NFTs may present a digital counterpart to fine art collecting by virtue of ownership rights and skyrocketing values.
In the ever-evolving world of digital media, Non-fungible Tokens, or NFTs, are fast becoming something quite sensational. But what are NFTs? And how are they changing the landscape of digital art? Here’s an overview of what NFTs are and how they can be created.
What is an NFT?
While the term Non-fungible Token might sound like a complex business insider secret or a government scheme, it quite simply refers to a unique digital asset. This means that it is one of a kind and cannot be traded for something else of the same value.
An NFT is any piece of digital media – Gifs, text files, songs, memes, images, videos, or even a tweet – that can be stored on a blockchain to be bought and sold. Most NFTs can be found as part of the blockchain of the Ethereum cryptocurrency, although others can, and have, established their versions of NFTs.
An NFT is essentially a signed certificate of authenticity, verified by the creator, that makes an asset unique, making NFTs perfect as collectibles. Think of it as the certificate of authenticity that comes with a work of art purchased at an auction, stating that the work is genuine and not an imitation or a mere copy. This helps in creating a dynamic market to utilize the tech for the creation and sale of digital art.
Selling and buying digital art as NFTs has some significant benefits.
As each NFT is digitally unique, it makes them easily verifiable through the creator. Content creators can sell their work from anywhere and get access to a global market while retaining ownership rights over their own work and directly claiming resale royalties. So, through an NFT sale, one can easily establish the status of being the creator of a work, determine the scarcity of the work and conduct the sale through any NFT marketplace, or peer-to-peer, without the need of any intermediate.
Auctioned NFTs can reach seemingly unreasonably high bids for the ownership of a particularly rare work of art. As the creator can set scarcity limits on a piece of work, some NFTs are truly one of a kind and others are very limited in number. It is something akin to the Mona Lisa by Leonardo Da Vinci, which is the only work of its kind, or The Pikachu Illustrator Promo Trading Card – only 39 of which were ever released! Similar to fine art collecting, the rarity of a piece of digital art can add to its value.
Can anyone mint and sell an NFT?
Absolutely! Another major perk of NFTs is that you don’t need extensive knowledge of crypto or cutting-edge technology to create them. With the help of a few basic tools and an investment amount, one can have a beginner’s set up to minting NFTs with just a smartphone.
Here’s how one can go about creating their very first NFT!
Minting an NFT from scratch would require one to have access to a crypto blockchain and an NFT Marketplace. This can be accomplished with the following steps:
(For the sake of simplicity, we shall take Ethereum as an example.)
Step 1. Creating a Digital Wallet
A digital wallet is where one securely stores the Crypto Currency (ETH in this case) that is used to buy, sell and create NFTs. This wallet would allow one to safely sign in and create accounts on NFT marketplaces.
Some well-known platforms for this are Coinbase, MetaMask and Rainbow to name a few.
Step 2. Purchasing the Cryptocurrency
Once the digital wallet has been set up, a small amount of Ethereum can be purchased to cover the cost of minting one’s first NFT, as most major digital marketplaces have fees associated with converting content to NFTs.
Platforms, like MetaMask and Rainbow, allow users to purchase cryptocurrency directly into their wallets without the need for third-party exchange.
Step 3. Linking digital wallet to an NFT Marketplace
With a wallet and capital in the clutch, one now needs a platform to create and list their NFT.
Digital wallets are easily and securely connectable to marketplaces via QR code. This automatically sets up an account in the marketplace.
Marketplaces like Rarible, OpenSea, and Zora are some good places to start minting.
Now that we have our pre-requisites in hand, we can now get to:
Minting one’s first NFT
Step 1. Create a digital art file
This bit is fairly simple. Any file format compatible with one’s preferred marketplace can be made into an NFT.
For example, any image, JPG, MP3, TXT, PNG or GIF file can be an NFT on Zora or Rarible.
Step 2. Creating a listing for your art piece on the marketplace
Users can start a listing by clicking the Create button. This is in the top right corner of the screen on Rarible.
The marketplace will present the user with an option of minting their work as a one-of-a-kind piece or as a collection of multiple items, setting the name of the NFT and then setting a sale price.
Once all these criteria have been met, the marketplace would request an amount of ETHs as the fee required to mint a new NFT. This is known as the “Gas Fee”, which compensates for the energy and effort that goes into the complex computational task of creating an NFT.
Once the gas fee has been paid, the newly minted NFT goes live on the marketplace in mere seconds!
Step 3. Bids
Once an NFT is live on the market, anyone wanting to purchase it is now free to make a bid. Upon receiving an adequate bid for their NFT, the user may go ahead and make a sale.
Things to keep in mind when creating NFTs
- The price of Gas fees may vary greatly from platform to platform and day-to-day. It may sometimes even be higher than the listed sale price of the work itself. It is therefore essential to put in one’s research before choosing a platform to sell your NFT on. Tools like NFT Gas Station can help you make a better-informed decision.
- While the ownership rights of the NFT can only rest with one owner at a time, copies of NFT content can be made. Think of it as creating a print of an original painting. However, in this case, a copy is virtually indistinguishable from the original.
- While NFTs are an undeniable financial asset, they have the potential to become an environmental hazard in the long term. A single Ethereum transaction consumes at least 70.32 kWh of power. This is equivalent to a carbon footprint of around 34 Kg of carbon dioxide (CO2).
NFTs are assets whose value is only expected to increase in the near future. So, with this article, you are now armed to begin your own NFT journey.
Header image from Wikimedia Commons