How to create an NFT: A beginner’s guide
Anyone familiar with NFTs (non-fungible tokens) with recognise Murat Pak.
The digital artist, who dominated crypto news at the start of December 2021, is one of the biggest names in the NFT industry. He sold 312,686 fractionalised pieces of his NFT, The Merge, for $91.8m to 28,983 collectors.
NFTs are cryptographic tokens exchanged on public blockchains. They represent a unique digital asset, available as pictures, videos, audio and sometimes even in physical form. NFT are powered by smart contracts. Their ownership can be verified using distributed ledger technology.
2021 was a successful year for NFTs, with users sending at least $44.2bn worth of cryptocurrency to ERC-721 and ERC-1155 contracts associated with NFT marketplaces and collections.
Anyone can generate an NFT. Many are wondering how to repeat the success of some sellers and how to create an NFT themselves.
Here is our guide on how to make an NFT and sell it.
Identify your niche
Pierre Benjamin, an NFT artist at Quantus Gallery, told Capital.com that any aspiring NFT creator should first decide the direction of their project.
The very first NFT, Quantus by Kevin McCoy, was created in 2014. It was sold by Sotheby’s in 2021. The industry is young, with a lot of opportunities for new artists to find their market niche.
According to CoinMarketCap, as of the time of writing (18 January 2022), some of the all-time best performing NFTs include basis.markets, Skeleton Crew Skulls and Flippies. Aspiring creators can use them as inspiration.
While many NFTs are based on digital art, they need not be. Ghozali Ghozalu, a teenager from Indonesia, earned over $1m by selling his selfies as NFTs. He’d taken the same photo in front of his computer everyday for the last five years. Ghozali Everyday, his collection on OpenSea, one of the biggest NFT trading platforms, was traded at a volume of 375 ETH surpassing $1.2m in value.
Choose the best marketplace
NFTs are sold on special marketplaces that connect to your digital cryptocurrency wallet. They require you to use cryptocurrencies to sell and purchase assets. Some of the most popular NFT marketplaces are OpenSea, Nifty Gateway, Rarible and SuperRare.
Cryptocurrency exchange platform Coinbase announced in October that it will soon also launch its NFT marketplace, where people will be able to mint (tokenise), buy and showcase their digital art.
In order to make NFT selling and buying accessible to more people, Coinbase signed a partnership with Mastercard that will allow people to use their cards to make NFT purchases on Coinbase’s upcoming marketplace without having to purchase cryptocurrency first, thus potentially breaking the NFTs’ crypto-dependency.
A number of NFT marketplaces allow you to make NFTs for free, including OpenSea and Rarible. However, Brad Wilson, CEO and founder of NuPay Technologies, a cryptocurrency-focused institution, stressed that sometimes marketplaces will ask NFT creators to pay to list their digital art.
“An example of this is the marketplace OpenSea. The platform doesn’t charge you to list your NFT, however, using ‘Lazy Mining’ instead where the buyer pays the blockchain costs.
“However, there’s a catch. You will need to pay to list your first Ethereum NFT for sale, which can cost up to $10,000 (depending on the traffic)! Make sure you read the fine print.”
Create your digital wallet
Starting an NFT project also means it is time for you to set up a digital wallet and purchase some cryptocurrency.
Wilson noted that when deciding which cryptocurrency is best for you, you should ensure that it’s compatible with your choice of marketplace.
Budgeting, potential works and bookkeeping plans will make the process of making and selling NFT art much easier, Wilson added.
“All cryptocurrencies vary in stability, if you’re looking for something that has longevity, have a look at their market summaries,” he said.
Many NFTs are often linked to the Ethereum blockchain, which is supported by a number of digital wallets, including Ledger, Trezor, Coinbase and MetaMask.
Create a hype…and start selling
Selling NFTs is all about creating hype, according to Patrik Arnesson, co-founder and CEO of Forza Ikonia, an incubator for NFTs. As NFT prices depend on demand, gaining popularity may be one of the best ways to make money on NFTs.
Arnesson added that in order for potential buyers to gain access to the NFT when it drops, they should have access to a Discord or be whitelisted by the creator.
Creating a Discord channel will generate scarcity, allowing the creator to know approximately how many people are interested in purchasing their NFT and how many they should release. For example, if 50,000 people join a discord channel, a creator may only release 10,000 NFTs, Arnesson said.
Selling NFTs through a marketplace is quite straightforward. You can upload your NFT and add a description. You will then be asked to connect your digital wallet to the platform to pay for any required gas (fees) and receive payments for any digital art you sell.
Arnesson suggested that in order for there to be a long-term value to the NFT you create, there needs to be an element of utility that buyers can hold on to.
“The best NFTs provide the holder with more than just the NFT itself. Perhaps the holder gets a ticket to space or access to a celebrity,” he said. “Whatever it is, any NFT should provide the holder with benefits beyond just bragging rights.”
Is there anything legal to watch out for?
A major part of NFTs is their uniqueness, which relates to copyright and IP (intellectual property) laws.
“NFTs are new but existing intellectual property (IP) frameworks are being grafted onto them. For example, copyright or trademark rights may subsist in a tweet, film clip or virtual asset which is the subject of the NFT,” Simon Portman, of counsel at Marks & Clerk, told Capital.com.
“That does not mean, necessarily, that the buyer will be acquiring rights in the underlying asset itself and they could be in trouble if they seek to replicate, use or sell on the underlying asset itself when the smart contract does not allow this.”
NFT minters and sellers also have the right to impose any additional copyright rules on their generated NFT. In short, if you don’t want a buyer to resell or edit your NFT, just make sure to inform them.
Any risks?
NFTs are an investment, and just like with any investment, there are risks.
Pierre Benjamin, an NFT artist at Quantus Gallery, advised beginner artists to turn to a trusted and popular marketplace like OpenSea, Rarible, Foundations or Nifty Gateway to avoid facing any problems.
“If one is looking to make a profit, that’s when creators need to assess the risks. The volatility of NFT projects can be very high in some cases,” he told Capital.com.
“You always hear about the successful projects but not the thousands of projects that get released that sadly no one wants to buy. It can be risky to release an NFT or NFT series, but what’s life without some risk?”
NuPay Technologies’s Wilson suggested artists look into marketplaces that go that extra mile to protect creators from NFT scams such as PRISM, which has a new feature called ProtectArt that enables NFT creators to keep their digital art safe.
FAQs
Can anyone create an NFT?
Yes, anyone can create NFTs. NFTs are cryptographic tokens exchanged on public blockchains that represent a unique digital asset, either in picture, video, audio and sometimes even in physical form. NFT are powered by smart contracts. Their ownership can be verified using distributed ledger technology.
Is it possible to create NFT art without coding?
Yes, it is possible to create NFT art without coding. There are a number of NFT marketplaces or NFT generation websites that allow aspiring sellers to create their non-fungible tokens without the need for code.