I don’t believe you’ve ever heard of Mike Winkelmann. He is a digital artist who sold his tokenized masterpiece Everydays: The First 5000 Days for an unbelievable $69.3 million. This has made Winkelmann (also known as Beeple) one of the most valued artists in art history.
For me, it’s still fascinating that this ultra-expensive piece of art wasn’t made on canvas. Beeple sells NFTs — a form of tokenizing art and other individual property under decentralized rules. NFTs are a trendy business nowadays, and their creation is easier than you can imagine, even though there are a few key points that need to be seriously considered.
So, if the general NFT notion still confuses you, I’ll try to explain it in everyday language. Then, we’ll go through NFTs’ “production” and their market exposure. The only thing that I won’t be able to share with you is how to get millions for your NFT work.
What Is an NFT?
An NFT stands for a non-fungible token, so let’s clarify the fungibility first. Non-fungible implies that the token is unique. Unlike cryptocurrencies, you can’t have 2 identical NFTs. This doesn’t mean that you can’t do anything with your NFTs. On the contrary, there is an immense market for trading nun-fungible tokens. You can buy NFTs against other crypto and fiat currencies, collect NFTs as rare valuables, or create NFTs and sell them.
On a fundamental level, NFTs are blockchain products similar to BTC and all other crypto assets. The blockchain is a public self-governed ledger that uses complex mechanisms to maintain impeccable security, immutability, and full automation of all transactions that take place there.
The reason I’m bringing up the blockchain is to point out that your ownership of a single NFT will never be questioned by a centralized company or a bank. And this is the simplest explanation I can give you on NFTs — your work stays in its original form, but your ownership is tokenized or, in other words, recorded on the blockchain. The first NFT was Quantum, created by Kevin McCoy and Anil Dash in 2014.
Now, let’s focus on the term intellectual property. Even though the first association of NFTs is a digital replacement of fine art, you can tokenize everything — GIFs, images, and even tweets. For example, the Twitter founder sold his first tweet for $3 million.
I suppose you’d ask now — how on earth can somebody own a tweet when everyone can find it on the internet, share, and download it? Well, it’s the same art analogy. Everyone can share, print, and replicate Mona Liza, but at the end of the day, it’s the property of the French Republic.
How to Create an NFT
As I already said, NFTs can serve as a good basis for income in the blockchain industry. You can buy a particular NFT at a lower price and sell it higher. Or, you can make your brand and place it on the market. In this article, we’ll focus on selling, so I want to be sure you’re familiar with the flow of tokenization.
Making NFTs is popularly known as minting. The majority of NFT marketplaces enable you to mint NFTs using their platforms. Currently, the largest NFT market is OpenSea, so I’ll use it for my step-by-step guide. Overall, this is what it gets to create your NFT for selling purposes.
Step 1: Consider the Price for Creating and Selling an NFT
NFTs are a blooming field and, in some way, part of our mainstream culture. This means that NFT minting is much easier now as the process has been simplified to a non-coding level. Yet, there are a few factors for you to consider before jumping into this colourful world.
Technically, most platforms allow you to mint an NFT for free, but the creation, buying, and selling of NFTs come with a considerable blockchain-imposed fee. To explain, the native blockchain of these artsy tokens is Ethereum, even though there are a few other blockchains like Cardano, EOS, and Binance Smart Chain suitable for accommodating NFTs. Just for the record, the Bitcoin blockchain doesn’t support NFTs.
Each Ethereum transaction requires energy-intensive computations on behalf of miners that users compensate by paying fees. The Ethereum gas fees are by far the most expensive transaction fees in the industry. The process of converting digital formats into digital assets is an Ethereum transaction, so the same fees apply here too. The thing is that gas fees aren’t directly associated with the NFT price, so the $40 average can affect your price target regardless of whether you’re buying or selling an NFT.
Step 2: Choose What Type of NFT You Will Create
NFTs can appear in multiple forms. Trends are changing so fast in this space, so you need to carefully examine market demands and target audiences at the moment of creation. As I said at the beginning, NFTs can range from artwork, 3D art, installations, and game-skins to music, videos, tweets, and memes. They can also take on multiple file formats — PNG, JPG, etc. Hence, this off-chain part of your NFT plan has to be completed before landing on a particular NFT platform.
Step 3: Select an NFT Marketplace
Thanks to the wide-open NFT market, finding a suitable marketplace shouldn’t be hard. While we’ll cover the best-ranked NFT spots in the how-to-sell section, I’d like to point out a few things first.
You should know that each NFT marketplace has its own set of rules and fees for minting new units and might target specific NFTs or blockchains. For instance, Axie focuses on video games and game characters. Rarible, on the other hand, requires users to use their native Rarible crypto. I believe that much of OpenSea popularity lies in its open approach to various NFT types.
Step 4: Ensure You Have the Required Amount of Crypto to Fund Your Wallet
This is one of the most important prerequisites for creating and selling your NFT. Platforms will usually ask you to pay a fee before the minting process, even though a few marketplaces that allow for so-called lazy mining, i.e. transferring the fee obligations to the buyer.
The most commonly used crypto in the NFT ecosystem is Ether (ETH), but it’s not always the case. Even though it’s the type of blockchain that determines the cryptocurrency, some NFT platforms are very flexible in terms of payment options and available blockchains.
Step 5: Prepare Your File in a Digital Format
At this point, you’ll need your “piece of art” placed and prepared on your computer. As I said, NFT platforms accept nearly all digital forms. But what if you create physical art? Can you present it as an NFT? Sure you can, but only if you digitalize it first.
Step 6: Fund Your Crypto Wallet
The most important thing is to choose a cryptocurrency wallet that is compatible with Ethereum as the majority of NFTs are built on top of it. The wallet will enable you to store and transfer your ETH coins, necessary for settling the required transaction fees and listing costs if required.
OpenSea supports almost all Ethereum-based wallets, but I must admit that the MetaMask wallet is accepted as the golden standard in the NFT field. It operates both as a browser extension (with Chrome, Firefox, and Brave) and a mobile app. Metamask has become popular among the avid NFT community because of its non-custodial nature combined with the convenience of use and its ability to serve as a gateway to decentralized apps (dApps).
My advice is to use the MetaMask browser version for creating your own NFT. Just navigate to the wallet’s official website and you’ll find a fully instructed guide on how to install and activate the extension. After installing the wallet, you must fund it with ETH.
Step 7: Connect Your Wallet to the NFT Marketplace
Now, head towards OpenSea to pair your wallet with the marketplace. This process is pretty streamlined, but for NFT creators and market-listers, OpenSea requires setting up an account. This incurs some gas fees, so make sure you have topped up your MetaMask.
Then, find the Wallet option in the upper right corner and select MetaMask. Get back to your wallet and follow the instructions to complete the process.
Step 8: Build Your NFT
Near Wallets, you’ll see the Create button on the OpenSea homepage. You’ll have to upload your digital file and give it a name. Describe your work and, optionally, attach an external link to it.
At this point, you should know that your NFT brings new royalty earnings each time it’s resold to another user after the first purchase. So before you confirm the minting of your new NFT, you’ll have to set the royalty payouts – 5%-10% is quite an acceptable range. When you complete this stage, your NFT will be created and accommodated in your OpenSea NFT collection.
How to Sell NFTs
As you can see, creating a new NFT doesn’t require specific skills except the ability to fund your MetaMask account. My point is that creation is the easy part. Now, it’s time to place your product on the market, which can be overwhelming for a non-tech-savvy artist.
Step 1: Select the NFT You Want to Sell
To put an NFT on sale, you’ll have to navigate to the Profile section on your OpenSea dashboard. There you’ll see a list of all the NFTs you’ve created. When you click on one, OpenSea will display a window containing all the information related to your product. You’ll also see two options, Edit and Sell. If you don’t want to make any final adjustments, choose Sell.
Step 2: Make an Offer
From my experience, this is the key stage in developing your NFT career. Making an NFT offer doesn’t differ much from making an Amazon offer. At this point, you’ll need to set the NFT price and the listing duration.
OpenSea has established 2 ways of selling on its platform — fixed price and timed auction. As their names suggest, the first approach will allow other users to purchase your NFT under a given price, while the second will let buyers make price offers in a predetermined timeframe. Let’s discuss the 2 selling approaches in more detail.
At first sight, explaining the fixed price option may seem unnecessary as it doesn’t differ from any other type of online sale. You just set a particular amount and wait for a buyer to respond to your offer and execute the transaction.
However, I’d like to highlight another handy functionality that OpenSea offers under the fixed price option. Namely, while setting the price, you’ll notice a Sell to Anyone on the pop-up panel. The thing is that you can change the Anyone option and insert a specific public crypto address instead. This can be exceptionally convenient if you have already found a buyer or your NFT is reserved for a specific user. In such cases, OpenSea serves as a channel for executing a secure transaction.
This functionality can be a bit vague for beginners, but it’s based on the simple principle of bidding, so I don’t believe you’ll need much time to learn the ropes.
There are two possible ways to place a timed auction. The first is called Sell to the Highest Bidder and it’s identical to the traditional bidding system. Potential buyers can bid on your offer during the time interval you set. When the time is over, the bidder with the highest offer will take the asset, and you’ll get the full amount in return.
Before activating this option, you must determine the lowest or the starting price. If the bid ends up with offers that are lower than your threshold, the platform will give you a chance to choose whether you’ll accept or decline the offer.
The second type of timed auction is what we know as Dutch Auction. Here, you also set an initial fixed price with the difference that the price falls as time goes by. When using this selling mechanism, you’ll have to determine the initial price, the time, and the final or minimum price. When a user bids for your NFT, it will be sold under the fixed price method — at the price shown at the time of the bid.
Step 5: Complete the Sale
After completing the required information and selecting the listing method, you’ll need to wait for a seller. Once someone selects your product, you’ll need to finish the sale by signing the transaction. Make sure that your crypto wallet is connected with OpenSea at the time of the transaction.
This process runs pretty smoothly on OpenSea. All steps for authorizing the wallet are clearly stated on the page. Once the listing is completed and all criteria are met both by the buyer and the seller, the transaction process is executed automatically.
Other Popular NFT Marketplaces to Sell Your NFT
OpenSea was founded back in 2017 and over time, it has become a synonym for NFTs. However, after NFTs became a big hit at the end of 2020, numerous NFT marketplaces started popping up on the scene carving out an industry for themselves. As I said, many of them are oriented toward special NFT types.
Axie Infinity is the most popular NFT game where users can get real-life rewards for their achievements. The game comes with its Axie marketplace, making it the largest online store for game-related NFTs.
Here you can buy and sell Axie Infinity characters — mystical creatures that you buy, breed, train, and otherwise prepare for a virtual battle. On the Axie marketplace, you can also find all the necessary equipment and lands for the battle.
NBA Top Shot Marketplace
NBA has made an excellent entrance into the NFT world and, admittedly, used the NFT frenzy to its great advantage. For all basketball fans, the NBA Top Shot offers tokenized collectibles in the form of video shots, recorded highlight moments, and other NBA digital memorabilia. The price of the products can range from a few dollars to 6-figure items.
The NBA Top Shot marketplace runs as an exclusive NBA partner and uses the Flow blockchain, with Dapper Labs as its founders. The platform features exceptional ease of use, allowing direct access from the Top Shot website.
You must have heard about CryptoPunks, even if you’re not into the NFT world. Powered by Larva Labs, the CryptoPunks have turned out to be one of the greatest NFT projects so far.
CryptoPunks appeared in 2017, and they were initially given away for free. Over time, some items from the CryptoPunk collection got sold for millions of dollars. The collection has been sold out for a long time, but you can find them now and then on other marketplaces as valuable pieces of digital art.
The Larva Lab marketplace offers you numerous other projects built on the Ethereum blockchain, with Autoglyphs as the most ambitious one.
Rarible reminds me of OpenSea in many respects because of its open approach towards various kinds of NFTs. This marketplace offers all kinds of digital artwork, videos, and music under a single roof. Rarible cooperates with some of the greatest brands that have listed their NFTs items, including Adobe, Taco Bell, and plenty more.
However, unlike OpenSea, which is open to various blockchains and payment methods, Rarible promotes exclusiveness for its native Rarible token, which is built on the Ethereum blockchain.
SuperRare is following the same policy of NFT diversification as OpenSea and Rarible. It’s a modern marketplace that enables a seamless presentation of various digital creators. The platform’s design is exceptionally intuitive and includes different forms of art, memes, and 3D installations, but the payment is currently restricted to Ethereum only.
However, SuperRare has announced the release of its Ethereum-based token that will help new talents enter the vast market.
A Few Words Before You Go…
While the idea behind NFTs isn’t so difficult to grasp, marketplaces can cause headaches to new digital creators since, in one way or another, they all require direct interaction with the blockchain. Things have become even more complicated with the exclusive use of specific blockchains and digital wallets on each popular marketplace.
On the other hand, I couldn’t agree more that NFTs are the art format of the future. Since this new wave of creative expression is blockchain-based, getting some blockchain knowledge is worth the effort. I can readily say that NFTs have put creative work on a higher level by providing creators with multiple benefits such as full transparency, clear ownership, and robust security of their work.
Finally, don’t expect that you’ll surpass Beeple — very few NFTs sell at a 6-figure price. Yet, the NFT world has elements of both the crypto and the art market, so unexpected turnarounds are always possible.