How To Create, Buy and Sell Non-Fungible Tokens
Non-fungible tokens (NFTs) are unique collectible crypto assets that have been around as early as 2012 when the concept of Bitcoin first surfaced. These coins were simply satoshis — small fractions of a bitcoin with unique information that could link the coins to real-world assets. At that time, the colored coins were used to trade artwork on a trading platform on the Bitcoin blockchain.
What Are NFTs?
NFTs are digital assets that represent unique items in virtual worlds. They allow players to customize their avatars by adding hats, weapons, armor, pets, and other accessories. These items cannot be duplicated, so each player owns only one copy of an item.
A non-fungible token is a digital asset that represents something unique in a virtual world. It is not fungible, meaning it cannot be replaced with another identical object. This means that each token has its own value and cannot be traded for any other type of currency.
Why Do They Matter?
NFTs are used by developers to represent items such as collectibles, rare items, and even real estate. These assets are often represented using blockchain technology. Blockchain is an open ledger that records transactions between parties without the need for a central authority.
NFTs allow buyers to support artists, but it also gives buyers a couple of things in return. Buyers may not get to hang these digital pieces on their wall, but they might get bragging rights for purchasing a famous work like Nyan Cat or something from a popular artist like Grimes. NFTs are also a speculative asset, and many marketplaces have popped up that offer the ability to resell them — theoretically for a lot more, so long as the hype around NFTs continues.
The History of Digital Assets
The first use of blockchain was in Bitcoin, which was invented in 2008. It uses cryptography to secure transactions and verify ownership. Since then, other cryptocurrencies have been developed with different features. Ethereum, for instance, allows users to build decentralized applications (dApps) on top of its platform.
How to make an NFT
Today, making an NFT collection is relatively straightforward. You don’t need to have extensive knowledge of the crypto industry. In addition, artwork can be used to create collectibles like digital trading cards. Blockchains have their NFT token standard, which is designed to be compatible with wallets and the marketplace. Even though most blockchains are EVM compatible, NFTs made on them are still unique. For instance, if you mint an NFT on the BNB Chain, you can only sell it on platforms that support BNB Chain assets. However, there are some bridging solutions available today. These connect projects on different blockchains.
Most NFT projects today run on Ethereum as it is the largest NFT ecosystem. Here’s what you’ll need to make your own NFT artwork, music, or video on the Ethereum blockchain:
An Ethereum wallet that supports ERC-721 (the Ethereum-based NFT token standard), such as MetaMask, Trust Wallet, or Coinbase Wallet.
Enough ether (ETH) to pay for the gas fees. If you are using a Coinbase wallet, you can buy ether from the platform with U.S. dollars, British pound sterling, and other fiat currencies. Otherwise, you will need to purchase ether from a cryptocurrency exchange.
Once you have these, several NFT-centric platforms allow you to connect to your wallet and upload your chosen image or file that you want to turn into an NFT.
Grimes is the latest artist to get in on the NFT gold rush, selling around $6 million worth of digital artworks after putting them up for auction yesterday.
A series of 10 pieces — some one of a kind, others with thousands of copies — went up for sale on Nifty Gateway on February 28th. The highest-selling piece was a one-of-a-kind video called “Death of the Old” that involves flying cherubs, a cross, a sword, and glowing light that’s set to an original song by Grimes. The winning bidder took it for nearly $389,000.
The bulk of the sales came from two pieces with thousands of copies available that sold for $7,500 each. The works, titled “Earth” and “Mars,” are both short videos featuring their titular planet with a giant cherub over it holding a weapon, also set to original music. Nearly 700 copies were sold for a total of $5.18 million before sales closed.
Is Now the Right Time to Get Into NFT?
The interest in NFTs is still growing. Major organizations and celebrities have published or agreed to release their non-fungible assets, including the UFC and Shawn Mendez. Even Elon Musk’s girlfriend Grimes has jumped on the bandwagon, selling roughly $6 million in digital artwork in minutes.
In the first five days of 2022, NFT sales on OpenSea surpassed $700 million, owing to the popularity of the Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) collections. With more blockchains working to improve the NFT experience and a growing number of platforms to choose from, now is a great moment to get involved in the industry.
How much does it cost to make NFTs?
On OpenSea, you do not pay a charge to make NFTs. However, on many platforms, they must pay a listing fee. This fee is known as ‘gas.’ Gas is the amount of Ether required to perform a function or logic on the blockchain. The cost of gas varies depending on the network congestion. The higher the number of people transacting value over the network at a given time, the higher the price of gas fees and vice versa.
Ethereum gas fees are significantly cheaper on average during the weekend when fewer people are transacting value over the network. This can help keep costs down if you’re listing multiple NFTs for sale. Once you have these, several NFT-centric platforms allow you to connect to your wallet and upload your chosen image or file that you want to turn into an NFT.