If only artists like Andy Warhol and Jackson Pollock had been born 75 years into the future, their work would’ve fetched them a thousand times more riches than they got. They would’ve been empowered, emboldened and emphasized by NFTs — the current buzzword in the digital currencies and digital assets world.
Non-fungible tokens, as introduced in our previous blog, are tokens that can be used to represent ownership of digital assets — like art, songs, videos, collectibles and more. These tokens, created, bought and sold on a Blockchain network, are unique and near-impossible to interchange or be replaced. But how can we buy and sell NFTs? What are the nitty gritties of minting NFTs? What happens when you sell a work on marketplaces? Find out the full drilldown on NFT minting from below.
Basics first: NFTs are mostly part of the Ethereum blockchain, which is a public distributed ledger that is practically unchangeable. Although this blockchain mostly lives and breathes for its cryptocurrency Ethereum, it also supports NFTs by storing extra information about digital assets. Just like how ether coins are minted and added into circulation, digital art, music and other NFTs are ‘tokenized’ (read: minted and added to the blockchain). Basically the process of representing them as NFTs so that they can be bought, sold, resold, collected and tracked is called NFT minting.
NFTs act as a secure and immutable digital representation of an artwork, music or collectible. They also ensure that the artwork can be traded in the marketplace. By enabling a tracking system for ownership, NFTs on popular blockchains allow flexible recording of sale, resale and collection of the artwork. Booming at $250 million at the end of 2020, the NFT market is gathering the waves for a digital tsunami that is touted to profit investors and artists alike.
Minting NFTs always starts with the creation of an artwork, music record, JPEG/GIF, or digital collectible. Through observation of market trends and research of NFT marketplaces, it becomes easy to find the right genre of digital asset to create. Currently there is a plethora of themes like modern art, abstract, political, pixel art, algorithmic art, 3D illustrations, digital photography and many more for creators to choose from.
It is quite unbelievable what kind of buyers hover around in the NFT space; Daniel Maegaard, a New Zealander who previously smashed $1 million through cryptocurrencies, had bought “Punk #6487” (a pixelated digital face on a blue-gray background) for an equivalent of $20,000 in May 2020. People around him called it a silly purchase, then swallowed their words when he sold the art in February 2021 for 550 Ethers (about $1 million).
Step two — buy cryptocurrency! Ethereum is the most widely used platform for NFT trading so that would mean buying Ether coins should be next on the checklist. They can be purchased from any popular cryptocurrency exchanges like Coinbase, Binance or CoinDCX. To mint a piece of digital artwork, it can cost around $70–100 depending on the platform. Once it sells, there will be a ‘ gas fee’, that can vary based on the demand and number of transactions on the blockchain. To ensure enough funds to pay this gas fee, you’ll need some Ether coins.
Wallets are the bank vaults for cryptos, and possibly the make-or-break component of the blockchain system. As a rule of thumb, you would need a wallet to access the platform, manage the balance and sign off on any transactions — be it crypto exchange or NFT minting. On-chain platforms eliminate the need for storing the account details of users, securing the platform thoroughly. There’s two parts to every wallet — a public address and a private key. A public address is like the mailbox outside your house where letters can be dropped off, and a private key is the mailbox key that’s used to open and take the letters out.
A variation of traditional crypto wallets, non-custodial wallets allows you complete control of funds in your wallet and lets you access the “seed phrase”. This is a randomly generated 12-word combo that enables access across various platforms and backs up the wallet. Non-custodial wallets can greatly help drop your NFT minting costs as they wipe out the third party between you and your crypto, and are turned off when not used. Coinbase, ZenGo and Metamask are popular non-custodial wallets that can serve your NFT minting ventures.
The quintessential part of NFT minting is selection of the right marketplace. Choosing a specific digital market to sell depends on multiple factors, but mostly it’s about ease of use, inclusivity, royalties offered, accessibility and popularity. It’s also possible to mint and NFT in one marketplace and sell it in another. The most used marketplaces are OpenSea and Rarible, but let’s take peek into some of the A-listed ones:
Most NFT marketplaces have made it quite simple to mint NFTs. Let’s take OpenSea for example: on the platform, there would be a ‘Create’ button that prompts you to sign in to your Metamask wallet. You will be asked to digitally sign a message on your wallet to confirm ownership of the address. Once your wallet is connected and you confirm your selection, you get into your OpenSea dashboard. Click on ‘Create’ on the ‘My Collections’ page and then upload a high-resolution file of your artwork. Give it a name, description and external links if any and proceed to create. And that’s it!
Creation of an NFT ensures that you are the rightful owner of that asset — this information is recorded on the blockchain and acts as public proof of the asset’s creation details. When a buyer is interested in going ahead with its purchase, she offers you a bid through the marketplace (subject to the rules of that individual platform). At this point, you could accept the bid or wait for other bids to come in, just so that you don’t miss out on a big-ticket value. When you accept the bid, the trade will be registered on the blockchain and ownership of the NFT will be transferred to the buyer. Of course, the identity of the new owner and details of the transaction are logged in as well. Whatever crypto you’ve made on that transaction can be converted into fiat money through crypto exchanges. What’s next if you’ve made a couple of thousands of dollars? A trip to Europe, of course!
It can seem daunting at first, but once you get used to the specific NFT blockchain and marketplace, it’s really a cakewalk to create, buy and sell NFTs. Just be aware of all the prerequisites, terms and conditions of the platforms before getting into the space. In parallel, it’s imperative to do plenty of research and talk about minting costs, environmental impact and gas money involved in trading NFTs. The NFT space is on a continuous upward trend and digital buffs would be at a loss if they don’t cash in on the opportunity now.
AI-Enhanced Safety Feature (SCOUR) An AI agent that acts as a watchdog to flag the spoofing transactions that manipulates both volume and price of the assets in the NFT ecosystem.
Digital Asset Forgery Detection System (Crunch Davinci) An AI model that flags forgeries, copycats and bootleg digital art contents thereby protecting the artists and their creations.
Fair Price value estimation for an Asset(Liquify) A fair value estimation & analytics for Digital Assets (NFTs) using AI to empower the community to embrace and value their assets in real-time.