The abbreviation NFT stands for non-fungible token. Essentially, these tokens allow us to transfer ownership of digital property, from images and videos to weapons in video games. The transfer of NFTs takes place via blockchain, similar to buying, sending, and selling cryptocurrencies, but there is a difference. Cryptocurrencies are interchangeable – every Bitcoin is equal to another. Each NFT, however, is linked to a specific work of art that is unique and non-fungible.
When we hear that NFTs represent ownership of digital works, our first concern is piracy. A physical artwork can be locked away in a safe at home, but a digital image can be downloaded by anyone, printed, and hung in their apartment. However, there is a significant difference when it comes to NFTs; all digital NFT content can be freely shared on the internet without any concern. Every NFT is precisely recorded on the blockchain. We can “steal” an image, but we cannot steal ownership – that is securely recorded on the blockchain. Sharing may even be desirable, as it increases the visibility of a work of art and thereby increases the value of the NFT, the “ownership contract”… Owners therefore don’t worry about someone taking a screenshot of their precious NFT and using it as a wallpaper on their smartphone – you are the owner of the NFT, and that can always be verified.
Interest in NFTs grew incredibly alongside interest in other cryptocurrencies at the beginning of 2020, thanks in part to many social media influencers around the world who drew attention to this new crypto opportunity or even began offering their own NFTs in the form of various artworks. If you are tempted to purchase a unique NFT token and the artwork associated with it, this can be done through many platforms, the most well-known of which is OpenSea. NFTs are mostly purchased with the cryptocurrency Ethereum, as the transfer of ownership takes place primarily via the Ethereum blockchain.
Before we begin the process of creating and subsequently selling or purchasing an NFT, we need to determine which platform we want to use, which cryptocurrency we want to use for buying, selling, paying fees… We also need to create our own crypto wallet, in which we will hold our chosen cryptocurrencies and later also NFTs.
If you are interested in NFTs, ask yourself whether this is right for you. If you think you can make enormous amounts of money from it, you will be wrong in the vast majority of cases. It is also advisable not to get into it simply because your friends or acquaintances are doing it. The biggest problem with NFTs are the fees. The vast majority of NFTs are sold and purchased via the Ethereum blockchain, and every transaction through it requires paying a fee. These fees are called “gas” and they vary. Almost everything you do via the blockchain will cost you “gas” fees, from minting NFTs to sending, buying, and selling. Even if you want a specific one you spot at an auction, you will have to pay a “gas” fee for every bid you submit.
You must be aware that there is no 100% guarantee that your transaction will be confirmed. You may pay very high fees, but in the end someone else may be willing to pay even more, and you will lose that auction – and unfortunately, the money spent on fees will not be refunded.
The first thing you need to do before learning how NFTs are created is to choose any item or object that you want to digitize and turn into an NFT. This can be anything. It can be memes, GIFs, your own artwork at home. However, there are a huge number of dubious NFTs from people selling their selfies or images of their underwear in digital form for high sums…
You need to understand that an NFT is a very exclusive digital item, where one person can own an entire collection at any given moment. Keep in mind that most NFT collections are published on various websites, such as rarity.tools, where they are ranked by release date and by rarity, which also contributes to their value. The rarer and more unique it is, the greater its value. However, also bear in mind the unwritten rule that an NFT is only worth as much as someone is willing to pay for it. Although it may seem obvious that you need to ensure you hold the copyright to a particular item you wish to digitize and later sell, it is important to keep in mind that selling items for which you do not hold the copyright can lead to legal problems and lawsuits.
Choose the platform on which you want to sell and buy NFTs
There are dozens of platforms that allow you to sell NFTs, so it is almost impossible for anyone to present all of them to you, let alone tell you which one is right for your project.
Both OpenSea and Rarible allow you to create NFTs on Ethereum without paying, thanks to what are called “lazy minting” systems. Lazy minting allows you to create an NFT and list it for sale without it actually being recorded on the blockchain, thereby avoiding any fees. When someone actually buys it, the fees for recording your NFT on the blockchain will be combined with the transfer fees to the buyer. This helps you avoid the situation of paying €10 to €30 (or more) to mint an NFT that nobody buys.
Using OpenSea, listing your first Ethereum NFT for sale will require initializing your account, which can be an expensive transaction, typically costing €300 to €400. This is a one-time payment, and after paying it you will be able to lazy mint NFTs without having to pay anything.
Using Rarible, on the other hand, you won’t have to pay anything to list your NFT, however if you remove your NFT from the marketplace you will have to pay a certain fee, with prices ranging between €20 and €30. Both Rarible and OpenSea will receive a 2.5% commission from your sale. For example, if you sell an NFT for 0.025 ETH, you will receive 0.024375 ETH.
Create your own digital wallet
NFT wallets are digital wallets that help you store NFTs and cryptocurrencies in one place. These wallets help you receive additional funds in addition to purchasing with funds you already own. The recent surge in NFT purchases has also led to the development of functionality in NFT wallets for storing NFT art after minting or purchasing. Interestingly, an NFT wallet doesn’t actually hold assets in the digital equivalent of a specific bank account.
The MetaMask wallet is one of the wallets widely supported by Ethereum-based applications such as OpenSea, Foundation, and others, and can be used as a Chrome/Firefox extension or as an iOS/Android app. Coinbase also has its own wallet, which you can use as an extension or app and is supported by most platforms. You may want to consider the Coinbase wallet if you plan to engage with cryptocurrencies more broadly, as it also supports non-Ethereum-based blockchains.
The setup processes for MetaMask and Coinbase Wallet are very similar. Once you have the browser extension or app installed, select the “Create a new wallet” option. Coinbase will ask you for a username, and both will ask you for a password, which you’ll want to make as secure as possible. It’s best to write this password down on a piece of paper and store it somewhere only you will have access to.
Both MetaMask and Coinbase will then assign you a recovery phrase (seed phrase) in the form of 12 random words. It is very important that you write these words down on paper or in a secure location that only you will have access to, as this allows you to potentially recover your account if, for example, you delete the app or want to use your digital wallet on another device. MetaMask will ask you to re-enter the recovery phrase after saving it, while Coinbase will ask if you want it to save your recovery phrase to the cloud when setting up the app via your mobile phone. If you set up Coinbase with the extension via a computer, or choose to back it up manually rather than saving it to the cloud, you will need to repeat the same process as with MetaMask and enter all the words manually.
In the event that you lose or forget your password or seed phrase, unfortunately neither MetaMask nor Coinbase can help you. This means you will lose access to all cryptocurrencies or NFTs you had stored in that digital wallet.
Once you have your wallet ready, you need to connect it to the NFT marketplace you intend to use. OpenSea and Rarible make this process very straightforward, as you can easily connect your wallet by clicking “Create”, after which you are shown a full list of compatible wallets to choose from, where you select your digital wallet.
If you have the MetaMask or Coinbase extension installed, you will see a prompt asking if you want to connect your wallet.
You should be very careful if you see a request to connect your wallet anywhere when you are not expecting it, as various scammers may try to access your cryptocurrencies or NFTs, so only use official websites. If it is an unknown website asking you to connect your wallet, make sure you know exactly what it is before accepting the request.
Create your NFT and publish it on OpenSea
The first step you need to take is to choose any object, person, or item that you want to turn into an NFT. Here you have truly unlimited options, from elements and items from video games to memes… Or you can simply create one yourself. You have complete freedom here, just make sure you don’t publish an NFT that is someone else’s property in real life, as this can lead to various lawsuits.
Once you connect your wallet, you will arrive at the page used for creating NFTs. If you are not directed to this page, you can get there by clicking “Create”. Before you start creating NFTs, you should know that both platforms support collections. If you want to create a collection of NFTs, you will first need to select “My collections” and then “Create a collection”.
In case you don’t want to create your own NFT, you can visit the Fiverr website, where others can create an NFT for you for a fee. On Fiverr, people mostly create collections. If you want to create your own collection, Fiverr is definitely the right choice for you.
Once your NFT is ready to be published, go to OpenSea, where you select the “Create” option, and you will then be redirected to the publishing page. To begin, click on the field with the image icon, where you will upload the file you want to publish and later sell.
Once you add the file, assign it a name or title. The “External link” field can be used to add a URL that redirects potential buyers to your website or Twitter account. Then write a description for your NFT, which should contain text that is as brief and concise as possible and best describes your NFT.
In the next step, you choose which blockchain you will mint your NFT on, and you can choose between Ethereum and Polygon. Once you select a blockchain, you will no longer be able to change it.
When you are ready, you can select the “Create” option. Depending on the options you have chosen and the type of file you are selling as an NFT, you may need to wait a moment for your NFT to load. Once this process is complete, you will see a screen stating that your NFT has been created.
On the Ethereum and Polygon blockchains, you will have the option to set a fixed price, with the difference being that through the Ethereum blockchain you can also create a time-limited auction. To set a fixed price, simply enter the amount you wish to receive upon sale (listed in ETH, but an approximate amount in dollars will also be displayed). Once you set the price, simply select “Complete listing” and your NFT will be ready for sale.
Before you can publish it, however, keep in mind that you must first pay to initialize your wallet in ETH, so you need to already have Ethereum cryptocurrency in your wallet beforehand. Your NFT will then be listed for sale on OpenSea.
We are not financial advisors. All information regarding NFTs is accepted at your own risk. Do your own research as well.
