, dancing with tambourines and transferring cryptocurrency through an exchanger to fiat, with a competent approach from both legal and technical you can achieve a low percentage of loss of funds and the absence of claims from the tax service.
4.7. Development of own projects based on NFT .
To develop your own projects, you need to have a team of developers, PR managers and a thick wallet with money, be able to analyze competitors, or create new products.
Project options :
1 . Game creation.
List of projects to think about :
https://www.cryptokitties.co/ - a game with the creation of unique cats.
https://avastars.io/ - creating avatars.
https://deekhash.xyz/ - from string to member))
https://pixelchain.art/ - pixel art.
https://artblocks.io/ - vector image generation.2 . Marketplaces (list above, in clause 2.3).
3 . Any other projects (that at least marry people online where NFT is a hash of their joint data) that you can come up with in addition to the existing ones.
5. Conclusions :
In this article, I tried to cover the topic of the next NFT pyramid as extensively as possible, describe the technology in simple words, show both its pros and cons, the process of creating your own NFT token on the exchange, as well as all possible methods of making money on this technology.
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