Non-fungible tokens – NFTs – are becoming ubiquitous even as many people may still not understand what they are and how they work. Yet, there is money to be made in trading these digital tokens that represent real-world items like artwork and music. NFTs provide indomitable proof of ownership, exclusive rights, and a fool proof licensing mechanism. This democratisation of the virtual world, where content creators can market their NFTs and trade them freely, is fuelling the rapid rise of NFTs as valuables today.
For entrepreneurs and artists alike, learning how to mint NFTs can be the gateway to monetising their digital content at market-beating prices.
One such entrepreneur is Tanay Mehra who has a textiles business in Jalandhar and is an exporter of textiles and spices. He now also trades in NFTs for a living, dealing in digital art, cricket memorabilia and coin collections, apart from investing in property. Mehra makes 4-5 trades a month and his average return on investment is 70-80 percent.
In an interview with Moneycontrol, Mehra offers some tips for newcomers to the world of NFTs.
What got you interested in NFTs?
A friend of mine is deeply entrenched in the NFTs space. He kept on telling me to try selling a digital art piece once and how, if done correctly, one can reap rich returns. Listening to him for months, I thought of giving it a try. I bought a couple of collectibles and even managed to sell them and earn good returns. This got me addicted and I am now dealing with NFTs full time. A few friends also joined me and we now research and invest in NFTs. A couple of friends have also left their fulltime jobs and have started this business.
Leaving a full-fledged job is risky, especially in the midst of a pandemic. Is the NFTs business sustainable enough for one to leave a fulltime job?
If you get the right advice, it is all good. I was fortunate enough to have the right people in my life at the right time. Apart from taking advice, I made sure I did my research thoroughly before staking my money. One of my friends was in JP Morgan and the other worked in an insurance company. Both of them are now earning much more than what they used to earn in their fulltime jobs while at the same time having a lot of free time for family and friends.
How do you see this space evolving over the next two decades? Would it be worth taking the risk of diving into NFTs full-time?
I think it is worth it – I can say this after earning very well myself. Going forward too, I see tremendous scope for the development of the space because we are in the nascent space. For now, we just have digital art. Soon we will have music, television and movies sold as NFTs. Several uses of NFTs are yet to be developed and this makes the space a go-to option over the next decade or two.
What would your advice be to youngsters and those keen on making a mark in NFTs?
Do your research thoroughly. Never invest money in NFTs on the recommendation of any random person, without doing your research. Education and information are critical, especially at the beginning because there are a large number of people sitting out there to dupe gullible investors and new scams come up every day. The only way to save yourself is to be aware, which will also prevent scammers from taking you as an easy target. Ten years ago, did we imagine that transactions could take place digitally? Today, almost everyone – right from a grocery shop owner to a vegetable vendor – accepts digital payments.
Since you give so much importance to education, could you share with us what mediums can be used to gather genuine information?
I started with a two-day session from a friend who is a blockchain expert and holds advisory positions in dozens of blockchain and crypto companies. Fortunately for me, since the basic concepts in the session I attended were explained in easy terms, it got me instantly hooked. While there are not many classes available, I do not recommend any online courses because courses are usually not updated. Information should be sought by someone in person after doing at least basic research on them.
Would you like to share your strategy that newcomers can emulate and give us some tips to make selling of NFTs easier?
The first thing one should remember is that the focus should be on aspects that are of most interest to the target population. For instance, a very expensive art piece will have a niche audience. Unless we know of people who’d want to buy such exquisite NFTs, there is no point in investing in them. However, items that are in a mid-price range are easy to sell. But again, investing in collectibles that are too cheap is not recommended because it will not have resale value. A balance should therefore be maintained to ensure there are no losses. Apart from this, I believe music has tremendous scope going ahead and therefore should be invested in. Every person cannot buy an iPhone but can certainly buy a Samsung. Similarly, one’s focus should be on collectibles that have mass interest in them. Also, one should be aware of fake platforms that siphon off funds and then disappear and this awareness will not come unless one studies the subject thoroughly.
After acquiring information to start minting or buying NFTs, can a newcomer sell them without being part of the right communities?
Some services have come up that help you increase your community, meet with influencers with the right content. Where to find the correct services, how to approach them is a scientific process and after getting in contact with the right people, they can advise on the correct steps. Without the correct guide, nothing much can be sought.
How do you expect the Indian NFT market to grow vis-à-vis the US market in the coming decade?
In the next two years, Indians will realise what is most favourable for the US and European markets and such collectibles will be minted and bought at dirt cheap rates locally and sold in the western markets for triple the price. Money cannot be made unless foreign markets are tapped to sell high-quality and rare NFTs, especially to those who have the money but may not have deep knowledge. India will become the biggest NFT market in terms of volumes sold in the next five years. India is only taking baby steps now, giant strides are yet to come.
With the Union Budget approaching, what taxes would you expect the government to levy for crypto and NFT traders and investors?NFTs are an asset and an investment that needs to be regulated, failing which there are high chances of money being laundered. The government should consider having the same tax bracket as is prevalent currently in the stock markets.