How to create an NFT? Everything you need to know

Non-Fungible Tokens (NFT) have taken the world by storm in recent years. You may have heard of collections like Bored Ape Yacht Club, or one-off creations like those by artists like Beeple, or even NFTs made for the metaverse by companies like NikeNKE
and Gucci.

Whether you think they really are the future of art, music and other fields or an overpriced, overhyped fad – and there are valid opinions on both sides of the debate – the fact remains that they have become extremely popular very quickly. And if you’re a creative type looking to get your work in front of a wider audience, there are some good reasons why you might be interested in understanding the process of making (or “making”) your own NFTs.

So here’s my quick overview of how to get started and a general guide to the stages of the process to give you a better understanding of one of the most interesting and potentially transformative technology trends.

So what is an NFT?

As the name suggests, an NFT is a token (an object that can be used to represent something else) that is not fungible. This means that it is unique – unlike, for example, money, which is a sign of a currency with many units that are all the same.

In digital terms, an NFT is a token stored on a blockchain. This means that it is held on an encrypted, distributed ledger – a database file of which multiple versions are stored on many different computers, and no one can change or modify any copy without consensus across the network.

Basically, because NFTs are tamper-proof (thanks to the encrypted nature of blockchains) and unique, they can be used as a unique identifier for another digital asset, such as an image, a video file, a piece of music, or pretty much anything else. TwitterTWTR
Founder Jack Dorsey created his first ever tweet as an NFT and sold it for nearly $3 million.

Why create an NFT?

The most obvious answer to this question may simply be to make money. However, the majority of NFTs will not sell for anything like the stratospheric amounts we have sometimes seen them go for. In fact, since it costs money to mint an NFT, it’s likely that most people who try it out will lose money in the process – although there are a couple of options to minimize the risk of this happening, which we’ll cover below.

However, there are still some good reasons to try. If you plan to make a living selling art, NFTs offer an interesting new model for building bridges between creators and consumers. First, they allow creators to reduce the hassle and cost of dealing with many of the middlemen who may be involved in marketing and selling their work. All it takes is a little understanding of the technological components involved, such as wallets and marketplaces, and you’re good to go.

Second, because they are blockchain-based – usually existing on platforms like EtherETH
um, SolanaSUN
Binance and TezosXTZ
– they can take advantage of “smart contract” functionality offered by these networks. This means that they can be programmed to execute code, and typically with NFT sales, this means code that ensures that every time the NFT is resold, a portion of the revenue goes directly to the original creator.

Another reason you might want to create an NFT is simply to understand the technology. Although at the moment we mostly hear about them being used to sell art and other creative works, all kinds of goods – from event tickets to rare whiskey and even diamonds – are sold with NFTs. Understanding the impact this new technology is likely to have on your industry, whatever it may be, is a valid reason why many people may be drawn to learning and experimenting with the tools and platforms in the NFT ecosystem.

Where should I start?

First, as mentioned above, you will choose which blockchain you want to use to create your NFT. Ethereum is by far the most popular blockchain used to hold NFTs, but it comes with some significant drawbacks. One of these is the high environmental costs associated with proof-of-work blockchains – which Ethereum still is, despite ongoing efforts to switch to a less energy-intensive proof-of-stake model. The technical differences are beyond the scope of this article, but you can read a primer here. Other networks such as PolygonMATIC
Solana and Tezos are already proof-of-stake, so if you know that the computers used to mint your coins generate carbon emissions, you might want to choose one of those.

Another downside to using Ethereum is that the fees – known as gas fees – charged for using the network are significantly higher than on many other blockchain networks. The fee varies depending on how busy the network is, but usually starts at around $20 to $30. On other networks, the fees are more likely to be in cents.

Next, you will choose your marketplace. To some extent, this decision will be made for you depending on the blockchain network you want to use. For example, the largest NFT marketplace, OpenSea, supports NFTs that live on the Ethereum, Klatyn, Polygon and Solana blockchains. If you want to use Binance Smart Chain, your options will include Binance NFT marketplace, Venly and Refinable.

Another popular NFT marketplace is Rarible, which allows you to use Ethereum, FlowFLOW2
, and Binance smart chains. As with anything related to NFTs, there are positives and negatives to each option, and it is often a matter of making trade-offs – choosing a more popular marketplace with a potentially larger audience but higher fees, versus choosing a less popular but cheaper marketplace, for example. Using Ethereum – while more expensive and (potentially) more polluting in terms of emissions – also means your customers have the option to pay with ETH, one of the most popular cryptocurrencies. Using other networks like Polygon or Tezos means customers may have to pay with their associated cryptocurrency tokens, of which there are simply fewer in circulation.

Once you have an idea of ​​the chain and marketplace you want to work with, you need to get hold of a wallet. While there are various options, an easy choice here is to simply use Metamask – which integrates well with many of the most popular NFT marketplaces, allowing you to transfer NFTs straight into your wallet. Math Wallet and Coinbase Wallet are other well-supported options.

One point to keep in mind if you’re into the technicalities is that, despite the name, wallets do not store your NFTs. The NFTs themselves are stored on blockchains that are stored in a distributed fashion on hundreds or thousands of computers around the world. Wallets simply store the private keys used to prove ownership of a particular NFT to the algorithms that keep all copies of the blockchains in sync.

After setting up your wallet – which is usually either a smartphone app or a browser extension – it’s usually just a simple matter of connecting it to the marketplace you want to use to sell or trade your NFT.

Now, with your wallet set up and connected to your chosen marketplace, it’s time to finally make that NFT.

Create your NFT

This is one of the easiest steps with no real tough decisions to make. The marketplaces all offer functionality that allows you to create your NFT by simply uploading the artwork (or whatever) you want the NFT to represent and linking to it. This is very easy, and the marketplaces, like OpenSea, walk you through the process of creating and adding required and optional metadata. You can set some information to be visible only to the buyer of the NFT (useful if you are creating objects for a game or a code to redeem if the NFT is tied to a physical object that the buyer can obtain).

Unfortunately, this is where things start to cost money. With NFTs, fees are incurred every time changes are written to the blockchain, and minting your NFT is probably where this will start to happen. As mentioned above, minting on the Ethereum blockchain is the most expensive of the options available, but you will have a larger pool of potential buyers and be able to accept payment in ETH, the second most popular cryptocurrency (after BitcoinBTC
).

However, there are a couple of ways around these fees. First, and most obviously – use a blockchain and marketplace combination that does not involve fees. A popular option here is to mint the Polygon blockchain (a relatively eco-friendly blockchain that uses proof-of-stake) using the OpenSea marketplace. At the time of writing, this combination can be done without incurring any fees.

However, if you have your heart set on the super-popular Ethereum blockchain, you may want to investigate the “lazy coining” options offered on some markets, including OpenSea and Rarible. This allows you to create NFTs that aren’t actually distributed to the blockchain until someone buys them – then the minting fees are bundled with the selling fees.

Once created, the NFT should appear in your own wallet to show that it belongs to you and is ready to be traded.

Selling your NFT

So here’s the fun part, where you finally (and hopefully) see a reward for all your hard work. As you might have guessed from their name, the marketplaces are there, in addition to creating and minting your NFTs; you actually sell them.

Depending on which blockchain and marketplace you have chosen, you will have the option to sell either at a fixed price, through an auction or a bidding system. Bidding works much like an auction, but there’s no time limit—buyers simply bid what they’re willing to pay, and you, the seller, choose to accept or decline each bid.

This is the point where you can also enter options such as recurring royalties – meaning that you will be paid a percentage of any resale of the NFT, should the buyer decide to resell it at a later date.

So you are ready to become an instant millionaire. One small problem – so are thousands of other artists and creators, and right now the pool of buyers willing to spend enough to make it happen isn’t big enough to make everyone rich. If you’ve been keeping up with the news on the topic, you’re probably aware that the amount spent on NFTs is currently far lower than it was at the peak of the hype cycle, during 2021 – when million dollar plus sales. happened on a daily basis. This is not necessarily a sign that interest is waning. Many believe that while the initial wave of excitement was around art and speculative assets, the real value of the technology will be tied to the arrival of the metaverse and persistent digital worlds. If this is correct, it is likely that NFTs will continue to play a far greater role in our lives in the future.

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