What is an NFT in Simple Terms
An NFT (non-fungible token) is a digital certificate of ownership for a unique item: an image, video, music track, or in-game asset, stored on the blockchain.
If you create a digital artwork or buy one, an NFT is the document that proves you own the original. It can be bought and sold. Each NFT is one-of-a-kind, cannot be divided into parts, and exists as a single, unique item.
How to Create an NFT from a File
There are many platforms (marketplaces) where you can list NFTs. Some specialize in specific categories — only gaming items or only art.
Popular platforms:
- OpenSea
- SuperRare
- Foundation
- Rarible
Most platforms charge a fee in Ethereum (ETH) for recording the new token on the blockchain. Fees vary but usually amount to a few dozen dollars. The timing of the fee depends on the platform: it may be charged immediately after uploading the file or after the first sale.
- Choose an Ethereum wallet: MetaMask, Coinbase Wallet, Trust Wallet, or another. Deposit enough ETH to cover creation and transfer fees. Typically, $50–100 is enough for creation fees and a few transactions.
- Create your artwork in graphic editors (Photoshop, Illustrator, Procreate) or use an existing file. Save it in a supported format: PNG, JPEG, or GIF.
- Upload your NFT to a platform: connect your crypto wallet, pay the token creation fee, and list the NFT for sale.
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How to Make Money with NFTs
NFTs open up earning opportunities. Creators sell their digital works to buyers: collectors, gamers, athletes, celebrities, politicians, and other wealthy individuals.
The idea is to turn the popularity of your unique creations into income through NFTs. The more popular the creator or the more unique the work, the higher the NFT’s price. Some tokens sell for millions of dollars. Additionally, creators can earn a percentage (royalties) from every resale of their NFT.
Risks and Pitfalls of NFTs
Investing in NFTs is as risky as putting money into high-risk assets. NFT prices fluctuate sharply — they can skyrocket or plummet. A token worth $10,000 yesterday might drop to $500 today or shoot up to $50,000. Thoughtless investments are more likely to lead to losses than profits. If you buy an NFT at the height of hype, there’s a high risk you’ll never get your money back. Emotional purchases without analysis usually result in losses.
It’s difficult to determine an NFT’s real value. Prices depend on many factors. Choosing the right NFT is harder than picking stocks.
High NFT prices also attract scammers and hackers: phishing fake websites, wallet hacks, counterfeit collections, and rug pulls (when creators disappear with the money).
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