I just created my first NFT. Here’s how I did it.
Daniel Farber Huang
January 23, 2022
I made a resolution last year that I want to become more of an early adopter of technology. As a cybersecurity author, father with Gen Z children, and general gear enthusiast, it feels like the tech world is moving faster than before and I don’t want to wake up someday and discover I am a dinosaur.
I’m also a documentary photographer and generally creative person, and was curious about all the headlines I’ve been seeing about non-fungible tokens, or NFTs, being sold for thousands or millions of dollars, and how it’s become a “thing.” The more I explored, the more it became interesting to me.
I just created my first NFT. Here’s how I did it.
What is fungible versus non-fungible? Dollar bills, sandwiches, lawn mowers, and common stock are examples of goods that can be exchanged. You can use dollars to buy those other items, and conceivably you could trade a lot of sandwiches for a lawn mower. These are considered “fungible”, because they somehow are interchangeable (and thus identical) for practical purposes. There are lots of identical ones of each that are all worth the same value. For example, on Lowes.com, the Craftsman M70 gas lawn mower sells for $259, regardless of how many you purchase.
An original Pablo Picasso painting or a first printing of Jane Austen’s Pride and Prejudice (even though multiple copies may exist), and even diamonds are unique and “non-fungible” since each unit has individual qualities that may increase or decrease the item’s value. For example, in 2018 Steve Wynn, the casino billionaire, was scheduled to sell Picasso’s Le Marin painting at Christie’s New York auction house with an estimated sale price of $100 million. When Christie’s was preparing their gallery for the upcoming auction, however, a painting contractor accidentally tore a four-and-a-half inch hole in the canvas with an extension rod. Oops. [Mayhem occurs. Lawsuits get filed.] It cost Christie’s $487,624 to repair the damage. The insurance company involved hired two art experts who estimated the damage caused the painting’s value to drop by 20 percent, down to $80 million. [Rich people problems…]
You can own a poster of a Picasso, a paperback Pride and Prejudice, or a different diamond, but those are not the originals. Are these non-fungible originals actually things of “value?” That’s a philosophical question really. Value, like beauty, is in the eye of the beholder. A Picasso can represent truth to one person or merely splats of paint to someone else. But we as a race seem to like to assign numbers to things (often in the quest for amassing larger numbers) so somewhere there’s a market for most things.
WTF is a NFT? A non-fungible token is a unique piece of digital data (such as a drawing, music, writing, or anything else you can ideate) where ownership can be attributed. NFTs are primarily on the Ethereum blockchain, because Ethereum has the capacity to store the extra information needed to show ownership. NFTs are a new, unique “thing” that some people may deem to possess a distinct value. And there’s a fledgling market developing for them.
Will the NFT market become a lasting thing? Who knows. Maybe. Now that it has been created it will remain a reality, however, it will ebb and flow over the years just like every other market. Whether it becomes a viable market such as stocks, fine art, or Pokémon cards today, or it follows the 17th century Dutch tulip bulb market (which went bust), Beanie Baby market (which went bust), or Pokémon cards tomorrow (which may someday go bust?) nobody knows. Keep in mind, Dutch tulip bulbs and Beanie Babies are still traded today so those markets did not disappear, but they are barely a sliver of the mania of years past. Ebb and flow.
So, why did I bother making a NFT?
Here are my top reasons:
- Because I was curious (although curiosity reportedly killed the cat);
- Because it was relatively low cost to explore (although by no means was it free);
- Because I was aware of cryptocurrency in its infancy years ago and didn’t get involved (with a small twinge of regret) and I’m seeing some NFTs being acquired for absurd amounts (neither of which I realize are great reasons); and
- But mostly, I don’t want to not understand where our tech world is heading so I’m trying to stay on the learning curve as it speeds along.
Supposedly, there is a growing group of NFT Collectors who are building NFT portfolios for investment purposes. These reports are probably hyped by companies trying to lure people like me into joining a platform. I can only expect those Collectors (like most collectors) are exceptionally few and far between. For a Creator to be successful on any of these platforms, just like in any other art market, they should be relying on a combination of their existing supporters plus maybe a few strangers who might somehow come across their work and find it worthy. The old-school approaches to being a marketable artist — connection with your audience, credentials, track record of sales or other accomplishments — remain just as important to selling NFTs as traditional forms of media.
Where can I sell a NFT? After reading voraciously on the subject for a few months, I decided to look more closely at a few different NFT auction platforms. I’ll discuss my experience with OpenSea.io here.
OpenSea is the Ebay of NFTs. It is the largest platform, but is also a free-for-all where any amount of good stuff is mixed in with what seems to be heaps of noise and random work.
Here are the steps to creating a NFT on OpenSea:
1. Open a Creator account
2. Create a crypto wallet, link it to OpenSea
3. Pay OpenSea’s initialization fee
4. Create digital copies of your work
5. Add your items to your account
6. List your items for sale or auction
7. Promote your NFTs through your social media and other channels
8. Optional: Connect with other NFT creators and grow your support system
Step 1. Open a Creator account on OpenSea.io.
This was quick to begin with, slow to complete (with Steps 2 and 3 below).
Create a User Name, add a profile photo or image, and a brief bio. You can link your Twitter and Instagram accounts to provide more opportunities to showcase your work.
The next thing OpenSea asks you to do is link your crypto wallet to your new account. If you don’t have one already, OpenSea provides a list of sites where you can open a new crypto wallet. I chose Metamask.io because it was the first in the list and was relying on OpenSea’s diligence in choosing their providers.
Step 2. Create a crypto wallet
Similar to a bank account, a crypto wallet is a password-protected account where you can store your cryptocurrency. A wallet can be stored on a physical device such as a computer hard drive or USB drive (known as a “cold” wallet) or online (a “hot” wallet”). The good news about a crypto wallet is that, handled properly, only you can gain access to it. The bad news is exactly the same, however, only you have access to it.
Every so often there are news articles about someone who had bought Bitcoin many years ago but forgot about it. With BitCoin skyrocketing somewhere between $25,000 to $75,000 each, the stories usually talk about how that person is desperately trying to recover millions of dollars of unrealized Bitcoin profits from their now-defunct or discarded computer. And they probably forgot their password too.
Personally, I tend to upgrade my computer every two or three years for work reasons, and — even though I try to be careful in organizing, managing, and transferring my files from one computer to the next — I can’t ever transfer everything with 100 percent accuracy. So a cold, physical wallet is not best for my habits.
The risk with hot, online wallets is if someone obtains your password. If a thief gets access into your online wallet they can transfer your coins to their account and you have no (I mean Zero, Zip, Nada) means of recovering your stolen money. The thief can easily move your coins from your wallet to another wallet and then another wallet, obfuscating any trail for recovery. Unlike a centralized banking system, where transactions are linked and recorded and fraudulent transactions can sometimes be reversed (Nigerian princes notwithstanding), blockchain’s decentralized system does not provide those protections.
To protect my passwords, for several years I have used the LastPass password keeper. It allows me to generate ridiculously long (like 60 characters long) passwords that it securely stores in my 2-factor authenticated account. To protect my crypto wallet login on Metamask, I use a complex password, secured in LastPass. [BTW: this is an affiliate link, which means LastPass will pay me a small fee if someone subscribes using this link. I only recommend services I am willing to stand behind. No pressure, I just like their service.]
To work on your computer, Metamask requires you to install an extension for your Chrome, Firefox, Edge or Brave browser(s). Setting up the wallet was fairly straightforward. Metamask will assign you an extremely long Wallet ID comprised of random numbers and letters.
Importantly, Metamask also generated a 12-word random phrase (really random, such as “longing rusted furnace daybreak seventeen benign nine homecoming one freight soldier winter”) that is the critical, life-or-death master password to keep safely stored forever. If you lose your phrase, you lose your wallet. If someone steals your phrase, you lose your wallet.
You are advised to write this phrase down on paper. Never store it on your computer or unprotected online to prevent thieves from finding your password and emptying your wallet. Because paper is, well, paper, some people have gone so far as to stamp their phrases onto metal plates and place them in physical vaults or safety deposit boxes. Whatever clever tactic you devise for yours, keep it safe. Also, store it in a way your next-of-kin can find and decode should your wallet outlast you.
Step 3. Pay OpenSea’s Initialization Fee
OpenSea charged an initiation fee to connect my wallet to their platform.
Conducting a blockchain transaction consumes computing power somewhere out in the world, and there is a cost to that, known as a “gas” fee. Gas refers to the computational effort required to run specific operations on the Ethereum network, and the prices (annoyingly) can fluctuate wildly from minute to minute and throughout the course of a day.
OpenSea is structured so that, after paying the upfront fee to initialize your account, posting NFTs do not incur “minting” charges until they are sold, which is extremely more economical than having to pay minting charges when you post an item for sale, as they can add up quickly. At the time of this writing, I’m seeing minting costs ranging from about $100 to $200 per item. By not charging minting fees until an item is actually sold, OpenSea allows creators to generate many NFTs for sale in the hopes that a few will be sold. This approach also exponentially increases the number of NFTs that can get piled onto the platform. It promotes quantity over quality.
The cost to initialize my OpenSea account was approximately 0.05 Ethereum for gas fees. More specifically, OpenSea said it would cost me 0.052356221 Ethereum. One of the incredibly intimidating things about getting into crypto is the math. You’ll just have to get used to looking at long decimals, there’s no way around it.
At about 4:00PM Eastern Standard Time on Friday afternoon, January 21, 2021, the dollar price estimate for the 0.05 Ethereum initialization fee was about $276. I had read that gas fees can drop down dramatically after U.S. business hours so decided to wait and price it again later that evening before committing.
To pay the initialization fee, I had to have funds available in my crypto wallet so placed a deposit of $350 through Metamask using my bank debit card. Metamask sent me to another payment service called Wyre to handle the funds transfer. I received a confirmation from Wyre stating I deposited 0.1218[and blah blah blah more decimal points] Ethereum, costing $350. There was a also fee of $20 on top of that that wasn’t clearly disclosed previously. When I checked a few minutes later, the market value that showed up in my Metamask account was about $330 due to a drop in Ethereum price.
At about 8:45PM EST, I looked at the initialization fee again and saw that gas fees dropped down to about $170, a significant difference, so I initiated the transaction. OpenSea withdrew the Ethereum amount from my wallet immediately.
One thing I am rapidly learning about crypto is that the prices swing WILDLY.
I have a finance background, and I’ve always known that, for my personality, trying to watch the stock market daily is way too stressful. I would much rather set it and forget it, taking a look at my accounts, say, once a month. Because I know watching market movements causes me heartburn, I prefer to take a longer-term, Warren Buffetty slow and steady approach with the stock market. I’ve dabbled in stock picking and have failed repeatedly, so now I only look at index funds. I don’t need to beat the stock market, I just want to keep up with it long term, understanding that with enough time it continues to increase, even with shocks to the market and bearish downturns.
The price of Ethereum on the day I posted my first NFT was as high as $3,030 and as low as $2,500 (a 17 percent drop), closing at the about $2,558. I keep saying “about” because I see different numbers on different finance websites, another annoying thing I’m discovering about crypto.
I realize that even looking at NFTs is wholly speculative, so I am limiting my exposure to a venture capital-type approach. Today, I’m willing to consider a very tiny stake in the hopes of outsized gains. I am not willing to risk money I can’t afford to lose on NFTs. Plus the education I’m receiving on the subject is valuable to me, and that helps me justify my $350 stake as the cost of tuition.
Bottom line: gas fees are incurred with every transaction, even if you’re not buying or selling cryptocurrencies itself. They fluctuate dramatically depending on when you execute them. Just like other markets, there’s no good way to predict when it is most opportune to do so, but the sharp spikes and drops in pricing make this especially speculative.
Step 4. Create digital copies of your work
If you are a creative person interested in NFTs, I’m assuming you’d like to progress as a commercially-viable artist whose best work is represented. I’m also assuming you are going to connect somehow with your population of folks who might have reason to want to support, encourage, or just follow your work and vision.
Create high quality, high resolution (if possible) digital copies of the items you would like to convert into NFTs. OpenSea accepts files in numerous formats, including JPG, PNG, GIF, MP4 and a bunch of others I don’t work in. The largest file acceptable file size is 100 MB, which probably only becomes as issue if you are selling a video file.
For my first NFTs I decided to use a series of digital photographs I took in May 2012, when I participated in a private viewing of a Gutenberg Bible at Princeton University. I liked how my first venture into new technology would showcase one of the earliest examples of information technology. Regardless of any religious connotations, the Gutenberg Bible was important because it was one of the earliest books printed using moveable type, rather than being hand-written, which meant that it could be mass produced and information could be more accessible to the public.
I checked my images in Adobe PhotoShop, made sure I was satisfied with the colors and saturation, and then saved them in their original 24-megapixel resolution taken from my Nikon DSLR. I saved each image at maximum image quality, uncompressed to provide the highest quality file possible.
As an extra step to help keep me organized, I edited the filenames and put them in sequential order by adding numbers ranging from 001 to 015 and the end of each filename. I thought it would also look nicer in my collection to have it curated that way.
Step 5. Add Your Items to your Account
OpenSea has multiple categories of NFTs for sale, including Art, Collectibles, Domain Names, Music, Photography, Sports, Trading Cards, Utility, and Virtual Worlds. I’ll focus on the Art and Photography categories right now, and will discuss the other categories in future articles.
OpenSea allows you to group your work into Collections to keep them organized, and to let buyers see the full body of work.
To create a Collection, click your profile image, go to My Collections, and then (you guessed it) click “Create a Collection.”
Because there are so may items for sale on OpenSea (and this is a good practice on any platform), I’m a big believer in providing as much useful, interesting information as possible about a Collection or item. Unless your reputation truly precedes you and you have bidders ready to scoop up your artworks, assume people who are viewing your items would benefit from some further insight into you and what motivates your work.
My series consisted of 15 photographs, so I organized them into a Collection I titled ”The Gutenberg Bible: Dawn of the Information Age.”
Collections allow a written description of up to 1,000 characters to be displayed in one single block of text (so no ability to add line breaks for easy reading or a prettier look). Mine read:
“The Gutenberg Bible represents the Dawn of the Information Age. Daniel Farber Huang viewed this 1455 Gutenberg Bible in a private viewing at Princeton University’s Firestone Library on May 4, 2012, where he made these photographs. Daniel’s documentary photography was recently included by the Smithsonian’s National Museum of American History for their “Hidden Voices, Hidden Stories” series. The Gutenberg Bible was the earliest major book printed using mass-produced movable metal type in Europe. It marked the start of the “Gutenberg Revolution” and the age of printed books in the West. The book is valued and revered for its high aesthetic and artistic qualities as well as its historic significance. It is an edition of the Latin Vulgate printed in the 1450s by Johannes Gutenberg in Mainz, in present-day Germany. This 1455 Gutenberg Bible was gifted to Princeton University’s Firestone Library in 2015 by the Scheide Family and has been housed within the Firestone Library since 1959.”
Will anyone read that? If there’s interest in the work, I hope so. Either way, I always want to present my work professionally, so I believe these efforts help demonstrate over time that I take my work seriously.
To add an item to your account, click the “Create” option at the top of the screen, which brings you to the “Create New Item” page.
Add your image, video, audio, or 3D Model, give it a name, add an external link and description. You can also connect it to one of your Collections. At the moment, OpenSea allows you to offer one copy of your item for sale. They claim they option of offering multiple copies is coming soon.
There are additional properties you can adjust but the above are the most important to get you going.
OpenSea uses the Ethereum blockchain by default for creating NFTs but also offers Polygon, which it describes as a fast, gas-free blockchain experience that works with Ethereum. I used Ethereum for this Collection. I’ll experiment with Polygon on future items.
Click “Create” and you’re halfway there to posting your NFT for sale.
Step 6. List your item for sale or auction
On your item’s description page, click the large “Sell” button at the top.
On the sale page, you can choose to sell your item for either a fixed price or a timed auction. Auction default times are 1, 3, and 7 days, but you can choose whatever you deem appropriate. I listed my Gutenberg Bible images for a 1-month auction, ending February 28, 2022.
You set your prices in Ethereum coins, not dollars, so Ethereum’s sharp price fluctuations will add uncertainty to this market. OpenSea will show what the current dollar value is for your Ethereum prices. You can set fractions of a coin, so starting bids can be as low as $1. Similar to Ebay, you can also set a reserve price, or the minimum price you are willing to sell for. If the auction ends and the reserve price is not met, the auction will be cancelled.
Hit the “Complete Listing” button. OpenSea requires you to confirm the listing by sending you a signature request through Metamask. Click “Sign” and your item is now listed for sale. Woohoo.
At the end of the auction, if the highest bid was below the reserve price and the auction was cancelled, and you really want to sell the item, you can consider contacting the highest bidder and negotiating a sale through OpenSea. Or you can consider refining your item’s description and re-listing the item.
Step 7. Promote your NFTs through your social media and other channels
OpenSea provides sharing links for Twitter, Facebook, and email you can use. Beyond that, you’ll have to rely on the secret sauce you’ve developed for your personal branding online and in person. It’s always good to experiment with new things so do try to enjoy your learning process as it unfolds.
Step 8. Optional: Connect with other NFT creators and grow your support system
There are a plethora of Creators you can follow on OpenSea and other NFT sites. It’s informative to see what successful, active or just plain interesting participants are doing today. I’ve been selectively following Creators whose work intrigues me, and seeing if there are best practices I can learn from and possibly emulate.
The NFT space is rapidly evolving, still trying to figure itself out. I expect it will swing wildly for the next several years, and not make much logical sense (but then again, the stock market isn’t much different on either of those two points). It remains to be seen if the NFT market has staying power or if it will burst in the next economic downturn. Regardless of the commercial value, however, there is a place for this technology somewhere in our collective future — possibly useful for an entirely different purpose than is being used today — so it’s worth understanding at even a rudimentary level.
Buckle up, it’s going to be a bumpy ride.
Daniel Farber Huang is an artist, documentary photographer, humanitarian advocate, author, and corporate finance strategist. Daniel’s work is included in the permanent collections of numerous fine art museums and historic institutions across the U.S., including the International Center of Photography, the New York Historical Society, the Museum of the City of New York, Museum of Chinese in America, the New York City Fire Museum, the Smithsonian and other cultural institutions. You can see more of Daniel’s broad body of work at www.DanielFarberHuang.com
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