The popularity of digital art is growing, and well-known artists are increasingly getting involved in selling NFTs. If you are an expert, you won’t find anything new in this material. However, if you don’t understand how NFT works, this article can become a starting point for you.
What is NFT?
NFT (non-fungible tokens) is a virtual digital unit in a blockchain network. It is essentially a digital certificate that confirms ownership of a digital asset: an image, a gif, a video or audio.
By purchasing a token, you secure the right of ownership. You could buy artifacts before NFT, but there was no record that you were the sole owner. Now, the information and transaction history is openly stored on blockchain platforms. No one can sell your digital artifact, not even its creator, but the code of the token will show information about the creator of the NFT.
The law in all countries does not yet regulate ownership of digital artifacts. So now buyers get the right to dispose of the token, but the authorship still remains with the creator. The terms of purchase of expensive assets may differ if the buyer and seller agree.
Even after the sale, the NFT-object remains on the Internet: anyone can download it, print it out, and hang it on the wall, but you own the original.
What they sell and how much it costs
Non-fungible tokens began to be actively used in 2017. Then developers at Larva Labs studio created pixel cryptopunks, which are now selling for tens of thousands and sometimes millions of dollars.
NFTs fall into several main categories:
Art: pictures, images, gifs, photos;
Sports: cards, auto parts;
Finance: options, insurance;
Games: characters, cards;
Words and tags;
NFT gives well-known and lesser-known artists, illustrators and developers a chance to make money from their art without having to participate in offline exhibitions. Although, digital art has attracted the attention of well-known auction houses.
In February, Christie’s held the largest transaction for the sale of crypto-art. A collage of five thousand works of the artist Mike Winkelmann, known as Beeple, has been sold for a record 69 million dollars. The buyer has received a digital file and “vague rights.” It is not clear whether the buyer of the artwork will be able to fully dispose of the images.
Shortly before that the creator of the popular Nyan Cat got 590 thousand dollars for it. Russian artist Pokras Lampas sold a projection of a canvas on the Chirkei hydroelectric power plant for $28,000.
Of course, not all NFT-objects can be sold for thousands and millions of dollars — it all depends on the value and rarity of the work, as well as the fame of the creators. For instance, Beeple’s Instagram account is followed by 2 million people.
NFT objects’ prices are either fixed by the owner or set at auction directly on the platform starting at tens of dollars, but often valuable images by not-so-popular authors sell for several thousand dollars.
Who needs it and why
Digital artists now sell works without intermediaries, blockchain platforms earn on transactions, and buyers earn on profitable resales.
Another motive for buying NFT objects is the desire to solely own something of value and to be part of the mass movement. Yes, the Nyan Cat gif can still be downloaded online. But famous paintings also have thousands of physical and digital copies, though collectors continue to buy them for millions of dollars.
Where can you buy and sell it?
You can sell and buy NFT objects on blockchain platforms — those are many. Some operate as marketplaces with multiple categories, while others specialize in art or games, for instance. Popular sites include OpenSea, Niftygateway, and Rarible. There are “closed” platforms on which you can trade only after confirming your profile, such as Async Art and SuperRare.
How to create your NFT
Digital artifacts are sold in “ethers,” the “coins” of the Ethereum cryptocurrency. To dispose of “ethers”, you need to create an electronic wallet, for example, MetaMask or Ledger. Then you need to synchronize it with a blockchain platform that suits your theme.
Placing your NFT tokens on blockchain platforms is chargeable. In order to publish a token, there must be money in your e-wallet. It is hard to predict how much exactly, as it differs depending on the time of the day.
Below you find an example of one of the most popular platforms, OpenSea
Create a collection for tokens in the “My collections” section, click on “Create”. Select the desired image, video or audio on your computer, add a title and a description, if necessary.
Once the collection is created, you can add a token by clicking the “Add new item”. Select the NFT object, add the name, description and number of tokens to be issued. Once created, the token can be sold by clicking “Sell”. In this section, select the method of sale — at a fixed cost or auction, and set the price in pounds or “ethers”.
After setting the price, click on “Post your listing” to send the token for sale. At this point, the platform should debit the publication fee from your wallet.
It makes sense to sell tokens if they exceed the value of the commission. After the publication, the NFT-object will be verified, and then it can be bought by users of the platform. The money from the sale will also come to the e-wallet.
To buy a token, you must decide on the type of NFT you need and choose the right platform. Popular marketplaces use “ethers” to buy, so you will need to top up your wallet with this cryptocurrency. On some platforms, tokens can be purchased using, for example, cryptocurrency USDS or DAI.
After topping up your wallet, you can either buy NFT at a fixed cost by simply clicking the “Buy now”, or you can make your own bid at the auction. If there is no higher bid than yours, the money for the token and the commission will automatically be deducted from your account, then the token becomes yours. Once purchased, the token goes into your wallet, such as Trust Wallet. There the tokens can be viewed and managed.
If you would like to learn about something related to the NFT, write in the comments.