Non-Fungible Tokens (NFTs) have been surrounded by hype, various scandals, legal fights, and celebrities wanting to get in the space. With creators making millions off them, it’s understandable why people would like to try it out. In this article we will discuss how to make an NFT.
Step 1 – Understanding What an NFT Is
NFTs are increasing in popularity every day. Due to the nature of these exclusive collectables, individuals are trying to create and acquire them. In 2021, Beeple sold one NFT for a staggering $69 million. Other NFTs have also fetched multi-digit prices.
The potential for big money has led more people to create NFTs. This is why it is necessary to have NFTs explained. Non-fungible means that something is unique and can’t be replaced with another. For example, a Bitcoin is fungible. If you trade one bitcoin for another, both will be the same, while a one-of-a-kind trading card is non-fungible because it is unique.
NFTs are part of Ethereum’s blockchain, and they can use Ethereum’s decentralized blockchain to store their extra information. This makes them different from other cryptocurrencies. A file is often stored on the blockchain without its actual hardware supporting it. Instead, a token and a link to it are stored as ownership proof.
Also, two or more NFTs can exist for the same file. You can have NFTs with editions that are similar to trading cards. For example, an NFT can be rare if only ten copies of the same file exist. A file used for creating an NFT can also be used by someone else to make another NFT.
NFT stocks are becoming more popular among investors wanting to enter the non-fungible token space. There are several companies that provide services related to NFT. They include marketplaces, banks, and exchanges.
Step 2 – Identifying Your Items
You can create various digital assets such as a video game collectable, a custom painting, music, a picture, a meme, or even a tweet. With many options, it is up to you to determine which unique item or digital asset you want to use to make your first NFT. Being the sole owner, it is also good to ensure that the item is rare in order to give it value.
Also, make sure that the intellectual property rights of the digital asset you want to turn into an NFT are protected. An NFT created using assets you do not own can have severe legal implications.
Step 3 – Choosing Your Blockchain
Once a digital asset has been selected, it is necessary to determine the blockchain technology that will allow you to mint it into an NFT. Ethereum (ETH) is the most popular choice among NFT artists and creators. This means that NFTs made on the ETH blockchain are tied to cryptocurrency growth. Alternatives include Binance Smart Chain, Cosmos, Polkadot, and Tezos.
A large number of NFTs are also sold on the Ethereum blockchain, and each transaction on the network costs fees. These fees, popularly known as “gas fees“, are paid to miners and vary depending on the transaction. Everything was done on the blockchain, including minting, transference of ownership, and purchasing, which requires gas.
Although gas is very costly, it does not guarantee that your transfer will go through. It can be a bit risky, but a higher amount can be paid to increase the chances. Most transactions will eventually go through. However, you may not get the gas fees refunded if something goes wrong.
NFTs are also known for their environmental impact. The Prominent Ethereum blockchain uses energy-intensive systems. While it is debatable that selling NFTs impacts the overall energy consumption of the blockchain, it is worth mentioning that this system has a considerable carbon footprint.
Regardless, there are NFTs that use alternative blockchains that consume less energy. Ethereum is also planning on eventually moving to a more energy-efficient proof of stake system.
Step 4 – Digital Wallet & Marketplace
A wallet is the digital storage device you use to store cryptocurrencies and NFTs. There are various options when it comes to choosing a wallet, but the most important thing to remember is that it should be compatible with the blockchain that you’re using.
If you’re not yet a digital wallet owner, creating one is necessary. It will allow you to store and access your digital assets. Some of the top NFT wallets are: Coinbase, Trust Wallet Metamask, and AlphaWallet.
You’ll also need to purchase some cryptocurrency to start making NFTs. Most NFT platforms accept ETH and if you own cryptocurrency elsewhere, connect it to your digital wallet to get started creating and selling NFTs.
Once done with creating a digital wallet and acquiring cryptocurrency, it’s time to start trading NFTs. Some of the top NFT marketplaces are OpenSea, Larva Labs, SuperRare, Nifty Gateway, Foundation, and Mintable.
Many NFT platforms also allow you to sell NFTs across various blockchains. It is crucial to pick the right one for your project. If you’re not sure which platform would work for you, there are also options like AtomicHub or Solsea.
When a platform is selected, you’ll need to connect your NFT marketplace to your digital wallet to receive and hold your sales proceeds.
Step 5 – Sales Process
With all of this done, it is time to make money with NFTs. The NFT sale process is the last step in the process of minting and monetizing your NFT. There are various ways to monetize it. You can sell it at a fixed price, set a timed auction, or start an unlimited auction.
You’ll also need to determine the minimum price, how long to hold an auction, and how much money to keep from selling it. Ensure to remember the fees attached to NFT transactions and consider this when setting a price.
Unfortunately, there are many fees involved in selling an NFT. Some of these include a listing fee, a commission, and a transaction fee that can fluctuate depending on the platform and the amount of coins you’re willing to sell.
These fees can also fluctuate due to the volatility of the cryptocurrency market. It’s essential to carefully consider the costs involved in minting and selling your NFT to ensure they’re worth it. With all of this, you can go ahead with making your first unique NFT. Joining the community with the goal of making a profit or just simply sharing something you created.