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Table of Contents Show
- What is NFT?
- How NFTs are created
- What are the ways to create NFTs?
- Own smart contracts are mainly created by large projects
- NFT marketplaces
- STEP #1: Choose the type of marketplace.
- STEP #2: Create a cryptocurrency wallet
- STEP #3: Top up your cryptocurrency wallet
- STEP #4: Register on the marketplace
- STEP #5: Create a collection and the NFT itself
- STEP #6: Choose a sales mechanism
- STEP #7: Promote NFTs
- STEP #8: Complete the transaction.
- STEP #9: Withdraw money
- Is it worth to enter the NFT field?
- Related posts:
Making a livelihood from their art is possible for artists, and one avenue for achieving this is through the NFT sphere. By utilizing this technology, artists can sell their digital works to buyers across the globe without the need for shipping. In this regard, I will delve into the NFT sphere and also offer insights based on my personal experience regarding the where and how of selling NFT artworks.
What is NFT?
The term NFT stands for non-fungible token, which means a token that is unique and cannot be replaced by any other. Essentially, a token is a piece of information linked to a digital asset, such as an image, that contains data about its creator, value, and all previous and current owners.
This data is stored on a blockchain, which acts as a decentralized virtual registry. As the blockchain is decentralized, its components are stored in various locations without a central control center. This ensures that the information contained within a token cannot be modified, only added to. Therefore, any changes in ownership or price are automatically reflected in the token.
Meanwhile, the digital file for the object, such as a painting, is kept in a decentralized cloud service and linked to the token through a code.
In essence, an NFT is a digital certificate that validates your ownership of a unique digital asset. It allows you to register the original of such an asset and sell it to others. Furthermore, NFTs do not have an expiry date and will continue to exist as long as the internet is functioning.
How NFTs are created
NFTs are generated on blockchain networks, and there are several of them available. However, the most widely used network for NFT artists is Ethereum, and therefore, I will use it as an example in my discussion about tokens.
Each blockchain network has its own cryptocurrency, and in the case of Ethereum, it is called Ethereum (ETH). When it comes to buying or selling NFTs, you can only transact using the cryptocurrency of the specific network where the token was created. For instance, if you create an NFT on Ethereum, you can only sell it for ETH. Nonetheless, it is essential to note that cryptocurrencies are highly volatile and require careful attention, so it is critical to research thoroughly before investing.
Creating an NFT involves deploying a digital algorithm that writes the token’s properties onto the blockchain and defines its permissible actions, such as selling. This algorithm is commonly referred to as a smart contract, which is similar to a transaction agreement. The first transaction on the contract in the blockchain network is registering the contract, which is the moment of creating the NFT.
What are the ways to create NFTs?
It is possible to write a smart contract for creating NFTs independently, but this is a task that requires the expertise of a programmer. Therefore, for most people, it is advisable to use ready-made solutions provided by NFT marketplaces, which are platforms where NFTs are traded. The following are the reasons why this is recommended.
Own smart contracts are mainly created by large projects
Typically, large projects create their own smart contracts since they have teams of artists, programmers, and marketing specialists working together.
For individual artists, particularly beginners, it can be challenging to create a smart contract since it requires specialized technical knowledge. Additionally, in order to sell their artwork, they will need to establish their own website, invest in advertising, and put in a lot of effort to earn the trust of collectors. Not everyone will risk linking their cryptocurrency wallet to an unknown website to buy something. It’s comparable to bank cards, where people are cautious about entering their information into unknown sites.
Of course, creating one’s smart contract has its benefits: complete control over the process of creating and selling NFTs and the avoidance of paying a percentage of the profits to a third party. However, the challenges that come with it may not be worth it.
NFT marketplaces provide pre-made smart contract solutions that require no specialized knowledge to create, and some platforms even advertise their creators. More significantly, collectors trust these marketplaces and are always on the lookout for new releases that are published there. In other words, it is easier to find buyers on a marketplace.
The downside of using marketplaces is that they charge a commission fee of up to 15% of the sales amount. Additionally, your work will likely be tied to a single marketplace and cannot be transferred to another.
However, for beginners, the benefits of using marketplaces outweigh the drawbacks. Thus, I will now outline step-by-step how to sell NFTs using these marketplaces.
STEP #1: Choose the type of marketplace.
I categorize NFT marketplaces into two distinct groups: open and curated.
Open marketplaces are accessible to all, allowing anyone to create and list their NFTs, often without any fees. Opensea and Rarible are some of the most popular open marketplaces, and I suggest them to those who are new to the NFT world.
However, the sheer number of tokens listed on open marketplaces can make it difficult for your NFT to stand out, reducing the likelihood of an immediate sale. You’ll need to promote your NFT through personal channels, such as social media, to increase visibility.
Curated marketplaces are labeled as such because artists must undergo a selection process by the curators. For certain platforms like Foundation, gaining entry requires an invitation from other artists who have previously sold something on the marketplace. Consequently, curated marketplaces are home to many world-renowned artists, and although they have fewer exhibited artworks, their quality and prices are higher.
Each curated platform has a specific niche, which allows you to display your art directly to your target audience. For example, Superrare positions itself as a marketplace for the highest quality works, which start at 2 ETH. It features works by top authors, but it’s difficult to pass the selection process to get on the platform.
On the other hand, Knownorigin and Makersplace have lower prices, but they also prioritize high art. KnownOrigin is an unofficial leader in 2D art and is actively developing the NFT module. The entry threshold for both platforms is not as high as it is for Superrare.
Although Foundation has recently experienced significant growth, low-quality content has also emerged on the platform. However, the advantage of the marketplace is that an auction with your artwork can make it to the front page of the site, attracting numerous collectors.
Overall, it’s worthwhile to start with open platforms while also applying for curated marketplaces. For instance, to receive an invitation to Foundation, I participated in Twitter competitions with the hashtag #FNDinvites.
Nevertheless, before registering on any marketplace, it’s essential to create a cryptocurrency wallet at a minimum.
STEP #2: Create a cryptocurrency wallet
In the realm of cryptocurrency, a wallet serves as both a primary document and storage. Your wallet will be linked to all your marketplace accounts. In my view, the most user-friendly wallet for working with NFT on Ethereum is Metamask. To utilize it, you must install the extension on your browser or download the app on your smartphone.
Creating the wallet itself takes only a few clicks. It’s crucial to remember your password and write down and store your seed phrase securely. This phrase is required to access your wallet from another device or if you switch browsers, and there is no other way to do it.
STEP #3: Top up your cryptocurrency wallet
In order to perform any action on the Ethereum blockchain, a fee known as gas needs to be paid to miners who maintain the network. This fee is applicable for activities like creating NFTs, selling them, changing their prices, or transferring cryptocurrency between wallets. The cost of gas varies and is determined by the network’s current load. Websites like Gwei.at can be used to track the current price. Generally, the cost of gas ranges from 0.005 to 0.03 ETH, but it’s possible to choose a time when the price is lower.
However, the Rarible marketplace is an exception where users can create and submit their work for free, and the gas fee is only deducted at the time of the sale, which may even be paid by the collector. To create an NFT on Ethereum, it’s recommended to keep at least 0.05 ETH in your wallet, which will cover the cost of minting and listing the token.
Cryptocurrency can be purchased and added to your wallet through exchanges or exchangers, but it’s important to be cautious of fraudulent exchangers. If using an exchange, be aware that a gas fee will also be charged for transferring cryptocurrency from the exchange to the wallet, and this fee is subject to the network’s current congestion. It’s advisable to check reviews before using a cryptocurrency exchange to avoid scams.
STEP #4: Register on the marketplace
In order to create an account on a marketplace, you are required to log in through a cryptocurrency wallet, similar to how you access a healthcare portal through a government services account. Additionally, signing in through a browser extension or wallet application is mandatory before entering your account details.
Typically, personal accounts on all marketplaces have a similar format, where you have to provide standard information about yourself, including your personal details, a brief bio, and links to your social media accounts. For the sake of clarity, I will be discussing the marketplaces using Opensea as an example.
STEP #5: Create a collection and the NFT itself
On certain platforms, like Opensea, NFTs must be part of a collection before they can be listed for sale. To get started, navigate to the “My collections” section and select the “Create a collection” button. From there, you’ll need to upload a logo and cover image, provide a name and brief description for the collection, and include links to your social media and website.
The collection form also allows you to set the percentage of royalties you’ll receive when your work is resold. On Opensea, the maximum royalty rate is 10%.
You’ll also need to select a blockchain network for your collection. Opensea offers two options: Ethereum and Polygon. While Polygon is free and doesn’t require gas fees, it is generally considered less secure and associated with lower-quality content. Therefore, it’s not recommended for selling serious works. To create a collection on Opensea using Ethereum, you’ll need to pay gas fees, but once your collection is set up, creating and listing NFTs is free.
Once your collection is ready, you can create a token for your product by clicking the “Create” button on the main menu and filling out a form similar to the one used for creating the collection. You’ll need to select the collection where the new NFT will be added and click the “Create” button to finalize the process. Afterward, your new token will be available for sale.
STEP #6: Choose a sales mechanism
Experienced artists may choose to sell their works without showcasing them for sale publicly, such as by making a prearranged agreement with a specific collector. However, for beginners, displaying their works for sale publicly for some time is typically necessary. There are three primary methods for selling NFTs:
- “Buy now” option: NFTs are sold for a fixed price set by the artist.
- Auction option: NFTs are sold through an auction that usually lasts 24 hours after the first bid, or until a specific date on Opensea.
- Price offered by buyer option: NFTs are sold at a price offered by the buyer, which can be either accepted or ignored by the artist.
The marketing strategy and platform are critical factors in selecting a selling mechanism for NFTs. For instance, if an artist’s work has garnered substantial attention on social media, an auction is a viable option, and it can also be useful for selling on a curated platform since auctions tend to be displayed prominently on such sites. This can attract collectors who may be willing to offer a higher price.
However, it’s essential to note that auction starting bids are often lower than the anticipated final price. To that end, on platforms like Foundation, an artist can specify both a minimum bid for an auction and a “Buy Now” price like eBay.
If there is no sizable audience, and an NFT is listed on an open platform, it is best to set a fixed price.
Regardless of the selling mechanism, it’s crucial to evaluate the artwork accurately. Overpriced pieces will likely deter potential buyers if the artist is still establishing themselves, while undervalued artwork can undermine the effort put into creating the NFT.
Typically, the NFTs created by novice authors cost between 0.1-0.3 ETH. If an artist successfully sells multiple works, they can increase their prices. Established authors who regularly sell their NFTs can command several ETH for their work, while popular artists may sell their pieces for hundreds of ETH.
STEP #7: Promote NFTs
To sell NFTs successfully, it takes more than just listing your work for sale. You must establish your personal brand and create a community around your artwork to increase your chances of success. Typically, social media platforms are used to achieve this.
Twitter is the primary platform used by artists to promote their NFTs. It provides a direct communication channel between artists and collectors, allowing them to converse, participate in audio conferences, and discuss their creative practice.
YouTube and Clubhouse have a lot of NFT enthusiasts, and you can also join NFT communities on Discord through marketplaces. There are dedicated chat threads where artists can promote and discuss their work.
Participating in international contests and grants can also be beneficial. For instance, I once won a grant from Playboy, and the magazine invited me to participate in a space on Twitter. During the event, I talked about my work, and it was bought immediately after the first discussion.
Many artists promote their work before releasing it as an NFT. They share the creation process and fragments and announce the release date. As a result, NFTs by well-known artists can sell out within the first few hours.
Be cautious of fraudsters who impersonate collectors. They often use a scam in which they ask you to create an NFT order and provide a link that supposedly contains technical details or references. However, if you open the link, it downloads a virus that can compromise your wallet. So, do not open any links from unknown individuals. Also, keep in mind that even the accounts of people you know can be hacked.
STEP #8: Complete the transaction.
Collectors have different preferences and strategies when it comes to purchasing art. Some may choose to communicate with the artist directly before making a purchase, while others may participate in auctions and promote their acquisitions on social media. Additionally, some collectors prefer to remain anonymous and purchase artwork without revealing their identity.
If a collector makes an offer on your artwork, you will receive an email notification, so it’s important to check your spam folder to ensure you don’t miss any important messages from marketplaces.
When artwork is sold through an auction, artists may inform their subscribers of the starting bid, which can attract the attention of other collectors and lead to a bidding war. In these situations, collectors may try to outbid each other in the final minutes of the auction.
Once the artwork is sold, the token will be transferred to the collector’s wallet, while the image of the artwork will still be present in the artist’s portfolio. However, the artist will no longer have control over the artwork. Instead, the collector will have the ability to sell, transfer, or dispose of the artwork as they see fit.
STEP #9: Withdraw money
Once the transaction is complete, the amount of cryptocurrency received for the sale will be credited to the wallet, with the marketplace commission deducted. This cryptocurrency can then be converted into fiat currency, such as dollars or euros.
The simplest way to convert cryptocurrency is through a crypto exchange. This involves comparing exchange rates on platforms like Bestchange and selecting an exchange with a favorable rate and positive reviews. Once the exchange has been chosen, the cryptocurrency can be transferred to the exchange’s specified wallet and gas fees paid.
Next, personal information and bank card details must be provided and the user should wait for the funds to be credited to their account. It is important to ensure that some cryptocurrency is left in the wallet for future NFT creation.
Is it worth to enter the NFT field?
In order to succeed in the NFT industry, artists must build their brand, just as they would in traditional art. This process takes time and requires consistent effort. However, by entering the NFT market, artists have immediate access to a growing international audience.
For this reason, I believe that any artist, photographer, or digital graphic designer whose work can be presented in digital form should consider exploring NFTs. This is especially true for those whose works are originally digital.
Even if an artist creates physical works, they can still utilize the NFT format to enhance their creations. For example, they could animate a static image or include hidden content. The key is to be original and to maximize the possibilities of the digital format, rather than simply selling scanned copies of traditional paintings.
Creating an NFT is not a difficult process. The main thing is to research the market and identify a suitable niche, considering what is being sold and for how much. However, it is important not to chase fleeting trends, but to develop a unique artistic direction.