In the world of NFTs, you can either be a creator, a collector, or if you really want, both, so I feel it’s important we do an in-depth rundown of how to get started making or “minting” NFTs, and what to do if you’re interested in buying some.
How Do I Get Started With NFTs?
Making a Product
If you wish to be a creator, it all starts with the creative process, after all, you have to produce something in order to sell it. As long as you export your creation as a file supported by the NFT architecture, it’s all good.
You'll be happy to hear that NFT currently supports a diverse range of file types, so no matter your discipline and how you like to work, the chances are you can make your creation an NFT. Let’s quickly discuss compatible file types for clarity’s sake…
- JPEG, PNG, GIF, SVG - These are your standard image-based files. If you’re a photographer or a visual digital artist, you’ll need to work in these file formats in order to make the NFT transaction.
- GLB, GLTF - You may not have heard of these. They’re 3-dimensional files commonly used in virtual reality simulations. They support motion and animation but can also be used to store static 3-D models.
- PDF - A PDF is a read-only, text-based file. It might be used to sell written work or even event tickets. If you’re a writer or promoter looking to get in on the first floor of the digital marketing revolution, you may want to consider working in PDF.
- MP3, WAV - These, of course, are audio files, so if you’ve written some killer music, and you want to avoid the pitfalls of the established industry, NFTs are a great way to do it. You’ll see far more profit than using industry middlemen and streaming services. That said, audio files don’t have to be music. Think outside the box. Who knows what there’s a market for.
- MP4, WEBM - These are usually compressed video files, but they can be used for audio too. So, are you a brilliant animator? Are you a filmmaker? A YouTuber perhaps? If so, as long as the file is supported, you can hook your work up to an NFT deed and sell it as a unique digital product.
- OGG - A multimedia file type, OGG files are a Jack of all trades sort of outfit. They can store audio, video, text, and metadata.
Bear in mind, these are just some of the files that you can use to get started with NFTs, and the list is likely to grow and shrink along with file relevance and the creation of new file types.
It’s also important to understand that there will be capacity limits on your file. Take MintBase for example. They state that to upload an image, it must be no larger than 10MB, while other files may stretch to a maximum of 16MB.
If you’ve created a voluminous file that doesn’t fit the NFT profile, you could try compressing it using a program such as WinZip.
It’s a completely lossless process, so the quality of the contents won’t be affected. It’s basically just the equivalent of sitting on your suitcase to get it to zip up.
Choosing a Minting Platform
Once you’ve created your digital masterpiece, it’s time to make and attach an NFT to it. If you’re wondering, the term NFT can refer to both the product and the deed of ownership, but strictly speaking, it’s just the deed.
The creation of NFTs is known as minting or tokenizing. To do so, you’ll need to upload your file to a minting platform.
There is a myriad of minting platforms attached to the Ethereum Blockchain at the minute, so it can be a little hard to decide what’s right for you, but I’ll break it down for you.
You can think of all the minting platforms as existing in two main categories: DIY and membership. Platforms such as Rarible, OpenSea, InfiNET, Cargo, and MintBase are examples of platforms in the DIY category. Creators can use them to tokenize their creations without express permission.
SuperRare and Async Art, on the other hand, are exclusive, membership-only platforms that you’ll need to apply to be a part of.
Creating and Connecting Ethereum Wallet
Before you can tokenize your digital work, you’ll need to invest in some ETH, Ethereum’s native cryptocurrency.
To do this, you’ll need to visit a digital currency exchange, set the desired exchange to dollars for ETH, choose your payment method, and voilà! You’re in the NFT game.
Next, you have to choose a wallet. There are a bunch of different services that offer cryptocurrency storage, so it’s essential you do some research to find out which offers the most security and flexibility. MetaMask is currently the most popular digital wallet, so I recommend starting your search there.
Now you can upload your wallet to your chosen minting platform. You may be wondering why you just had to spend a wad of cash.
You came here to make money, right? Well, the old adage, you have to spend money to make money couldn’t be more relevant here.
Unfortunately, you’ll encounter something known as NFT gas fees when you’re tokenizing your work. This is the toll fee for using the group of computers that make up the Blockchain where the NFT will be processed and stored.
This fee is by no means a fixed rate, so you’ll need to be patient and pick a moment when rates are low. I highly recommend reading this What are NFT gas fees article to help you get the best deal.
A great way to get started and test the waters with NFTs is to use a minting platform that has a “gas-free” service. This doesn’t necessarily mean that there won’t be an eventual transaction fee, but it will only be applied if your NFT sells.
Again, check the aforementioned article on NFT gas fees for loads more information on the subject.
The Minting Process
Before the tokenization takes place, you have to set it up with some accurate descriptions. You can choose whether your creation is a unique or standalone piece, part of a limited run, or, well...anything really. At this stage, you’ll also get to set up the fine details of the contract such as royalty fees.
Once all this admin is accounted for, you can pay your gas fees with your ETH wallet and that’s that. You’ve made an NFT.
There are two main types of buyers in the digital realm, those that enjoy the culture and work who like collecting things that appeal to them, and those who are looking to make an ROI (return on investment).
Whichever of these groups you subscribe to, your first port of call should be to create your Ethereum wallet. Then it’s just a case of browsing NFT auctions and holding platforms to find something you like or is worth investing in.
Tips for Those in It for the Fun
- Just enjoy yourself.
- Check less popular marketplaces.
- Don’t spend too much at a time.
- Know the details of the smart contract
Tips for Securing ROI from NFTs
- You should prioritize artist acclaim and keep your finger on the pulse of up and comers. Reputation is valuable.
- Unique, one-of-a-kind NFTs are worth more than series pieces. The more scarcity involved, the higher the profit of resale will be.
- Monitor the traffic and transaction activity of projects. The more action a project sees, the more potential it has of being valuable.
- Security is everything. You’ll need multi-factor user authentication on any wallet or account you use to store your ETH and NFTs.
What can I do with an NFT?
Once again, to answer this question in full, we need to look at it from a creator’s perspective and a collector’s perspective.
Selling Your NFTs
Obviously, as a creator, your primary motive is to sell your work, but there are a few different ways to do so. One of the most common ways of getting your work the exposure it deserves is by registering it on an NFT auction platform.
Similar to eBay, these sites display your work and all the necessary information about them alongside a countdown clock. Prospective buyers can then bid on your product.
If you have built up some serious acclaim, taking the auction route can be incredibly lucrative. Take the digital artist, Beeple, for example. He just sold a wide selection of his digital artwork for $69,000,000 at auction.
As he sold a collection rather than individual pieces, it actually only works out to about $10,000 apiece, but you get the point - there’s money to be made!
You can also just put your NFTs on the market for a fixed price. This is the selling method of choice for beginners, so I recommend you start your journey here.
Just make sure you account for any eventual transaction fees before pricing your work. The last thing you want is to come out of a transaction light of pocket and empty-handed.
To get your NFT set up for sale, you’ll need to choose between these formats, and then find a corresponding marketplace. OpenSea is a popular option for fixed-price sales, while platforms such as Rarible are masters of the auction format.
I recommend engaging in a spot of in-depth marketplace research before making your final decision. If you’re unsure where to start, our What is the Best NFT Marketplace article is the perfect jumpstart on the topic.
You can think of smart contracts as a digital rendition of a standard contract. It automatically keeps track of the parameters and legality of a sale. You can use these intelligent contracts to establish your conditions for the sale.
Do you want to receive royalties on resale? Do you want to retain distribution rights of duplicates?
Do you want to put restrictions on what the buyer can do with the NFT? All of this can be hammered out in the smart contract, so think carefully about what you want out of each sale.
Destroying Your NFT
If the feeling takes you, you can also cast your NFT into the fire Lord-of-the-Rings-style, and burn it. Burning an NFT is to delete the NFT token, not the product.
Why would you want to do such a thing after paying the minting fee? Well, if you made any errors during the minting process, unfortunately, NFTs cannot be edited after completion. Your only option is to start from scratch.
As you might have already surmised, burning an NFT isn’t a free process. Managing data on a Blockchain is a pretty complex endeavor, so you’ll have to invest some ETH to get the job done.
We’ve all experienced buyer’s remorse after making an impulse purchase before, but when you’ve just spent your hard-earned cash on something completely intangible, that familiar feeling of regret can be intensified.
Don’t worry, though, friend. Let’s discuss all the things you can do with your NFTs.
Collect and Enjoy
Your first option is to simply collect NFTs like baseball or Pokémon cards. Building up an impressive collection of NFTs can be every bit as enjoyable as visiting a museum of fine art.
What you can actually do with the pieces in your collection may vary from piece to piece depending on the file type, the nature of the smart contract, and the platforms you used to purchase and access it.
You’ll be able to listen to your audio NFT whenever you want, but there may be limitations on further actions. Say, for instance, that you bought a one-of-a-kind studio recording from one of your favorite artists.
You’ll be able to play it and throw some shapes around your living room whenever the feeling takes you, but you may not be permitted to upload it to a streaming service. It all depends on what’s been agreed upon.
In regard to visual NFTs, you can access them via the NFT deed itself and marvel at their digital beauty, and there are no real rules that prohibit duplication.
If you wanted, as long as there were no restrictions in the contract, you could print your favorites, frame them, and hang them on your wall, or use them as the background on your phone or computer.
NFTs within the gaming sphere are some of the most interesting around. I think one of the best examples of this innovative approach to ownership can be seen in Decentraland.
Decentraland is essentially a digital market within a virtual game world. You can purchase digital land for development, then sell it on or use it as an advertisement.
You can even use this visual world to create your very own markets. As you’re playing with real cryptocurrency, it blurs the lines between real and virtual worlds. It’s a little frightening, but it’s also incredibly interesting and teeming with potential.
If you’ve purchased an internet domain as an NFT, you can create your very own website. It could be an online store, a monetized blog, an informational hub - the sky’s the limit.
Did you know that you can actually use your NFTs as collateral if you need to borrow cryptocurrency? How it works is you establish which NFTs you’d be willing to set down as collateral. The lender then chooses which they’d prefer.
The chosen NFT is then held in an escrow contract (a sort of purgatorial in-between owners phase). If the borrower fails to reach the repayment stipulations of the lender's contract, the NFT then officially becomes the lender’s property. If repayment promises are kept, the NFT returns to the original owner.
This service isn’t so widespread yet, but if you’re interested in learning more, visit NFTfi, one of the pioneers of this sort of NFT-based lending.
Loans aren’t the only way NFTs can be utilized in finance. Certain insurance companies tokenize their contracts, making them tradable in standard NFT marketplaces like Rarible.
If you’re looking to make a few bucks, no doubt the most interesting thing you can do with your NFTs is preparing them for resale. You won’t have to worry about re-minting or anything like that.
The original NFT is all you need. Simply choose the sale format and platform and upload your NFTs to their digital marketplace.
There will most likely be a listing fee, so make sure you’ve got at least a few Gwei (A smaller unit of the ETH currency) in your wallet.
There may also be a sales fee, but at that point, you’ll be rolling in ETH, so it’s less of a worry; however, you should always check the going rates before settling on a platform.
It’s also important to learn what’s not possible upon resale. Firstly, you cannot erase the terms set up by you and the creator of the NFT.
If it’s been established that the original seller gets a fraction of the resale profits, then that’s what’s going to happen.
Secondly, NFTs are typically indivisible digital objects, by which I mean that you cannot sell off fractions or shares in the NFT. It must exchange hands as a whole.
What is the benefit of NFTs?
As a creator, there are a ton of benefits to tokenizing your work. The main ones I’d like to talk about today are artist recognition and cutting out middlemen.
Let’s think about the traditional music industry. The artist essentially enters into a contract that helps them in the short term but in the grand scheme of things, they’re being conned out of the majority of their earnings.
The record label offers them a certain amount to pay for studio time, advertising, and to set up a tour.
The musicians still do all the actual work involved in creating the product, but the record label needs a return on its investment, and it takes it in the form of roughly 80% of their earnings.
Streaming services are worse. Even a world-dominating musical artist only stands to make a pittance from streaming services, and as that’s how most people access their music these days, artists are losing out big time.
Small artists, in particular, are finding it harder and harder to gain traction in the established and, to be frank, corrupt industry.
By using the NFT pipeline to set their own prices for their own work, not just musicians, but all sorts of artists can sell their products directly to their fan base, and see almost 100% of the profits.
NFTs at their core are all about creator recognition. An NFT puts a name and a face on the sole creator of a digital item, allowing them to benefit from their work. To clarify this statement, it helps to think about memes.
More and more, people are coming to realize the artistry of this internet phenomenon. We all enjoy them or “consume them” without charge and without any real thought for how they came about.
As we’ve recently seen with the NFT sale of the “Disaster Girl” photo, NFTs now afford these creators a way of monetizing their work. It’s not just meme masters that stand to benefit either.
Any digital pop culture piece can now be monetized. Take the Nyan Cat gif, for example. That magical feline has been doing the rounds for a decade, yet the creator, Chris Torres, never made a dime, until, that is, the NFT market made it possible. Now he’s enjoying the $600,000 he made from the sale of Nyan Cat.
NFT buyers stand to see the exact same benefit as creators. It’s a skyrocketing ecosystem rife with money-making potential, but again, it’s about more than just money.
Firstly, the very existence of the NFT market is a righteous act of defiance in the face of the tyrannical and archaic institutions of traditional finance. NFTs are a statement that preexisting paradigms are no longer fit for purpose.
Lastly, just as NFTs benefit creators by building a direct bridge to their fans, it allows buyers an ever more intimate relationship with the art and artists they love, creating a healthy, mutually beneficial symbiosis - middlemen be damned!