Throughout 2021, Non-Fungible tokens (NFT) have been a cultural phenomenon, with celebrities dabbling in the space and resulting in absurdities, scams, and legal battles.
Non-fungible tokens, or NFTs, are digital tokens that are kept on the blockchain. Unlike cryptocurrencies, where each coin is identical (there’s no reason to favor one Bitcoin over another), each NFT is one-of-a-kind and can be sold to show ownership of a digital file.
According to NFT industry analysis, the market for non-fungible tokens had topped $40 billion in value as of the end of 2021. The combined value of the top ten NFTs was approximately $230 million as of December 18, 2021.
So let us take a look at how one can create their own NFT project.
Step 1: Create some art
Before you can make an NFT, you have to create a piece of art you can sell. The term “art” can be very loosely used when talking about NFTs. There is an inclination towards digital art.
Making your own NFT, whether it’s a GIF or an image, is a reasonably simple procedure that doesn’t necessitate extensive crypto understanding. NFT art can also be utilized to make collectibles such as digital trading card sets.
Each blockchain has its own NFT token standard, as well as wallet services and marketplaces that are compatible with it. If you make NFTs on the Binance Smart Chain, for example, you can only sell them on sites that accept Binance Smart Chain assets. This means you wouldn’t be able to sell them on a marketplace like VIV3, which is built on the Flow blockchain, or OpenSea, which is based on the Ethereum blockchain.
Step 2: Create a wallet
Because Ethereum has the greatest NFT ecosystem, you’ll need to follow a few steps to create your own NFT artwork, music, or video on the Ethereum blockchain.
You’ll need an Ethereum wallet like MetaMask, Trust Wallet, or Coinbase Wallet that supports ERC-721 (the Ethereum-based NFT token standard), as well as some Ether (ETH) for the processing fee, or gas fee.
Next is to mint or create the NFT itself. The steps below show how the process works on OpenSea, currently the largest Ethereum-based NFT marketplace.
Step 3: Minting your NFT
To get started, you’ll need to connect your Ethereum wallet. When you click the blue “Create” button, you’ll be taken to a screen where you’ll be asked to connect your Ethereum wallet. When you provide your wallet password when prompted, your wallet will be automatically connected to the marketplace. To confirm you hold the wallet address, you may need to digitally sign a message in your Ethereum wallet.
The next step on OpenSea is to select “my collections” by hovering over “create” in the top right corner. Then, as shown below, click the blue “create” button.
You’ll be presented with a window where you may upload your artwork, give it a name, and provide a description.
Creating a folder for your newly formed NFTs is all that is required for this step.
After that, click the pencil symbol in the top right corner to add a banner image to the website.
Once done, click the “Add new” button to create your NFT. You will be directed to a new window where you can upload your NFT image, music, GIF, or 3D model.
Costs of Making a Non-fungible token
While making NFTs on OpenSea is free, other platforms charge a fee. This fee is known as “gas” on Ethereum-based networks. The quantity of ether necessary to accomplish a specific action on the blockchain – in this case, adding a new NFT to the marketplace – is known as Ethereum gas. Gas prices vary according to network congestion. The price of gas costs rises in proportion to the number of users transacting value through the network at any one time, and vice versa.
Well now that we know how to mint an NFT, let’s get to an even more important question.
Are NFT’s a lucrative investment?
Well the Non-fungible token market has been on a down trend for the most part of this year. If one thing is for sure, it is that NFT’s rely a lot on hype. Unless the artist is actually famous with a large fan following, it is very difficult to actually turn a profit from creating NFT’s. Most people who have made money on NFT’s were not creators. Infact, they purchase famous artworks and resell them.
Jack Dorsey’s first tweet was minted into an Non-fungible token and sold for a whopping $2.9 million dollars. However, it has lost 99% of its original value, currently expected to sell below $14,000. That is not a lucrative investment for anybody.
Additionally, gas prices can be a real pain. When Ethereum has a network congestion, sometimes the gas price is higher than the price of the Non-fungible token itself. Ethereum’s gas prices have been a constant bane on users. Layer 2 of Ethereum is expeced to address this issue, but we have to wait and find out more about that.
Although the Non-fungible token market is expected to bounce back up, it is uncertain as to when and how it would do so.