In recent years the popularity of NFTs (Non-Fungible Tokens) skyrocketed. And this has made the situation more crazier that it seems.
People are paying million dollars for monkey images and animated gifs. “What the hell is happening?” You might scream.
All this havoc is caused by NFTs. And today, you’re going to learn the NFT meaning — what it is and how you can create one.
Let’s roll.
NFTs in layman’s terms…
An NFT (Non-Fungible Token) is a digital asset representing real-world items such as music, videos, photos, digital art, drawing, characters, artworks, games, domain names, and even land.
In economics, one can easily exchange fungible assets with money. In case of money, for instance, you can give a £15 note and receive a McDonald’s burger. It’s happening because you’re agreeing on the value of the burger to be exactly £15 with McD.
But, this is not possible in the case of a non-fungible item. “Non-fungible” implies that it has unique properties and can’t be replaced.
One more example is that bitcoins are fungible – you can exchange it with one another, and you will receive exactly the same thing.
On the other hand, trading cards are non-fungible. If you exchange it for another card, you’ll get something different.
Where Bitcoin was heralded as the digital replacement of currencies, NFTs are today popularized as the digital replacement of collectibles.
Like other collectibles like paintings or vintage action figures, you pay for a file and documentation proving you have the original copy rather than purchasing the physical object. Let’s go deeper into the NFT meaning.
Then why are they so freaking expensive?
Would you believe this simple jpeg image file was sold for over $23 million on February 12, 2022?
A few years ago, you would have laughed if somebody had told you that a digital piece of artwork would cost millions of dollars one day.
Jesse Schwarz had the money to purchase a Lamborghini. He had the chance to make a successful bid for Jimi Hendrix's guitar. He may have cleared his mortgage.
But on a recent Monday morning, the 32-year-old businessman went online to NBA Top Shot and, along with a few buddies, dropped $208,000 on a video of a LeBron James dunk.
Schwarz does not receive a physical copy of the video or even its broadcast rights. A few lines of code he possesses prove that he is the owner of a special digital asset.
Don't go believing you have cracked the system and turn rich by right-clicking and saving this image.
That is just what an NFT is not.
This image is just a copy of the original one. You cannot consider this an NFT since it doesn’t contain the information that makes it a part of the blockchain and identifies it as the original.
You may copy a digital file as often as required, including the artwork with an NFT. However, an NFT is made to grant you something that can never be copied: ownership.
To put it in simple terms – anybody can buy a Monet print. But the original painting can only be owned by a single person.
Is it profitable to make NFTs?
People buy NFTs for several reasons. Those who wish to collect and sell them as assets see non-fungible tokens as investments.
Others who know the NFT meaning simply like the innovation or technology of NFTs and enjoy exploring the applications they might be used for.
NFTs are rapidly being considered as a way to market goods, collect funds, and offer a voice to underrepresented people.
Gen-X and Gen-Z appear to be the next significant groups purchasing NFTs, closely followed by Millennials. Older generations are mostly not interested in NFTs. In addition, growing linear art and business groups are investing in NFTs and displaying them in lobby spaces of hotels and offices.
If you want to profit from NFTs, there are many ways to do so. Here are a few examples:
- Play-to-Earn games: You can buy the items you unlock or earn in these new types of games. These NFTs are collectible, and one can buy them in-game or online.
- Collecting: Many people acquire NFTs, keeping an eye out for new projects and waiting until their values rise (they can also decrease).
- Flipping NFTs: While we wouldn't advise, some people like purchasing NFTs to resell them for a profit. It carries risk.
- Investing in new NFTs: Find projects you enjoy and apply early if you're serious about going into NFTs. It is often possible to get on the “whitelist” if you participate in the Discord community.
The values of an NFT may fluctuate, and not every NFT venture is intended to give you profit (some are created to raise money for charity, for example).
Additionally, just because the artwork has been tokenized does not guarantee that it will be valuable.
Is it possible to create & sell NFTs?
Creating an NFT is not tricky as it means once you understand the NFT meaning.
Selling an NFT could initially appear to be exceedingly challenging. Even though there are several factors to consider, the process itself is not that hard after you do your research.
Remember to look into your options for platforms, auction settings, and payment-related concerns like fees and gateways.
When you've covered all the bases, you're ready to sell some gorgeous NFTs.
Make a crypto wallet
To create your NFTs, sell them on an NFT marketplace and fund your initial investment, you must have a cryptocurrency wallet. Through the wallet, you can access your digital assets. Among the well-known NFT wallets are Metamask, AlphaWallet, and Coinbase Wallet.
Once you have made your digital wallet, you must buy some coins. The majority of NFT platforms support Ether, the coin used by the Ethereum network. Link any cryptocurrency you already have in your possession from another source to your digital wallet. This way, you may use it to create and sell NFTs.
We use Metamask in this example because it's among the most popular and convenient wallets. There are also alternatives like Coinbase.
When creating an account, you will be shown a “seed phrase.” A twelve word combination which will act as your password in case you forget. The seed phrase is your security code, therefore, keep it private and do not disclose it anywhere.
Decide on the platform
There are many choices, including direct-to-consumer (D2C) platforms like Shopify and online marketplaces like OpenSea. The decision is typically based on the kind of NFT you're selling and the costs of trading the digital currency.
Although we are using Rarible for this example, all NFT marketplaces have the process.
After creating the account, linking your Metamask to your Rarible account (add a username, picture, bio, and such).
The transactions will be simple after linking. For instance, the NFTs will start to appear in your wallet (you'll need to enable this in Metamask's settings).
Add a banner image and links to your social networking pages. It’ll help you stand out in the NFT marketplace.
Your investment in fleshing out your profile will make you noticeable and hence your artwork.
Create your art
You can create your art using any software program you like — for instance Adobe Photoshop on computer systems or ProCreate on iPad.
The trick is to let your creativity flow wherever you feel the best. Then save your artwork as an image file, for example, jpeg.
An NFT can be any digital file — image, video, or gif. In this case, though, we’ve taken an example of an image.
After saving your artwork, as a jpeg,it’s time to upload it.
Upload your artwork and list your NFT
The marketplace gives clear instructions for posting your artwork. And the procedure is often the same for most marketplaces (some NFT marketplaces will verify your account, which may take a few days).
Here’s how it happens:
- Decide which blockchain you wish to mint your NFT on. You must now select a blockchain. Several options are available, including the most recent low-carbon cryptocurrency options Tezos, Flow, and Polygon. For this example, we use Ethereum to list our NFT at no cost.
- Select a single edition or numerous editions for your NFT.
- Upload your artwork. It may be an MP4, PNG, GIF, WEBP, or MP3 file. Do not exceed 100 MB in size.
- Pick a grouping for your NFTs. You can use the standard RARI collection (Rarible Singles) or create your own to make it simpler for fans to find your work. The collection is similar to a folder for your NFTs.
- Give your artwork a catchy title and an engaging description to encourage others to buy it.
- Choose between a fixed price, open auction, or timed auction for the selling type.
- Choose the royalties you desire to be paid on each secondary sale.
- Add optional unlockable content, such as hidden links, vector files, or other items.
- Activate Free Minting to avoid gas costs (if you want to).
Congratulations, your artwork is now listed on Rarible when you click “Create item” and use your wallet to sign the transactions.
Accept an offer
Keep a look out for offers from prospective purchasers after listing your NFT.
While most platforms will let you know if someone bids on your item, it's still a good idea to check in frequently to ensure you don't miss any requests.
It will be regarded as a public sale if you set a predetermined price and someone agrees to purchase your NFT. In this scenario, you'll receive notification that your digital asset has been sold and that cash or cryptocurrency has been credited to your account.
However, if it's an auction, you'll be notified of the various bids that are being made on your NFT.
Buyers may also send you private offers that suggest a specific price for your non-fungible token. It is advisable to exercise caution because offers may occasionally be lower than your minimum price (these offers are typically sent by bots or competitors looking to take advantage of the owner's error).
Promote
When you establish a community on Discord and offer buyers special perks, the impression of the rarity and scarcity of the NFT is heightened.
The NFT's practicality and potential resale value will capture them, heightening public perception through speculative interest.
To build anticipation for your impending NFTs, you can organize and participate in Discord activities.
Getting onto one of those special investing servers should be your ultimate goal, even though public servers are fantastic for promoting your NFTs. These are by invitation only, so you have to be a regular player on some public servers and make a few friends to get an invitation.
Final Thoughts
First things first. An NFT is for sure “legit,” but the phrase is so all-encompassing that you might get into swindles and schemes that are not.
Now that you are fully aware of NFT's meaning, we advise that you always do your research, never take free NFTs, and steer clear of offers that seem too good to be true.
If you are still unclear about what NFTs are or how they can be used, we certainly don't blame you.
