With the development of modern information technologies, the Internet starts playing an ever more important role in our lives and new ways to earn money online emerge. One of them is cryptocurrencies whose creation and processing is recorded on a blockchain.
For some time, the most popular blockchain and cryptocurrency around was Bitcoin. It was launched in 2009 and its price began to rise steadily in 2012 until it skyrocketed in 2021, reaching 60,000 USD at some moments. People who had some bitcoins in their digital wallet suddenly became rich.
However, Bitcoin is far from being the only existing cryptocurrency and it starts to be challenged by other digital coins, one of which is Ethereum (or ETH).
The Ethereum blockchain was created in 2015 and for a long time struggled to attract investors' interest. Things changed in 2021 when one particular feature of Ethereum gained popularity. That feature was NFT.
If you have been following the news on digital technologies lately, you must have seen this abbreviation quite a lot. Some of the biggest NFT deals were worth millions of dollars and numerous celebrities, including Elon Musk, Kate Moss, Snoop Dogg, Justin Bieber and many others invested in the technology.
So, what is NFT and why has it suddenly become so popular?
Non-fungible tokens
NFT stands for non-fungible token and is a particular type of digital valuable. As we have said, one of the main characteristics of NFT is that it is created based on blockchain technology, similarly to cryptocurrencies. However, there is a substantial difference between the two.
As its very name indicates NFTs are unique and have each their own value. This is the complete opposite of a cryptocurrency like Bitcoin, as one given bitcoin is always equal to any other bitcoin.
This feature of NFT is due to the fact that when you create an NFT token, you attach it to a particular digital or even real-world item you own. That information is recorded on Ethereum or some other blockchain and the NFT becomes a sort of ownership certificate that can be traded.
This means that the sale of an NFT involves not only a virtual token but also the corresponding real asset. That makes NFTs an excellent trading tool that can be used by artists to sell their art in exchange for ETH or by art collectors in building their digital collections.
In this article, we will look at the creation of NFT in more detail, so you can use it to protect your digital property or make money on your art.
What items can be used to create NFTs?
The main problem when trading digital art is its authenticity. As it can be copied infinitely, it is technically impossible to identify the original file, so its actual transferring from one computer to another does not make a lot of sense. What's more important in that case is the nominal ownership rights over the creation.
This is where NFTs and blockchain technology come in handy. When you sell an NFT, the transaction is recorded on the corresponding blockchain that is by its nature publicly accessible and the buyer becomes the new owner of the item in question.
This makes NFTs especially convenient for trading digital items, such as pieces of art, videos, tweets, avatars, photos, etc. that represent certain value and can attract collectors. Attaching NFTs to tangible assets is less common, except for certain cases we will look at later.
The most important requirement you should meet when creating an NFT is to be the real owner of the attached item. Otherwise, the token you create will be a fake and its sale can even lead to legal charges.
Now that you know what kinds of items can be transformed into NFTs, let's have a look at what tools you actually need to do that.
Anyone can create an NFT
As you probably know creating certain things on the Internet can be pretty complex. For example, if you want to develop a website or a new computer program, you are likely to need programming skills that you cannot learn in one day. However, this is absolutely not the case for NFTs.
Even if you find the blockchain concept somewhat confusing, there exist various user-friendly market platforms where you can create NFTs, set them for sale or look for other users' tokens.
So let's see how to create an NFT step by step.
First of all, the creation (or minting) of an NFT requires a file you will attach to it. Whether you want to sell a piece of digital art, a video, a photo or anything else, it needs obviously to be finished before you proceed to its sale.
Once your file is ready, you will need a place where to store your NFTs, so, you should think of opening a crypto wallet. Some of the best NFT wallets are Metamask, AlphaWallet, Trust Wallet, etc. In these wallets, you can keep both NTFs and ETH.
This last point is especially important. First, the creation of NFTs on most platforms, including OpenSea and Rarible, involves gas fees charged by the Ethereum blockchain. Second, when you sell your NFTs, you will be paid in ETH and you will need to store them somewhere before converting them into fiat money.
The third step in minting an NFT is to choose the right marketplace for you. OpenSea is without any doubt the biggest and most popular one, but other platforms, like Rarible or SuperRare, can also have their advantages. If you want to learn more about NFT marketplaces, you will find a lot of useful information in our article on the topic.
On the marketplace of your choice, you will need to create an account that you will use to create your tokens. Then, you should purchase some ETH to cover gas fees and you can start minting NFTs.
Some marketplaces, like OpenSea, allow you to buy ETH directly on their website, so you can have everything you need in one place.
Aside from Ethereum, NFTs can also be created on another blockchain. This option is, for example, offered by Rarible that allows its users to mint NTFs on Flow and Tezos. Using a different blockchain can be a good way to avoid gas fees. On the other hand, Ethereum NFTs can be transferred between marketplaces which makes it easier to sell them for a good price.
The best way to make money creating NFT
The technology is widely used by digital artists to get rewarded for their works, but their profits can vary a lot. For instance, it can be much easier for famous artists to sell a piece of art than for a beginning creator.
If they have a lot of subscribers on social media, they can share the information there and their creation will immediately become famous.
For a beginner, things may be more complicated. If you go on OpenSea or Rarible, you will see plenty of NFTs put on sale, so the competition is tough. A good solution, in that case, can be to trade not just one file but build a small collection of NFTs.
This will raise your chances to sell at least one piece of art. Once it's done, the buyer may share it online and new purchasers will be more likely to stumble on your creations.
The sale of NFT requires patience in the beginning, but as you cut more deals, your revenues per file will also increase. The surest way to succeed in the NFT business is to continue doing what you like and strive for an ever higher quality of creations.
If you want to learn about alternative ways to make money on NFT, there are plenty of useful tips in our article covering the subject. For example, NFTs can be used as social media avatars or represent characters in a video game, so feel free to have a look.
Minting real-world assets into NFT
As we have said, NFTs are mainly used to certify the ownerships rights over different objects. This is very helpful in relation to digital art and other items, but what about real-world assets?
For obvious reasons, minting NFTs from tangible items is less interesting because those usually cannot be copied as easily as a digital file. What's more, there are different ways to establish their authenticity.
For example, art specialists use magnifying glasses and other tools to tell original paintings from fake ones. Thus, the originality of the object can be established, so it would be unnecessary to create an NFT for that.
Still, in some cases, NFTs can serve as additional proof of authenticity. One such example is designer clothes. As there are a lot of counterfeits and not everyone is a textile expert, people may worry about being cheated.
How can NFT help in this case? If a collection is limited, the designer may attach each item to an NFT and transfer the tokens at the same time as the piece of clothing itself. As NFTs can be issued only by the designer themselves, it will make it much more difficult to sell a counterfeit.
If you want to know more about different ways to use NFTs, you may want to have a look at our article on that.
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