Non-fungible tokens, better known as NFTs, are one of the hottest trends of 2021. At the intersection of cryptocurrencies and digital art, NFTs provide creators with a unique new opportunity to monetize their content. In this blog, we’ll break down everything you need to know to start creating and selling NFTs using your own original content.
What Does NFT Mean?
NFT stands for non-fungible token, which is a special type of cryptocurrency that represents a unique digital asset. Kind of like a certificate of authenticity for digital images, videos and audio recordings. Unlike traditional cryptocurrencies such as Bitcoin (which are basically digital dollar bills), the original artist or seller defines the price of each NFT.
Think of it like buying an original piece of art. No one is stopping the artist from printing copies of their painting and passing them out all over town. But the original is worth something to collectors. But how do you prove that you have the original of a digital file that can easily be replicated? That’s where Blockchain comes in...
What Is Blockchain And What Does It Have To Do With NFTs?
A blockchain is essentially a digital ledger that keeps track of cryptocurrency transactions. This method of recording data is highly resistant to hacking, making it the perfect solution for online trading. The concept was first conceptualized in 2008 as a way to buy and sell the cryptocurrency Bitcoin.
When a transaction occurs, all of the data is recorded as a “block” in the blockchain. Anyone can see the details of the transaction, making it impossible to game the system as you’d basically be robbing the bank in broad daylight.
Anytime you buy or sell an NFT, the transaction is recorded as a block in the blockchain and used to verify the authenticity of the purchase. Ethereum (ETH) is currently the most popular blockchain used for buying and selling NFTs. It uses Ether as the primary currency, which is the second-largest cryptocurrency, after Bitcoin.
How NFTs Are Changing The Game For Content Creators
Above, we mentioned that buying an NFT is like buying an original peice of art. And while that’s true for the purchaser, NFTs offer one unique feature for creators that physical artwork does not: royalties.
Because NFTs are minted and sold on the blockchain, we’re able to track every sale, which makes it infinitely easier to collect and manage royalty payments. Artists select a royalty percentage when posting an NFT. If their work is ever resold in the future, the original artist automatically receives a royalty payment.
This is a game changer for artists, as it allows them to control their own royalties. In the past, most artists hired publishers, managers or agents to handle payments and royalties—all of whom take a cut. With NFTs, artists are able to retain complete control over their payments without any additional paperwork.
How To Buy NFTs
Ready to add some digital art to your collection? Your first step is to visit one of the many NFT marketplaces and browse for a piece you’d like to buy. OpenSea, Rarible and Mintable are all popular options.
Once you find a piece you’d like to own, you’ll need to set up a crypto wallet and purchase enough Ether to cover the transaction—just like converting currencies or buying tokens at an arcade. MetaMask is one of the most popular crypto wallets and integrates seamlessly with a variety of blockchain-based applications. You can purchase Ether directly through MetaMask, or using one of the popular crypto trading sites such as Coinbase or Robinhood.
It’s important to note that any transaction using Ether will cost you an additional “gas fee,” which is a processing fee for using the Ethereum blockchain. These fees fluctuate and can cost anywhere from $10 to $1,000 USD per transaction, depending on the day. Be sure to check the average Ethereum gas price to make sure it’s not spiking when you want to list your NFT.
Additionally, most marketplaces charge network fees, so be sure to purchase enough Ether to cover the full amount.
How To Create And Sell An NFT
Creating an NFT is actually a pretty straightforward process and doesn’t require any experience with cryptocurrency. If you haven’t already, start by creating an account on one of the NFT marketplaces listed above and purchasing some Ether to cover the processing fees for listing an NFT.
While the specific steps will vary depending on which platform you use, the general process for listing an NFT is the same:
- Create a collection of one or more pieces you’d like to sell
- Upload the file you’d like to “mint” and sell, along with any additional files you’d like to include, such as bonus or behind-the-scenes material
- Choose your selling parameters:
- Sell at a fixed price for an unlimited duration
- Sell at a gradually reducing price over a period of time
- Auction for a limited time with a reserve price
- Enter the price for each item (be sure to charge enough to cover any processing fees)
- Select your royalty percentage
- Connect your crypto wallet and pay the processing fees to mint and list your NFT in the marketplace
How Much Are NFTs Worth?
Much like any other work of art, the value is highly subjective. The price is determined by the seller and can range anywhere from a few cents to tens of millions of dollars.
Recently, the digital artist Beeple sold a piece called “Everydays: the First 5000 Days” for over $69 million, setting the record for the most expensive NFT ever sold. NFTs have generated more than $500 million in revenue in the past month alone.
BITPOD.95 By mike winkelmann aka. beeple - behance.net, CC BY 4.0.
However, you shouldn’t expect to sell your original content for millions without a strong following. Just because NFTs are popular right now doesn’t mean that people are buying up any works available. NFTs are collector’s items, so make sure you price your work accordingly to suit your super-fans.
Interested in learning more about how to create your own content? Check out our blog for tips on making YouTube videos, podcasts and more!