If you’ve spent any time on the internet in the past few years you will have almost certainly heard the terms ‘NFT’ and ‘cryptoart’. Despite some early reticence about NFTs (non-fungible tokens to give them their full name), there is now a very real – and very lucrative – market for them. So, if you’re intrigued by cryptoart and keen to find out how to make an NFT and sell it, this guide is for you.
What is an NFT?
Ok, let’s start with the basics. An NFT is a digital asset and type of cryptocurrency with a twist. ‘Fungible’ means something that can be exchanged like-for-like. ‘Traditional’ cryptocurrencies can be exchanged like-for-like with other tokens. An NFT, on the other hand, is a unique token that, while it can be exchanged, cannot be replaced like-for-like by any other token.
To put this into context, if you have $1000 in $20 notes and exchange it for £1000 in $10 notes, you essentially have the same thing - $1000 in cash (which makes it your round, by the way). If you choose to spend your $1000 in cash on a painting, you end up with a very different, one-of-a-kind asset. There may be photos or copies of the painting, but there can only ever be one original. The value of your original painting may fluctuate independently of the value of the currency with which you initially purchased it.
What makes an NFT different from standard crypto coins is that it stores data. That data could take the form of an image, video, piece of music, GIF, or anything else that can be stored digitally and makes that token unique.
So an NFT is a unique piece of digitally stored cryptocurrency that contains data which is deemed to have value.
How to make an NFT
Ok, so now you understand what an NFT is, let’s take a look at how to make one. In the same way that anyone can buy and sell cryptocurrency, anybody can create an NFT. In order to get started with making an NFT, you will need to have a crypto wallet that supports the appropriate NFT standard tokens.
Ethereum is currently the most popular NFT ecosystem, so let’s look at an example of how to create an NFT using it. In this instance, we’ll say you’re creating a GIF.
The only requirements to get you started with making an NFT are: An Ethereum wallet that supports ERC-721 (the Ethereum-based NFT token standard) Between $50-$100 in Ether
With those in place, you can head over to one of the NFT-centric platforms to connect your wallet and upload the file you want to use to create an NFT. In this example, we’ll stick to OpenSea as it’s the biggest Ethereum-based NFT marketplace.
From the OpenSea homepage, click on the blue button labeled ‘create’. You’ll be redirected to a page that will ask you to connect your wallet. You may have to provide a digital signature, but you will not be charged a fee.
So, your wallet is connected to OpenSea and your GIF file is stored on your device. Now, it’s time to find out how to create an NFT. On the OpenSea homepage, click on the wallet icon. You’ll be presented with a list of compatible wallet providers. Select your wallet provider and connect your wallet to sign in. Once your wallet is connected, hover over your profile picture and select ‘My Collections’ from the dropdown menu. From the ‘My Collections’ screen click on ‘Create’ You’ll need to add a logo for your collection. This IS NOT YOUR NFT. Your logo can be any image you like and you can change it later so there is no need to overthink it. From the same screen, you’ll need to give your collection a name and provide a description. Again, these can be changed later so you don’t need to stress over them. When you're happy with your logo, name and description, click ‘Create’ at the bottom of the screen and wait for a new screen that says ‘Your collection has been created’. From here, click the blue ‘Add items’ button. Then click ‘Add new item’ At this point you will receive a notification from your wallet. Click on ‘Sign’. This will not cost you anything. Once you sign, you’ll be taken to a screen that says ‘Name your NFT’. Enter the name of your NFT and write a description. You’ll also be able to add an external link to let people know more about your art, but this is optional. There are several options that allow you to add properties, levels and stats, add unlockable content or mark your NFT as containing explicit or sensitive content. Obviously, if you create an NFT that contains explicit or sensitive content you will have to mark it as such. As this is a beginners guide to NFTs, we won’t go into the other options here. Next, select the number of copies you want to list for sale and click on the blue ‘Create’ button. You have now created an NFT. Now you’ll need to list your NFT for sale. To begin listing your NFT click the ‘Sell’ button below it. You’ll be taken to another screen with another blues ‘Sell’ button, this time at the top of the page. Click on that ‘Sell’ button. You’ll then arrive at a new page that will ask you to choose whether to set a price for your NFT or put it up for auction. Once more, there are numerous other choices like creating bundles but those are for another time. For this example, we’ll assume you want to set a fixed price for your NFT. Once you have entered the price for your NFT, click on the blue button that says ‘Post Your Listing’. You’ll be sent to a new screen that will ask you to ‘Initialize your account first!’. This is where you will need to pay a ‘gas fee’ – that is a charge to compensate for the gas used to complete your transaction. Gas fees can be pretty steep but you will only have to pay it once to initialize your account. Future NFTs can be listed for free from the same account. To pay the fee click on the blue ‘Confirm’ button A new screen will pop up that says ‘Listing your item’ and prompts you to accept the signature request. You’ll then receive a signature request from your wallet. Click ‘Sign’. This will not cost you any extra money. When the ‘Listing Successful’ screen appears, you’ll be asked to provide a nickname -basically a username – and an email address. These are mandatory fields. When your listing sells, you’ll be informed by email so don’t be tempted to put in a random address that you never really use.
You have now created an NFT.
How much does it cost to create an NFT?
As you can see from the steps above, actually creating an NFT needn’t cost you anything other than time. You may already have digital works of art, videos or songs that you want to use to make an NFT and this is a straightforward process.
Of course, you will need to pay the one-off gas fee when you first initialize your account and you won’t know how much that is until you reach the initialization page. But remember, you won’t be charged anything unless you confirm it so you can always choose to back out if it’s too much. If you’re planning a whole bunch of listings, make sure you divide the gas fee by the number of items you plan to list for sale. What seems like a high gas fee for one NFT may not appear quite so galling if it is split 20 ways. And of course, you get to select the price of your NFT so you can factor the gas fee into that price.
There is the old adage that you need to speculate to accumulate and with the NFT market hitting $2.5bn in the first half of 2021
, it’s clear there is money to be made if you’re confident in the appeal of your art.
But what do you do if you want to get a piece of the NFT action but you’re not an artist, videographer or musician? Well, remember we said at the beginning that an NFT can be pretty much any kind of digitally stored data. The limits to which types of file you can use to create an NFT are really only bound by your imagination. The chances are that in four years’ time, files we don’t yet know about or wouldn’t think could be termed ‘art’ will be selling as NFTs.
If you have a great idea for an artwork but lack the skills to create it, you can find a freelancer to create the NFT for you. This will incur a cost that will need to be agreed upon between you and your selected freelance artist. Once you are satisfied with the work, simply follow the simple steps listed here to list your NFT.
How much time, effort and money you are prepared to invest in creating and listing an NFT is a personal choice. As with any other money-making scheme, it’s all about balancing risk and reward.
How to make money from NFTs
Making money from NFTs is similar to making money through traditional art.
As an artist, you make money simply by selling your pieces. As an investor, you make money by buying art that you think (or at least hope) will appreciate in value and selling it at a profit.
And then there are buyers that get lucky. You might buy an NFT just because you like it but see it’s value skyrocket if the NFT artist hits the big time. Suddenly, you become the proud owner of a very expensive piece of cryptoart and you can sell it at a huge profit.
The future of the NFT market is not crystal clear at this stage and other ways to make money from NFTs are sure to emerge. What is certain is that NFTs and cryptoart are here to stay.
Already, the gaming world is embracing NFTs with gamers able to earn NFTs as part of their gaming experience. This market is primed to take off over the coming years and, in the fast-paced digital world we now live in, other innovations will follow. Once again, the only real limitation is imagination.
If you’ve been following the rise of NFTs, you’re probably already aware that the most expensive NFT so far was a piece of art by Beeple that sold at Christie’s for $69.3m
Likewise, Twitter founder Jack Dorsey sold his first ever tweet as an NFT for $2.9m
Of course, these are not the norm, but there are plenty of examples of run-of-the-mill artists who have made big profits by creating and selling NFTs.
Digital artist Sarah Zucker started selling NFT artworks in 2019 and has seen her career blossom since the rise in demand for cryptoart. So far she has sold $274,000 worth of NFTs in 2021.
Chicago-based artist Kane used to create oil paintings but took up cryptoart in 2019. In the past two years, NFTs have become his main source of income and eclipsed the money he was able to make selling paintings. In September 2020, he sold an NFT for $100,000.
Earlier this year, a 12-year old boy from England made $160,000 when his NFT collection, Weird Whales became popular. And his income doesn’t stop there. Each time one of his creations is sold on, he’ll make 2.5% of the sales value in passive income.
The global-leading NFT investor Pransky, has earned $3.6m in profit from buying and selling NFTs.
The NFT market has exploded recently and the bubble doesn’t look like bursting anytime soon. If you want to get involved as an artist or investor, now is the time to dip your toe in the digital water. How you choose to make money from NFTs is up to you and will be determined by your level of artistic ability or entrepreneurial spirit. In either case, the rewards for creating and selling an NFT are potentially huge.