A non-fungible token (NFT) is a blockchain- based tokenization of a collectible item or piece of art. NFTs certify digital ownership and authenticity, publicly stored on the blockchain for quick verification.
Popularized by the NBA, Mark Cuban and Logan Paul, NFTs have gone mainstream in the world of tokenizations. You don’t have to be a famous YouTuber or a billionaire to create your own NFT. Startups like Nifty Gateway, OpenSea and Rarible allow everyone to get in on the action.
The NFT gold rush has collectors wanting to join the next generation of collectibles early. Some NFTs achieve huge profit margins in the resale market after being sold out within seconds after being put online.
NFTs have changed the way art is conceived, and this is just the beginning.
If something is expendable, it is easily replaceable. Oil is fungible because any one barrel is just as good as the next, but a Mickey Mantle rookie card is not just any baseball card: it is either irreplaceable or non-expendable.
When tokenizing non-fungible assets, the important details of the asset are digitized with the token.
The tokens are kept in wallets, which also have their own unique addresses. Token IDs point to wallet addresses on the blockchain, which is a large publicly accessible database, so anyone can verify digital ownership.
This also means that the fake versions of the NFTs could never pass for the real ones.
How to create your own NFTs?
It is surprisingly easy to create your own NFTs.
OpenSea and Rarible are the main platforms for creating NFTs. While Rarible dominates in total sales, OpenSea offers more related services, and includes the ability to create your own NFT web store powered by the OpenSea exchange. Both platforms allow users to upload their art and create collections without the need for technical blockchain knowledge .
Before you start, you have to know that there will be some initial costs. NFTs work with blockchain . They usually do it with Ethereum . The use of blockchain has a cost, a network fee called gas , which you will have to pay to tokenize your art.
Rarible requires artists to mint their NFTs on the blockchain ( on-chain ) during creation. This means that the cost is lower if you operate on a recurring basis. If you are planning to sell a pair of NFTs at huge prices, Rarible is probably your best option. On the other hand, if you want to create a multitude of cheaper NFTs, you will want to use OpenSea’s Collection Manager.
OpenSea Collection Manager allows users to pay a one-time fee to establish a new collection. From that collection, an unlimited number of NFTs can be created and the centralized OpenSea team stores them off-chain until a sale is made. At that point, the buyer will pay the gas rate associated with the transaction, and your NFT will be placed on the chain and transferred.
This tutorial will cover the process step by step and includes everything you need to know to create your own NFTs in a collection in OpenSea.
Step 1: Configure MetaMask
The first thing you will have to do to create your own NFT is to set up a software wallet. This wallet can hold your NFTs and you will also need to use it to pay for blockchain gas fees later on.
Head over to metamask.io where you can download the app or add the extension for Chrome. Creating a MetaMask wallet is simple and free. Just remember to keep track of your passwords in case you ever need to retrieve the wallet.
Remember that wallets do not store cryptocurrencies or NFTs (they store your private key, which is necessary to authorize transactions). All cryptocurrencies and NFTs are stored on the blockchain with the wallet ID that designates the property.
Step 2: Tokenize your art
Once you have a MetaMask portfolio created, you can create your NFTs.
Go to opensea.io and click the Create button on the menu bar. Now you can connect your MetaMask wallet with OpenSea and get to work.
Create a name for your NFT collection, and then click the “add new item” button. Now you are ready to upload the file you want to tokenize and give it certain properties to distinguish it from the rest of your collection.
Determine how many copies you want of each item and set a retail price.
Step 3: Put on the market for sale
To sell your first NFT, you will need to enable OpenSea to sell items from your account. This requires a blockchain transaction, so you will have to pay a gas fee . Send some Ether to your MetaMask, and you are good to go. You will only have to pay this fee the first time you create an NFT collection.
If you don’t have Ethereum, you can use Coinbase or Gemini . If you are completely new to cryptocurrencies, you can check out our guide to buying Ethereum .
Once you’ve given OpenSea permission to sell your NFTs, anyone can find and buy them on the OpenSea Marketplace.
Other ways to benefit from NFTs
There are three main ways to make a profit with NFT, scalping or reselling and investing in the industry.
For most people, your best bet for capitalizing on the NFT bubble before it bursts would be to invest in a platform like Nifty Gateway, OpenSea, or Rarible. During the California Gold Rush, most miners left empty-handed, but those who sold the picks and shovels became incredibly wealthy.
If you are an artist or influencer, it may be worth creating your own NFTs for your fans. YouTuber and professional boxer Logan Paul made more than $ 5 million in a single day selling 3,000 NFTs at 1 Ether each. It is clear that the fear of missing out on the NFTs is at an all time high.
If you have a knack for predicting resale demand, buy yourself a Nifty Gateway bot from Upwork for $ 300 and start scalping .
NFTs can represent physical and digital objects. For example, the NBA is tokenizing clips of the biggest plays in basketball history and selling them for a fortune (plus they take 5% of all secondary market transactions) another benefit of NFTs for their creators.
There are 10,000 such cryptocurrencies, each uniquely identifiable and with an average sale price of $ 15,000. There are 9 aliens, 24 apes, 88 zombies, 3,840 women, and 6,039 men, each randomly generated with a unique set of attributes that also vary in rarity. Only 44 cryptopunks have the ” beanie ” attribute , which makes them instantly more valuable than one of the 332 that have virtual reality glasses.
The future of NFTs and tokenization
The blockchain is revolutionizing art and collectibles as we know them, but this is only the beginning. Tokenization is an incredibly powerful tool with hundreds of applications to discover.
NFTs seem to be here to stay. Which NFTs will stand the test of time and maintain their value is another question. Each NFT collection has its own value proposition, but at the end of the day, they are only worth exactly what someone is willing to pay.
Most of the NFTs that have been created will lose value over time. On the other hand, some will become more and more valuable and desired.
Maybe your NFT will become the next Mona Lisa. There is only one way to find out.