Whether you’re an artist or business, teasing the idea of diving into the world of non-fungible tokens (NFTs) has probably been brought up one time or another as the NFT craze of 2021 chugs on. And for many, just bringing up NFTs in a passing joke, or as a pipedream, or not looking into actual opportunities to pursue has been the extent of the NFT curiosity.
However, whether you’re a creator or company, the intimidation related to creating NFTs or utilizing blockchain to do so isn’t as warranted as you may think. Especially as more and more tools and resources become available.
Issuing an NFT starts with deciding which blockchain to use. Ethereum has been the leading blockchain NFT issuance service, but there are a few others that have been gaining popularity this year: EOS, Tron, Polkadot, Cosmos, and Tezos are a few examples.
Also, once you select which issuance to use, keep in mind that each blockchain has its own standards for NFTs. This could mean they each have their own wallet services or marketplace. For example, using Ethereum-based services would mean you could sell you’re NFT on OpenSea, Rarible, or Mintable (Ethereum’s NFT marketplaces), but potentially not others.
Continuing with the Ethereum (ETH) example, let’s say you choose Ethereum to mint (or issue) your own NFT. Tools like MetaMask, Coinbase Wallet, and Trust Wallet can help with the minting process and act as a wallet that supports ERC-721, which is the standard token for Ethereum-based NFTs. Whether the asset is a video, audio file, or artwork, around $50 to $100 should be enough to cover the minting process.
Next you would connect your “wallet” that’s housing your ETH to any NFT-centric platform (as mentioned before, there are plenty of options, but the main marketplaces for ETH-based NFTs are OpenSea, Rarible, and Mintable).
For OpenSea, the largest ETH-based marketplace, a button that says “create” in the top right corner of their website. Once you connect your wallet, you’ll also have to prove your wallet’s address by digitally verifying and signing a message. From there, you’ll see another “create” button that acts as a folder for the digital assets you’re minting.
Anyone can technically create work worth minting and put it up for sale on an NFT marketplace, however, hidden fees is where complications can play a role. Many marketplaces charge a “gas” fee for each sale that is made. This is the price for how much energy is consumed throughout the transaction’s lifecycle. You may have heard about people who “mine” for cryptocurrency, and this is how energy is consumed. The mining process is what verifies any transaction on the blockchain. A single Ethereum transaction, for example, uses up about 48.14 kWh of energy.
In many cases, especially if you’re not backed by a brand or don’t really have a following that can create immediate demand for your NFTs, fees will add up fairly quickly and possibly add up to more than the profits you’re able to make from selling and reselling your NFTs. So really researching which marketplaces would fit what you’re looking to do with NFTs and assessing the risk and cost is vital.
Not to mention, the hardware necessary to consistently make digital art, for example, is no cheap investment either.
There’s also the learning curve of understanding the general jargon barrier, different cryptocurrencies, and the volatility or market of each cryptocurrency. As mentioned before, it’s suggested to have $50-$100 in ETH to initially mint a digital asset, but that price can change quickly and needs to be monitored consistently.
Pinguino Kolb, an artist who has been acting as a guide for many other artists trying to get into NFTs this past year, has been holding seminars and also providing some reservations artists have to consider: “You can’t just make an NFT, release it into the wild, and automatically somebody is going to buy it. You have to promote it. You have to put the legwork into it. All that takes time.”
Kolb also mentions that you really need to become a part of the NFT community so you understand who your core audience really is. All of this market research and education, in addition to the actual creation of your NFTs and sustaining them, can be a lot to take on for just one person.
There are plenty of resources, from marketplaces and forums to online communities and seminars, and it’s extremely necessary to read up and learn so you’re not burned by the risks that can quickly add up.
And recent research found that most NFTs are selling for less than $100. When including the time, work, and “gas” fees, most NFTs probably are not turning a profit right now.
It’d be a cliché to call NFTs the next wild west on the internet, but the reality is not everyone has a screenshot of a Tweet or meme that can be sold for millions of dollars and many people can lose a lot of money without the right preparation.