NFT - Everything You Need To Know About Passive Income From NFT

NFT Passive Income

Crypto Rishi

2 months ago|6 min read

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Imagine sitting on the beach somewhere being blissful with a fresh ocean breeze across your face and the feeling of sand between your toes. It's been a while since I’ve been to the beach, but the last time I visited, I did not want to leave. Maybe you’re sitting in one of those stretched-out chairs with a huge umbrella over you, while you scroll through the cyberpunk NFTs that you bought a few days ago.

You know those pixelated jpegs have humans, with very slight cosmetic alterations and you’re Just checking in to see the passive income that they’re earning, in fact, maybe they’re the reason you’re at the beach in the first place. In this article, we are going to explain how you can make long-term passive income by simply owning NFTs in the future, also how blockchains could completely prevent the GameStop short-selling issues and why you should read other articles on this channel.

1.  NFT

Let’s dig in first of all what is an NFT now we actually have an entire NFT article that breaks down what they are and how they will eventually replace card titles and house deeds on the blockchain one day but we’ll give you a quick summary here, so NFT stands for a non-fungible token, which is a fancy way of saying that it’s a unique token that cannot be duplicated and is special in some way. Most of the NFTs you probably know about are simply digital art NFTs, where you think that the token is a piece of art.

It's not that the token id is paired with an image URL on a third-party website like openc, where they say that the token represents the image, although there are truly technically no image data on the actual blockchain, the token id is simply a pointer saying I represent that Image over there and then the actual image file is uploaded to a server that could easily change the image. If they wanted to the thing is, NFTs can be so much more than just art, though, for example, I said it could be house deeds or car titles, and even domain names.

2.   Example

We love using examples and, in this example, we’re going to be using our YouTube channel. Let’s say I made an NFT of each article on this channel. I could sell them individually and then I could also promise that whoever owned them would get 20 of the revenue. From that specific video’s ad income during the past month, for example, if the video got around twenty thousand views and it earned one hundred dollars, then whoever held the NFT would be given twenty dollars’ worth of USDC coin for that month, and this would continue forever. So, if the video made five thousand dollars in the course of a few years, twenty percent of that would be paid out to the holder. Now, in this example, the twenty percent is arbitrary. We could make it a hundred percent or two percent, but the idea is the same.

This allows our audience to invest in our project but these NFTs could quickly become somewhat of a gamble where users could pay more and more for each NFT. Expecting a certain video to pop off one day. Due to the algorithm, now, I’m sorry to say, we won’t be doing that anytime soon. Nevertheless, this is the core idea of a passive income in NFT that it is a digital representation of a physical asset that adds value and earns in some way.

3.  Passive Income Example

They just need a little support and I know they’ll be big one day. Needless to say, they got big anyways, but NFTs like this would allow them to benefit in the short term and investors like me to benefit in the long term. Speaking of that model, this is exactly what music artists will soon be using for the next example of a passive income, NFT is real and it will be music artists.

I recently heard of this artist Blau, who set up an NFT drop of 333 total tokens. All of these tokens combined represent 50 ownerships in the streaming royalty rights of a song called worst case. What this means for you is that 50 of all the money he earns from Spotify by playing that song he’s giving to the NFT holders, also each token had unique artwork tied to it. So, they are all different to put this into perspective, of how much the artist made. There are currently 257 items on openc, which is an NFT marketplace, and the floor price, which means the lowest possible trading price, is to Ethereum 257 items times two Ethereum times an average price of four thousand dollars per each equals over two million dollars for half of His streaming royalties now I will say this doesn’t mean he earned all of that, though he only got the proceeds from initially selling them. One trick that these artists can implement is to add a transaction fee to each NFT that gets rerouted back to the artist’s wallet.

4.  Win-Win

For example, Blau could add a five percent trading fee so that if a hundred thousand dollars of his NFTs got traded this month, five thousand dollars of it would be deposited straight into his wallet, simply for the NFT being traded. So, to summarize, the NFT holders will be earning passive income, but the artist will also earn passive income for their works, and don’t forget about the other 50 of the royalties that Blau gets to keep for himself. I think this technology will revolutionize the way.

5.  Real Estate Example

Real Estate is another great example. What, if an entire apartment, in the complex, was turned into 100,000 NFTs, where each NFT holder earned a percentage of the complex’s profits? This way, you wouldn’t need to have 100 million dollars to invest in these high return buildings but could join for fractions of that now I don’t know if this will ever happen, but it is fun to think about the endless possibilities of NFT technology, even more so. What if the apartment complex started its dao, where NFT holders could vote on changes like whether to allow smoking or not or who to accept to rent, to or even which janitor to hire stuff like this is already being done. But that’s more about how daos work than passive income NFTs moving on. Let’s talk about the problems of this.

6.  Issues with Real Estate NFTs

One of the main problems with this idea is who’s going to make the payment because it certainly won’t be the blockchain making the payment. Someone has to physically take all of that earned money deposit it onto the blockchain and then send it to a bunch of different wallet addresses which, if you know anything about the Ethereum network right now, could quickly eat up fees. If they’re not careful, it seems that this is the biggest problem, stopping passive income NFTs from becoming the next big financial opportunity, and I don’t see why companies in the future or even daos wouldn’t sell shares of their company as an NFT one day.

7.  NFT on Blockchain

While I'm on this topic, this would solve a big problem around the Gamestop naked short selling issues. If the NFTs were on the blockchain, we could see who owned every single share issued where they were, how often they were moving, and who does have diamond hands. I've been doing a lot of thinking about this topic and have recently learned a ton that I want to share with you.

I even had an article idea that I might call the NFT bubble, where I explain a few other misconceptions and issues around NFTs.

As I end this article, I want to thank you for reading. I hope you enjoyed it.

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Crypto Rishi

Hi, I am an anonymous crypto guy. I am trying to exchange knowledge and build a community around crypto and blockchain. Find all the informational content about crypto and blockchain on my Feeding Trends blog here. If you like the content follow me to get a regular updates.

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