NFT (Non-Fungible Token)

If you’ve been on the internet recently, you’ve probably heard about NFTs, the latest craze in digital assets. This craze has erupted because of the large sums of money generated by this new format of an entirely digital transaction. However, NFTs aren’t new, they have been here for some time. The first NFT was sold for the first time back in 2012. They only gained notoriety until recently, when one of Beeple’s artworks sold for $69 million through a Christie’s auction. To help creators maximize on NFTs – that are quickly becoming a mainstay – we go into detail about what NFTs are and how you can begin creating NFTs.

FAQ

What are NFTs?

Even with all the hype, very few people understand what NFTs are.

NFTs – or non-fungible tokens – are unique digital items.

Available on the Ethereum blockchain, NFTs cannot be replicated, hence the non-fungible aspect. The term fungible means the ability to replace one item with an identical item. Unlike other cryptocurrencies, like Bitcoin, NFTs can’t be replaced like-for-like.

When you sell an NFT, only one of the digital assets you created exist in the world. Although millions of people can download it, the data linked to an NFT is what makes it worthwhile.

When you download it, not only is there no history of your download on the blockchain but there’s also no data to prove that you’re the owner of something truly unique. Making any other download worthless.

Who are NFTs best for?

As is the case with any marketplace, two parties benefit from the sale of NFTs: buyers and sellers.

Most NFT buyers are speculators who are using their money – often stored in the form of cryptocurrency – and wealth to profit from being early adopters. Their hope is that, in time, NFTs will appreciate much like Bitcoin and other cryptocurrencies have.

As for sellers, they range from artists to musicians, videographers and photographers and encompass the entire creator spectrum. These sellers are using this new digital medium to monetize their digital creations, to establish an audience, and, in some instances, just make ridiculous sums of money.

Of course, most creators aren’t going to make $69 million from one digital asset. But, NFTs can be an excellent way to monetize your creations and develop an audience.

Additionally, there’s a possibility to continue to make a profit from your NFTs after the initial sale by enabling a feature that allows you to earn from future sales.

Can Anyone Make An NFT?

Anything digital, even this article, can be sold as an NFT. Therefore, so long as you can turn an item into a digital asset, it can be sold as an NFT. If you know how to use a PC, the internet, and cryptocurrency, you can make an NFT. There are no prerequisites to who can sell an NFT and most of the marketplaces turn your digital assets into NFTs without the need for any coding or blockchain experience. Essentially, marketplaces make creating NFTs easier by being a simple plug-and-play option.

Why Are NFTs Worth?

As we mentioned previously, the data behind the NFT is what makes it worthwhile. Even if millions of people download a copy or – as the creator – you keep the original asset, the data hosted within the NFT is what validates it as being unique and valuable as no other digital asset – even if downloaded – will have that same data. This makes it worthwhile to NFT buyers who can prove to future buyers that they own the original NFT.

How Can You Create An NFT?

NFTs are digital assets. Therefore, to create an NFT you first need to create the digital asset. You then list that NFT on a marketplace for collectors and investors to buy. You can sell everything from artwork, domains, collectibles, trading cards, virtual worlds, and videos can be sold on these marketplaces. The work you sell should be yours. You should either hold the copyright for the work or have permission from the owner to use it.

How Can You Sell An NFT?

If you don’t hold any crypto, the first step is to create a crypto wallet and then buy some cryptocurrency so you can join the marketplace.

Once you have this wallet, you can upload your NFT, determine its price and quantity, and voila, you have an NFT.

But before you list your NFT as 100 ETH, remember that the amount listed isn’t the equivalent of a dollar value. So, it’s important to understand the exchange rate between dollars and ETH before you list your item.

What Are The Best NFT Marketplaces?

The more popular NFTs are becoming, the more choice creators have to profit from NFTs. Some of the most popular marketplaces are Open Sea, Nifty Gateway, and Rarible. Each of these marketplaces allows creators to sell their digital assets directly to buyers and collectors. There are also NFT social networks that allow you to showcase your NFTs to other users. Showtime is one contributor in this space and allows digital artists to showcase their NFTs.

How Much Do NFTs cost?

It’s really up to you. You can create a flat fee for your NFT or sell it on auction. Beeple was able to sell an NFT through a Christie’s auction for $69 million. However, it is necessary to note that the final artwork was a collection of 5000 pieces of art, hence the name Everydays: the First 5000 Days.

Jack Dorsey – the founder of Twitter – was able to sell his first tweet as an NFT for $2.9 million. These are all noteworthy digital assets to own. Other sales include the Cryptopunk collection, which was some of the first NFTs that breached the million-dollar mark and were created in 2017.

In most instances, the cost of an NFT from a new creator or inventor without an existing audience will be far lower. Possibly in the 3 or 4-digit range, unless it is something truly unique.

Unfortunately, these figures could be driven down by the number of artists only trying to cash out from the NFT space and not creating truly inspiring art.

Don’t expect to make millions selling your NFTs. The market is still very speculative at this stage, so you could make plenty from one NFT and not much from another. At this stage, most of the million-dollar NFTs are already well-known digital assets. But, that shouldn’t discourage you from entering this space, there’s still so much you can do to maximize this fairly new industry.

Create Something Unique

Once the hype around NFTs dies down, the creators that will continue to generate income from this form of digital consumption will be those making unique artwork or selling extraordinary assets. Think about NFTs like any other marketplace. Buyers want value. Therefore, you may want to consider creating purely one-of-a-kind artwork that buyers won’t find elsewhere online, or you could improve your existing artwork by creating an iteration of what you’ve already developed. For example, you may have self-published a song but choose to sell the extended version as an NFT, or you could sell a video iteration of your static artwork that may already be on sale elsewhere. There are infinite possibilities of what you can sell as an NFT, but the overall concept should be that it is unique and high quality.

Continue Creating and Testing

Even if you don’t sell your first NFT, don’t let that discourage you from creating NFTs. You can join cryptocurrency subreddits like Eth to get an understanding of what crypto investors would buy as digital artwork. You can also test your ideas on Showtime or social media to see what you should improve to ensure you make sales.

Enable Recurring Earning Feature

On marketplaces that allow you to enable a recurring earning feature, be sure you do it. This way, if your NFT happens to make more on resale, you still earn a percentage of the profit. Since it is a blockchain transaction, you could earn in perpetuity as every future sale is easy to track.

As NFTs become more mainstream, the community of buyers and sellers will grow. As a creator, be sure that you add value to this growing community to ensure you can consistently generate income from it and don’t turn interested investors away.

Now that digital artwork and transactions hold similar value to tangible assets, by becoming a valued member of this community, you’re also ensuring that you can leverage future opportunities.

If you have any questions or comments about NFTs please add them to the discussion.