Because we, Miletti Law®, are a firm of our word, here is part 2 the series on Non-Fungible Tokens (NFTs) and the passive income they could create. In this blog and the video accessible through the link provided below, we endeavor to continue sharing with you, our unusually motivated® readers, interesting, yet educative information on NFTs.

In Part 1 of this series, accessible through https://www.youtube.com/watch?v=6PYQSOXN2LY, we covered several aspects of NFT’s including what they are, where they come from, how they are valued, how they could stir copyright infringement issues, and what blockchain marketplaces are. We also used the meme of the Nyan Cat, an animated gif file of a cat with a Pop-Tart for a torso flying through space and leaving a rainbow trail behind it, as a perfect example of an NFT, which sold for more than $500,000.

In March this year, a piece of digital artwork titled “Everyday: The First 5,000 Days,” by Mike Winkelmann, popularly known as Beeple, sold as an NFT for a whopping $69,346,250 during an auction by Christie’s. Among other reasons, this is why NFTs and the passive income they could create has been a thrilling subject to us. Furthermore, we are, at the end of the day, businesspeople like most of you. That being said, our research has shown that NFTs are an interesting and potentially lucrative marketplace that we could all venture into.

For obvious reasons, royalties that could emerge from an NFT has been a favorite consideration. Apparently, it’s possible to license your logo or artwork, give it some value and register it as an NFT on the blockchain marketplace. Usually, while some marketplaces pay for NFTs upfront, some NFT trades involve buyer-seller situations.

In part 2 of the series, we are going to continue the discussion, but also explore other aspects of NFT’s.

To begin with, some common marketplaces for NFTs include OpenSea, Rarible, Digital Trading Cards, NBA Top Shot, Nifty Gateway, SuperRare, AtomicMarket, and Myth Market. In fact, the list is endless. We can all agree that while NFTs and the concept behind them are quite peculiar, the names of these marketplaces make it even weirder. For instance, it is quite hard to fathom why someone should name a NFT blockchain marketplace Myth Market. Probably, you might have decided to explore NFTs in depth after we posted part 1 of this series, and noted that this stuff is a bit complex than it looks from the outside. Well, you are not alone because it also took us time to research and understand the facts and fiction behind NFTs so that we could provide you with research-informed and trustworthy information. However, there is no harm to keep your mind open to weirder and peculiar stuff about NFTs.

As we mentioned in part 1, NFTs can be comprised of a myriad of things ranging from physical or digital items. Typical examples include digital collectibles, in-game items, a unique sneaker in a limited-run fashion line, or a unique digital artwork such as the Nyan Cat. However, as we mentioned in part 1, a token must have specific attributes that are typically codified by the NFT Marketplace, and which usually serve as the platform for transferring the NFT, in order to be accepted and stored on a blockchain.

Back to the question of money, how exactly could tokens create passive income? For starters, we talked about royalties on copyright in part 1. For instance, similar to the Nyan Cat example we used in part 1, someone might take the Miletti Law® logo (gladiator double bicep pose) and give it some value on the marketplace as a non-fungible token. However, since it is a copyrighted logo, the CEO decides to ask for 4% in loyalties annually for infringing on the firm’s copyrighted and trademarked intellectual property. It also turns out that you could also a passive stream of income as marketplaces charge transaction or set-up fees on these tokens.

In part 1, we also mentioned the minting process used to make NFTs. During the minting process, a given token is turned, as a public ledger, into a part of the blockchain. In layman terms, minting is the process through which NFTs are added to the blockchain. However, the process is a bit more complex than just simply adding an NFT to a blockchain. For starters, the unique identifier, metadata, and code attached to a token must strictly follow a particular NFT along the blockchain in order to preserve its value and integrity. Technical enough, while the minting process takes an NFT and places it on a blockchain, the energy behind it is gas. For instance, in some of the marketplaces mentioned earlier, users have to pay a transaction base fee (measured as gas) for their tokens to be minted. Thus, you can make extra passive income from the fees charged on such processes or during the transfer of your token on the blockchain.

At this point in time, it’s hard to pinpoint how NFTs are governed and regulated. Technically, the speed at which humans are advancing technologically does not much the rate at which rules and regulations to control technology are made. Due to this, agencies like the SEC, are still in their infancy as it concerns understanding cryptocurrency in general. It all makes sense because they have to understand how cryptocurrency works before they set rules and regulations to govern the NFTs and the associated technologies. It is best the SEC take their time because the last thing they would want is to detrimentally impact the millions of dollars in value created simply for the sake of preliminary regulation. However, as we mentioned in part 1, the marketplaces are very efficient. Furthermore, the minting process ensures that the digital art would be immune and tamper-proof to any modifications.

In a nutshell, it is clear that there are many ways of making a passive stream of income through NFTs. It’s not a must that you mint your own token. You could simply be the creator of a copyrighted digital art and then ask for a continuum of royalties from anyone who infringes on such an intellectual property.

We invite you to visit our YouTube Channel, watch the video through the link below, and arm yourself with knowledge about Non-Fungible Tokens and how they could be a source of passive income for you.

https://www.youtube.com/watch?v=b726hMxj2zc

Otherwise, stay tuned for more Videos, Counsel, and Guidance!! In the interim, if there are any questions or comments, please let us know at the Contact Us page!