Lately, the crypto community has been buzzing with the acronym, NFT. There’s been crazy cash flow related to NFTs. Imagine selling a piece of art for $69.6 million. I know it’s not as expensive as the Mundi painting sold at a whopping $450 million. However, no one saw it coming. No one in the last three weeks could believe digital art could be sold for $69.6 million. I’m sorry I had to say that figure again. I get goosebumps when I see this.
NFTs have become a rage that many powerhouses are now investing in them. Recently, DC Comics ( the best comic franchise) launched a Batman NFT Collectible with each going for at least $89.99.
You may be new to blockchain and crypto or may even be interested in this sector for years. In both cases, you probably may just be learning about NFTs. The NFT rage these days will leave you wondering why you’re not a digital artist.
This article will introduce NFTs to you, let you know what gives them value and how you can get started in the NFT space.
What are NFTs?
Non-Fungible Token (NFT) are digital assets that represent a range of tangible and intangible objects. It is the blockchain-based tokenization of artworks or collectibles.
What is the difference between NFT and the good old collectibles we are proud of? There is one significant difference. NFT has distinctive information that makes it different from all other NFT and can be easily verifiable. Let me break it down.
Imagine NFT as tickets for NBA games. Each ticket contains specific information such as the buyer’s name, the event date, and even the serial number. There can not be two tickets with the same buyer name and the same serial number. Therefore, it does not make sense to create counterfeit tickets. NFT proves digital ownership and authenticity and is publicly stored in the blockchain for quick verification.
That’s not all. There are other features that make NFTs desirable. Let me list them for you.
Indivisible: NFT can not be divided into smaller pieces such as Bitcoin Satoshis. They only exist as a whole.
Indestructible: Since NFTs are stored using smart contracts in the blockchain, they can not be destroyed or deleted. The ownership of the NFT remains unchanged. What does that mean? Unlike the songs you buy from the iTunes store where you don’t actually own what you buy, with NFTs, you actually possess it, not the companies that create them.
What’s the Reason Behind The NFT Craze?
Owning rare items has always been the desire of some people. It’s the one reason you see crazy bids on a vintage artifact. I mean, who pays $450.3 million for a painting? Not me for sure. However, in the past, some people have the desire to collect rare items.
The difference with NFTs is that people buy these pieces of art not to store them, but because they believe they can sell them off at a higher price as the NFT frenzy continues.
Do you want an example? Take a look at the bids that were placed for the very first tweet on Twitter by Jack. That’s a lot of cash for a single tweet.
You might be wondering how NFTs have so much value. Just like any other valuable thing in the works, value is not attached to the object itself but to people who deem that particular object valuable. Let’s go back to Jack’s tweet. It has no value. Literally. But few people in the crypto community deemed it valuable to the tune of $2.5 million. Value is a shared belief. Objects including digital paintings become valuable because people believe they do.
Enough talk about NFTs and the craze around it. Let’s get down to business. How can you create your own NFT and earn from it?
How You Can Create Your Own NFT
Creating an NFT is quite easy. Some platforms can simplify the creation of NFTs. Such platforms are OpenSea and Rarible. Both platforms allow you to upload your arr and create collectibles. You may be wondering if you need technical knowledge of blockchain to do this? You do not need this to create your NFT on these platforms.
At Rarible, artists have to mint their NFT on the blockchain (on-chain) during the creative process. This means repeated smaller costs. If you are looking to sell multiple NFTs at high prices, Rarible might be your best bet. However, if you want to create a large number of cheaper NFTs, you will need to use OpenSea’s Collection Manager.
With the OpenSea Collection Manager, users can pay a one-time fee to create a new collection. From this collection, the OpenSea centralized team can create and store an unlimited number of off-chain NFTs until they are sold. At that point, the buyer pays the gas fee associated with the transaction, and your NFT is added to the chain and transferred.
This tutorial will walk you through all of the steps required to create your NFT in the OpenSea collection.
Step 1: Set up MetaMask
The first thing you need to do to create your own NFT is to set up a software wallet. This wallet can hold your NFT and you will need to use it to pay future blockchain gas fees.
Go to metamask.io, where you can download the app or add the Chrome extensions. Creating a MetaMask wallet is easy and free. Make sure to remember your seed phrase in case you need to access your wallet.
Remember that the wallet does not hold cryptocurrency or NFT, but instead stores the private key that is used to authorize transactions.
Step 2: Tokenize Your Art
After creating the MetaMask wallet, you can create your own NFT.
Navigate to opensea.io and click the “Create” button on the menu bar. Now you can connect the MetaMask wallet to OpenSea and start working.
Create a name for your NFT collection and click the “Add New Item” button. Now you can upload the file that you want to tokenize and give it certain attributes and statistics to distinguish it from other collections.
Determine how many copies of each item to make, then set the selling price.
Step 3: List On the Marketplace
To sell your first NFT, you will need to activate OpenSea to sell the goods on your account. This requires blockchain transactions so you have to pay gas fees. Send some ether to your MetaMask and that’s it. You only need to pay this fee the first time you create an NFT collection.
If you don’t have Ethereum, you can use Coinbase or Binance to buy something and send it to your MetaMask wallet. After you’ve given OpenSea the right to sell NFTs, anyone can find and buy them on the OpenSea market.
How to Sell NFTs
Selling your NFTs is as easy as creating one. Platforms like OpenSea and Rarible make it easy for you to sell your NFTs.
To sell an NFT, you’ll connect your Ethereum wallet to your platform of choice. If you’ve already created the NFT, you should be able to click on it and see a “Sell” prompt, which you can click and sign a transaction to complete.
The Dark Side of NFTs
Inasmuch as NFT is a good development for digital artists, there is also a dark side to NFTs. There can be only one unique artwork or NFT. But that doesn’t mean an NFT cannot be duplicated.
There is also the possibility the real owner of an artwork does not get paid. You might be wondering how? Currently, there is nothing that stops a random person from tokenizing other people’s work, claiming ownership, and making money off it. There’s even a Twitter account that will tokenize any tweet. It doesn’t matter if you own the tweet or not.
If you’re a struggling artist, this could be a slippery slope as there is no guarantee your artwork is secure. Especially if you love to showcase your work on Twitter. I can easily get to your Twitter page, take off some images and tokenize it. By the time you realize your work is stolen and used as an NFT, I’ll probably be trading with some ETH gotten from your work.
What’s my opinion on this? If you want a unique artwork, commission the artist.
Case For Money Laundering?
Another issue is the thought that NFTs could be an avenue for money laundering. I know what you’re thinking? Pscch, another conspiracy theorist. But let’s think about it for a second?
This issue came up in a WhatsApp crypto community I belong to. Is there not a possibility that people could launder money through NFTs? I mean all I need to do is mint an image of me and I can be paid in millions for another illegal deal, right? Terrorists could move money around the world selling a piece of crap as NFTs. Will there be an investigation? No. Why? Because everyone thinks it’s just the NFT craze.
High Gas Fees
Finally, NFTs are powered mostly on the Ethereum blockchain. Right now, the crypto community is finding it hard to transact on the Ethereum blockchain because of its high gas fees.
Before you get started, know there will be some upfront costs. NFTs are powered by a blockchain – typically Ethereum’s blockchain. Using a blockchain comes at a cost, a network fee called gas, that you’ll need to pay to tokenize your art.
These are interesting times in the crypto community. There is an increasing amount of interest in the NFT economy as more opportunities open up.
Although there are concerning issues surrounding NFTs, with strict regulation, I see a space that rewards artists for their creativity. Over time, more and more artists will make more use of NFTs. Moreover, platforms beyond Ethereum will also turn further focus to NFTs as they grow in popularity. It’s already happening today!