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NFTs Explained: Here's how you can profit off of digital art

NFTs
Posted at 7:17 AM, Jan 27, 2022
and last updated 2022-01-27 07:34:54-05

(WXYZ) — As cryptocurrency becomes mainstream NFTs or non-fungible tokens are something anyone can buy even if you don't understand it.

Eminem, politicians, and the Detroit Pistons are all getting in on the NFT craze.

Some spend hundreds to even millions of dollars to own a piece of digital art even if it's just a jpeg image or an audio recording, but in order to do that, you need a community.

Adam Zientarski, the Chief Operating Officer of EOS Detroit, a software company based in metro Detroit that specializes in blockchain technology, says NFTs are here to stay.

"Right now, it seems a little silly because people are just trading pictures on the internet and like why would I do this, but really at the end of the day an NFT is essentially like a computer that you can trade back and forth," he said.

So, you're probably still thinking to yourself, what the heck is an NFT and how does it work?

Here is a simple answer. First, you need a crypto wallet to start because you buy NFTs with cryptocurrency.

NFTs, or Non-fungible tokens mean it's unique and can't be replaced by something else. Think of it as a one-of-a-kind trading card.

NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency like bitcoin. (Think of the blockchain as a digital ledger).

NFTs effectively are digital certificates of authenticity can be anything digital like music, digital trading cards, or art.

The difference between digital art and real-world art is that the artist can now get royalty fees every time the digital piece is sold or traded.

This is great for artists. Artists have always have had the situation where they actually create something and actually sell it once. Then they get paid once but don't get paid any other times someone else resells their artwork," Executive Director of Detroit Black Tech Mack Hendricks said.

Hendricks created an NFT ticket for an upcoming conference in February to teach people of color and others about NFTs.

Many NFTs also come with real-life perks and exclusive access to events.

"It's an opportunity for them to obviously change their life, make generational wealth, and make money for their families. This is an opportunity for them," Hendricks said.

So the big question is where is the digital world going?

"I would say in two to three years you're going to have these actual full-blown digital economies that are essentially powered by cryptocurrency and the NFTs," Zientarski said.