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What is an NFT? Passive Income NFTs: The New Way to Retire

What is an NFT: Before Starting Imagine sitting on the beach somewhere being totally 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 GME Short selling issues

What is an NFT?

What is an NFT
What is an NFT

So nft stands for non-fungible token which is basically 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 the token id is paired with an image URL on a third-party website like open-sea where basically 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 like coinglid.eth is an NFT it’s a token that I hold that is unique so there’s no other token out there like it.

How NFTs can be used to Earn Passive Income

For example, Suppose I have a youtube channel for starters you should know that each video on a youtube channel is monetized and that means that youtube ads play before each video when they do advertisers pay google who then takes a cut and then gives us the rest. now let’s say I made an nft of each video on my channel they 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 20,000 views and it earned $100 then whoever held the nft would be given $20 worth of USDC Coin for that month and this would continue forever so if the video made $5000 in the course of a few years 20% of that would be paid out to the holder now in this example the 20% is arbitrary we could make it a 100% or 2% but the idea is the same.

This allows our audience to invest in our project and also be able to earn a reward if our videos do well basically allowing you to have skin in the game for our success not only that 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 but we won’t be doing that anytime there are many problems which we’ll talk about later in this article.

Nevertheless, this is the core idea of a passive income in ft that it is a digital representation of a physical asset that actually adds value and earns in some way.

Personally, I remember youtube creators like graham Steffen Alex harmonise Andrew Kirby and practical psychology were once in their growing stages and I was thinking man if they were a stalk I’d definitely invest in them 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 them 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 ownership 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 the perspective of how much the artist made there are currently 257 items on open-sea which is an nft marketplace and the floor price which means the lowest possible trading price is to ethereum 257 items times 2 ethereum times an average price of $4000 per ETH equals over $2 Million 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 for example Blau could add a 5% trading fee so that if a $100,000 of his nfts got traded this month $5000 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 personally think this technology will revolutionize the way artists are created and promoted.

Real estate as NFTs

Real estate is another great example what if an entire apartment 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 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 own 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 actually already being done but that’s more about how DAOs work than passive income NFTs.

Problems related to NFTs as Earn Passive Income

This one of the main problems of 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 it 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.

In fact, 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 actually see who owned every single share issued where they were how often they were moving and who really 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 in fact I even had an article idea that I might call the nft bubble where I explain a few other misconceptions and issues around NFTs

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