Non-fungible tokens (NFTs) are becoming increasingly popular for a number of reasons. You have gained a lot of traction; Proponents of NFTs believe they will change the face of digital content. The rate of NFT creation as well as the sales rate is increasing rapidly.
What does it mean when something is not fungible? Well, an item is fungible when it can be easily replaced. For example, one dollar can be replaced with another dollar or with a hundred cents. Bitcoin is fungible because you can exchange one bitcoin for another. On the other hand, a non-fungible item is unique and cannot be replaced by another item. Non-fungible tokens are unique or rare digital assets.
NFTs can be used to represent any kind of real or intangible object. These include works of art, music, virtual land (property), video clips of iconic sports moments, collectibles such as digital trading cards, virtual items in video games, virtual currency and tokenized real assets. You can find more NFT use cases on our blog here.
Creating an NFT does not require any substantial knowledge or technical background. A creator can create NFTs such as GIFs, pictures, video clips, or music.
Before creating an NFT, you need to decide which blockchain you want to use to output your NFTs. Most of the NFT activity is currently happening on the Ethereum blockchain. However, there are many blockchains to choose from, including:
- Binance smart chain
- Flow by dapper labs
All of these blockchains have their own NFT token standard, compatible wallet services and marketplaces. Since Ethereum has the largest NFT user base, let’s take a look at what you need to have before creating an NFT on the Ethereum blockchain:
- You need an Ethereum wallet that supports the Ethereum-based NFT token standard ERC-721. For example, you need a wallet such as MetaMask, Trust Wallet or Coinbase Wallet
- To conduct transactions on Ethereum, you need to have around $ 50 to $ 100 of Ether (ETH) in your wallet. You can purchase ETH on any crypto exchange.
Once you have that, you need to upload the file you want to convert to an NFT to the platform. If you’re building an NFT on Ethereum-based blockchain, keep it in your wallet.
A marketplace allows you to create your own NFTs. All you have to do is register and become a listed artist on the marketplace. The most popular NFT marketplaces are:
- Open sea
- Very rare
- Foundation, endowment
- Nuclear market
- Myth market
- Known origin
- Enjin Market Place
OpenSea is the largest marketplace for Ethereum-based NFTs. Recently, the platform announced a feature that will allow developers to mint NFTs without paying gas fees, which we will discuss below. Many individual developers use OpenSea to create and sell NFTs.
To upload an NFT, create a collection and name it. Then add all of your NFTs to the collection. You can create NFTs with any type of digital content file like picture, video, music, etc. After creating the NFT, add a name and description and set the rarity of the NFTs. Rarity is one of the most important factors in determining the value of an individual NFT.
It doesn’t cost you anything to build an NFT on platforms like OpenSea. Other platforms may charge a fee known as a “gas fee” on Ethereum-based platforms.
The Ethereum gas fee is the amount of ether required to perform a specific function on the blockchain. In this case, gas charges are required to add a new NFT to the marketplace. As more people transact value on the grid, gas charges will be higher at that point.
Most NFT marketplaces allow you to list and sell your NFTs. You need to find the NFTs in your collection and find the sale button by clicking on them. Clicking the “Sell” button will take you to the pricing page. On the price page you can define the conditions of a sale. You can choose to conduct an auction or sell the NFTs at a fixed price.
The most common cryptocurrencies used to buy / sell NFTs are Ether or other ERC-20 tokens. However, some platforms only support the native token of the blockchain on which they were built. For example, VIV3 is a flow blockchain marketplace and only accepts FLOW tokens.
To sell NFTs on the largest NFT marketplace, OpenSea, navigate to the assets page for a selected NFT and click Sell. You can choose between the types of sale, including fixed price, auction, and bundled sales.
You will also find the ability to program license fees on OpenSea, which allows you to earn a commission every time a user sells an NFT that you have created. This is the most powerful aspect of NFTs, and it allows the creators to earn a lifetime passive income. No matter how many times NFT is sold after an initial sale, the original creator will still generate revenue.
The NFT trend has picked up momentum over the past year. Digital creators can make significant income by creating and selling their own tokens. Big brands and celebrities have signed agreements to release their own tokens. With new ideas popping up every day, the trend shows no signs of slowing down.