Isn’t it crazy when you see someone buy a JPEG image for millions of dollars? Especially when you could find similar images on the internet and download it for free. Take a look at the rock here. Someone spent over $500,000 to own it!! The idea behind Non-Fungible Token (NFT) is to have creations like art and music uploaded and stored on a blockchain (which can be thought of as a decentralized database) with benefits in return like ownership credibility, non-fungibility and tradability.
Non-Fungible Token Explained
Let’s start with what Fungible and Non-Fungible mean. Fungible is anything that you can exchange or replace with another identical item. The exchanged items will have the same value. A dollar bill or a bitcoin you have is fungible. They are divisible and can be reproduced with no one being able claim their dollar bill is the original. Non-Fungible items are original/ unique and indivisible. Examples are deeds, domain names like google.com, airline tickets etc. Yes of course, you can make copies of a deed. But there is only one original and there is someone who owns the original which virtually makes it more valuable than the copies.
As covered in our previous blog, NFTs are unique items like art, collectibles, tokens and membership in digital form. Creators like musicians, authors, artists among others can upload their content in JPG, PNG, GIF and other file formats on a distributed public ledger like blockchain. Each NFT has a unique ID and metadata. All such relevant information of an item is further stored on the blockchain. The process of creating an NFT is called minting or tokenization for authenticity. You can mint/create on NFT marketplaces like OpenSea and NFTically. Once ‘minted’, your NFT can be traded on such marketplaces (that also act as secondary markets) with the capability to retain a certain % of royalty every time it changes hands. NFT minting/creation process over time has become very easy that you and I can do so in a few minutes today.
Pros of an NFT
- Easy to create, sell and use with little technical understanding
- Can easily be transferred to anyone in the world
- Ownership can be verified and authenticity can be maintained
- You can mint/create NFTs in such a way that you earn lifetime royalty
- There are no third parties involved here to facilitate or curate your creations so no third party fees
Cons of an NFT
- Investing in NFT collections is suitable for those who have high risk profile
- NFTs are typically illiquid in nature so it is not easy to find buyers or traders
- Technology is still new so mass adoption will take a while
Overview of Creating NFTs
As mentioned above, creating NFTs doesn’t require any coding skills. It’s all made easier with ‘drag-and-drop’ functionality enabled by today’s user-friendly database interface. You can choose any blockchain & NFT marketplace of your choice to mint a Non-Fungible token. Ethereum is the most popular blockchain ecosystem for NFTs, metaverse, DeFi and other web 3.0 utilities. However the high demand plus its self imposed scalability limit only makes Ethereum more expensive to use. Efforts to make it more scalable are in full swing. Hence we can expect the network will be more affordable and faster in the future that would compliment its popularity for the users.
In the meantime, many people foresaw this situation quite a while ago and helped launch standalone layer 1 blockchain networks that are affordable and faster to use. And these networks are actually giving Ethereum a run for its money. But Ethereum, through its truly innovative EVM/smart contracts layer, ably competes by hosting many scalable layer 2 blockchains that are built on its network. So users and investors retain all the advantages Ethereum would have initially wished for – massive reach and affordable (fee = gas in Ethereum terminology).
It is easy to find the NFT minting process online these days. And many of them involve paying some fee upfront. Some are affordable while others aren’t. Competition is not limited to blockchain networks. We now have several NFT trading marketplaces competing against each other to facilitate peer to peer transfer of digital assets with low or no costs upfront. Perhaps the most popular of them all is OpenSea where creators/users can mint NFTs on Ethereum blockchain or Polygon (layer 2 solution on Ethereum). Let’s now venture into how to create NFTs for free on OpenSea.
How to Create/Mint NFTs for Free
- Login to Opensea’s website and connect your account with one of the wallets below.
(Yes, a wallet is required to upload, mint, store and trade NFTs. They act as the single source of truth for you to authenticate access to your NFTs. OpenSea supports a variety of wallets that is compatible with Ethereum network. Remember most of these wallets can be used across various marketplaces that are EVM or Ethereum compatible. So it is recommended for you to research and choose one of them to use it across marketplaces to make it easier for you. Of course you are free to have multiple wallets. Metamask is a popular choice although I lean towards Fortmatic)
- Once you connect your wallet with the OpenSea account, head over to your collection page – https://opensea.io/collections
- Click on “create a collection”
- Add your collection logo, description, banner, social media links, category and set your creator earnings with a max of 10%
(So every time your creation is sold/transferred to a new user, you will get up to 10% of the sale amount in your wallet)
- Choose Polygon under the ‘blockchain’ section to mint your NFT gas free
- You could choose Ethereum as well and mint your creation ‘gas free’ on OpenSea. According to them, the collection manager allows creators to make NFTs without any upfront gas cost, as the NFT isn’t transferred on-chain until the first purchase or transfer is made. The fee is later “settled” on-chain by the buyer of the item
(If you want to keep it simple though, you can choose Polygon because they exist on Ethereum anyways and it may be even convenient for the buyers as they do not have to worry about gas fees while purchasing an item from you or anyone)
- Once you have created your collection, head over to the top right of the screen that says ‘Add Item’ which will take you to the page where you can upload your content and mint it on Polygon/Ethereum
- Upload your creation (Image/Gif/Video) and fill in the details like catchy item name and an engrossing description of the item you want to mint as NFT
- You’ll be now able to customize your NFT further. This includes placing it in an existing collection, or adding properties, levels, stats and even unlockable content
- If you are minting your creation on Polygon, you can also increase ‘Supply’ of your NFT to more than 1
(This technically means your item is semi-fungible now and can be owned by multiple wallets since they are copies of the original. But note, because they are copies, semi fungible tokens typically can’t be listed for auction and you won’t be able to lower their prices later on OpenSea. This can be a good option for musicians, gamers, event managers)
- Once you are done with the above steps, click ‘Create’
- Boom! You successfully minted your first NFT!
Your NFT can now be traded now for real money. You can list your NFT for sale on OpenSea itself. Once you find a buyer, you will receive the funds in your wallet.
How to Sell NFT
- Visit your NFT and click on ‘Sell’ in the top right corner
- You can now set your selling price, currency and view any potential fees associated with your sale. You can also schedule your sale in advance!
- Once you’ve confirmed your sale details, press ‘Complete listing’. You’ll be asked to complete your listing in another window
- Click Sign, and then your crypto wallet will prompt you to sign the transaction on your end
- Your authorization should be completed shortly
- Congratulations! Your NFT is listed!!
- Feel free to share/promote your NFT on your socials
NFT space has seen rapid growth in the era of digital assets. If I am not a creator, I can look forward to investing in NFTs – buy low and sell high to make profit. In fact, it is the investors who often make large amounts of money. The good news for creators is that they can earn a certain %, as decided by them when minting the NFT, as commission whenever it changes hands.
You could literally see investors purchase a NFT for under $10 and listing it for sale for thousands. Yes, that’s another beauty of NFT and the technology. Since NFTs typically live on open source and transparent blockchains, every NFT will display its historical transactions. As an investor, that also allows you to gauge the demand of a NFT.
NFTs are also finding relevance in blockchain games, especially play-to-earn games, as in-game collectibles. Creators can aim to sell collectibles, club memberships, profile pictures in the form of NFTs to their respective audiences besides investors. NFTs are also housed in metaverses like Decentraland and Sandbox sharing spaces with virtual real estates, shopping centers, fashion shows etc. NFTs may not be liquid enough for an average creator today but they look extremely promising for the future. So learning more about them and staying up to date with Web 3.0 in general makes a good investment for the future.
What is Layer 1 Blockchain | TVL Blockchain | How Lisk Works | EVM Virtual Machines and EVM Chains | Solidity Data Types | Slope Wallet Vulnerability | What is a Blockchain Fork | Types of Decentralization in Blockchain | Physical Layer in OSI Model | What is a Crypto Exchange | What is a Blockchain Platform | NFT Risks and Challenges | What is a Cross-Chain Bridge | What is a Mainnet | Types of Sharded Blockchain | List of Wrapped Tokens | Quantum Computers and Cryptography | Crypto Faucet Apps | Cryptocurrency Business Model | EVM Wallet Address
Opinions expressed in this publication are those of the author(s). They do not necessarily purport to reflect the opinions or views of Shardeum Foundation.
About the Author(s):
Siddesh is a Computer Science student & freelance web developer who believes in the future of Web 3.0. He loves to contribute to the growth of Web 3.0 by creating content on finance & cryptocurrencies. You can check more on his Web 3.0 focused content here.
Subbu is a fintech blogger @ his website livingstable.com. Through his contents, he seeks to guide people to utilize financial resources online and realize the power they have on their fingertips. Follow him on LinkedIn and Twitter