Non-fungible tokens or NFTs have been around since 2012. However, their popularity as crypto assets has skyrocketed over the last couple of years. If you’re someone who doesn’t have any clue about what NFTs are and how you can start creating and trading them, this post is for you.
image credit: Owned ‘Saints of Hashgraph’ NFT token (one of 100). Created and minted by Al Vo via GoMint.
What are NFTs?
Before we get to the creation and trading-related aspects of NFTs, it’s important to understand what they exactly are.
The origin of NFTs go back to the Bitcoin Colored Coins concept. The coins, which were a bitcoin’s fractions, would be market with information linking them to assets in the real world. Counterparty’s digital cards trend saw the greatest use of the Bitcoin Colored Coins for creating, buying and selling artwork.
The success of the ‘Rare Pepe’ art in particular led to new NFT standards being created. These standards were a blockchain building block set which facilitated developer-driven NFT creation.
Homer Pepe is the most expensive Rare Pepe NFT, sold at 205 ETH.
Photo credit: Rare Pepe Directory
At present, NFTs are typically used for representing the following types of intangible or real items:
- Virtual items like in-game weapons, virtual currency, skins and avatar
- Virtual land
- Digital trading cards and other collectibles
- Video footage
- Tokenized assets in the real-world (cars, designer sneakers, racehorses, real estate, etc.)
Creating your very own NFT art isn’t as daunting as it may seem to be at first, particularly if you’re new to the crypto industry. It’s relatively straightforward, with the only conundrum being which blockchain you should choose for issuing NFTs.
Blockchains have their unique NFT token standards as well. For example, you can only sell NFTs created on the Ethereum blockchain on platforms that support Ethereum assets. As the NFT ecosystem of Ethereum is the largest right now, we recommend starting your NFT creation on the Ethereum blockchain.
To get started, you’ll need the following:
- An Ethereum wallet with ERC-721 support. ERC-721 is the NFT token standard on Ethereum. Coinbase Wallet, MetaMask, and Trust Wallet are the most popular options.
- Ether (ETH) worth $50 – $100. If you use the Coinbase Wallet or exchanges like Binance, you can purchase ether with fiat currencies such as the British pound sterling and U.S. dollars. You can also buy the required Ether from a crypto exchange.
Next, use an NFT-centric platform like Mintable, OpenSea, or Rarible where you can create an NFT by uploading a file or image. Mintable, OpenSea, and Rarible are all Ethereum NFT marketplaces with similar interfaces. The ‘Create’ option’s top right corner location is the same across all three marketplaces. Once you’ve chosen the file or image, you can include attributes and special traits that will enhance the uniqueness and scarcity of the NFT.
Making NFTs on OpenSea is free. However, on other platforms, you’d have to shell out a fee known as ‘Ethereum gas’ or simply ‘gas’. Network congestion is what dictates how costly the gas is, i.e. if the number of people performing transactions on the network is high, you’ll have to pay more gas fees.
You can buy NFTs from one or more of the following NFT marketplaces:
- Nifty Gateway
- Axie Marketplace
- NFT ShowRoom
photo credit: Asep Onde / Makersplace
Buying scarce NFTs can be a tricky process as they are typically issued in the form of pack drops and art drops. These drops last only a few seconds, and you’ll have to be quick to purchase them. That’s why it’s important that you have everything needed on-hand by the time a drop happens.
Selling NFTs is also quite simple. Simply locate the ones you want to sell in your collection on an NFT marketplace and click ‘sell’ to finalize the pricing details. Apart from setting the price of the NFT, you can also define sale conditions, i.e. whether to sell the NFT at fixed price or run an auction.
photo credit: Asep Onde / OpenSea
For most of the NFTs you sell, you’ll be paid in the form of ERC-20 tokens like Ether. There are some platforms that are only compatible with their native blockchain tokens. For example, VIV3 is a marketplace built on the FLOW blockchain and it only accepts payments in the form of FLOW tokens.