With only 2 weeks into 2022, Non-Fungible Tokens (NFTs) don’t show any indication of slowing down when it comes to making headlines. From giants like Gap and Konami launching their first official NFT collections to JP Morgan’s analysts claiming that “greater use of NFTs tokenization is in the line-of-sight for 2022”, the NFT craze seems to be going strong. This growing trend has many artists and content creators wondering how they can create and NFT to take advantage of NFTs and grow their communities while capitalizing on content.
Unfortunately for them, the NFT creation process seems to become more complicated as marketplaces like LooksRare continue to open and different networks seek to become major players in the niche. Sure, creating the NFT itself is not an extremely difficult process but choosing the right platform, network, and model requires a certain degree of technical knowledge.
If you are one of the creators that are now facing the challenge of launching your own NFT collection, you will be happy to know that you are not alone. The technical nature of blockchain networks, NFTs, and crypto has perplexed thousands of content creators to the point that NFT concierge services are now a thing.
The good news is that with a little help, planning, and patience, creating an NFT collection and launching it can be way easier than you would expect at first. If you are interested in taking advantage of the craze, you came to the right place. We have compiled a guide that should provide you with a good understanding of what you should consider when creating an NFT… As well as how to create and market it.
What is an NFT and Why Should You Care?
If you are reading this guide, chances are that you already have an idea of what an NFT is. Unfortunately, the chances that you are misunderstanding the technology are pretty high. Don’t worry, this is the case for most of those who are creating, collecting, or trading NFTs at this time.
With artists like Beeple and Pak, as well as projects like CryptoPunks, Axie Infinity, Bored Ape Yacht Club, and many more, NFTs have become a synonym of digital collectibles. While this is certainly one of the purposes they can serve, NFTs are a digital representation of any asset that is unique in nature and indivisible. This means an NFT could represent anything from a piece of art to real estate ownership, IDs, insurance policies, and much more.
An example of some of the innovative applications given to NFTs includes when TechCrunch Founder Michael Arrington sold his apartment in Kyiv using an NFT, Black Manta Capital Partners’ “Real Estate Token Offerings”, and Auroboros’ showing of NFT-powered Augmented Reality clothing during the London Fashion Week.
While you are probably more interested in art-related applications of NFTs, understanding the further implications of the technology could give you new ideas on how to use them. For example, if you are a YouTuber or content creator, you could use NFTs as a means for your fans to support you in exchange for a lifetime membership (represented by an NFT) which will grant them rewards depending on their contribution. This idea might not sound super innovative as there are platforms that offer a similar model… However, in this case, you wouldn’t need a third party.
Understanding the ins and outs of the technology is certainly a useful skill which you can benefit from. After all, NFT collections that make innovative uses of the technology are the ones making millions in a matter of seconds. Is up to you how to use them!
What Should You Consider When Creating an NFT?
As we said earlier in this guide, making an NFT is not a difficult process but doing it right certainly is. At this time, anyone can look for a guide and launch their own NFT collection in a matter of minutes. However, just like when creating a business, making sure to do it the right way will be the difference between success or getting burned.
If you are looking for the step-by-step version of this guide, you can skip this section. While we recommend that you take the time to consider the different aspects that can affect the NFT creation process, we understand you might have made your mind up already.
For those who will continue reading this section: Congratulations. By taking the time to do your homework we believe you will make the best out of the chance to participate in the NFT trend. Let’s look at some of what we believe are some of the most important things any NFT creator should consider.
Should You Use NFTs in the First Place?
Let’s be honest, we all know that including “NFT” in anything is enough to add value to it these days. With millions of people speculating with NFTs around the world, it is hard to resist the temptation to join the craze. After all, what is the harm in it?
Well, this might come as a surprise to you (or not), but the most important question you should ask yourself is “should I create an NFT”. Don’t get us wrong, here at Grit Daily we love NFTs. However, NFTs might not necessarily be the best way to implement whatever plan you have in mind.
For one, let’s be direct. While NFTs are pretty relevant at this time, there are a lot of people who disagree with where the trend is going. For example, when Square Enix’s President said he wanted to integrate NFTs with the studio’s business model, fans were quick to react negatively. Sure, the studio’s stock bumped… but at what cost?
The conversation around NFTs has become so polarized that even Anil Dash, one of the major contributors to the invention of the technology, has weighed in. In an article for The Atlantic, he shared his disappointment around the speculation in the NFT market by stating despite it not being fully developed by stating:
“When we invented non-fungible tokens, we were trying to protect artists. But tech-world opportunism has struck again.”
When considering joining the NFT craze, you must consider your audience’s reaction to it not only in terms of approval or backlash but also the technical and financial aspects of it. Launching a collection like NFT requires your fans to learn the ins and outs of crypto and blockchain to some degree, which might not be easy for everyone. In addition to this, NFTs are one of the hottest things right now due to their speculative value, which could result in alienating your followers.
What Are You Actually Providing Your Buyers With?
A common misunderstanding around the nature of NFTs is that you are acquiring/providing the digital asset itself. This misconception is the reason behind most of the criticism you probably have seen around NFTs: “Why pay X dollars when I can just screenshot the image?”. The truth is that when acquiring an NFT, the buyer is getting a sort of “certificate of authenticity/ownership” instead of the asset itself.
The implications of this inability of blockchain networks to store the asset itself are several but the most important is that the NFT ecosystem is “centralized” to some degree. As the image is not stored in the blockchain, it is stored in an external server which grants access to the image itself by using the link stored in the NFT metadata.
This fact has been highly criticized, even by Anil Dash in The Atlantic article we mentioned earlier, as it means the asset could potentially be stored if the server goes down or all copies are lost. While this is unlikely to happen as the owner will probably make sure to store it, it is still one of the drawbacks of the technology.
We will talk later on about which services will provide more convenience and security to your audience. However, what you must remember is this: Not all NFTs, marketplaces, or networks are made equal, which means understanding what you are offering is of uttermost importance.
Regulations Are Still Unclear
Cryptocurrency regulation has been known for being muddy waters when it comes to regulation as agencies like the IRS, SEC, and Department of the Treasury haven’t chosen to clarify the rules. Well, regulations around NFTs are even more complicated when it comes to regulation.
Depending on how you plan to use the NFTs, they could fall under one of the many protected assets by any of these agencies. For example, according to Forbes, many types of NFTs would fall under the definition of security established by the “Howey test” as they could be considered investment contracts, with fractionated NFTs (f-NFTs) getting closer to the definition. This means that depending on the type of NFT you want to use, you will need to make sure to comply with local regulations if any.
That being said, NFTs are highly unregulated at this time and as long as you are not trying to create/implement an extremely complex model around your NFTs, you probably are in the clear. Just be aware this could change at any time!
Not All NFT Marketplaces and Networks Are Made Equal
Creating an NFT might be a simple process but choosing the right tools is not. First, you will have to decide which network your token will be created on, which will have an impact on fees, performance, features, and more. Second, the marketplace you choose to sell it will determine the audience that will gain access to it as well as ensure the legitimacy of your NFT.
By choosing the right marketplace and network for you, you will maximize the capital you can make from them. For example, some marketplaces will require you to pay money upfront for the minting process or ask for a commission, which can increase your costs exponentially if you are planning on minting and selling multiple NFTs.
We will take a look later in this guide at some of the most popular marketplaces and networks you can use to create your own NFTs. However, it is important for you to consider that there might be other services out there better suited for your needs. Make sure to do your homework and look for the right fit!
The Jury Is Out on the Environmental Impact of NFTs
While discussions around the environmental impact of blockchain technology have been around for years, it wasn’t until 2020 that the discussion started gaining traction. This happened because The New York Times published a piece titled “In Coinbase’s Rise, a Reminder: Cryptocurrencies Use Lots of Energy”.
The article highlighted some of the alleged environmental impacts of networks like Bitcoin, which according to the writer were many. Ranging from requiring more energy than countries like Argentina to influencing environmental policy negatively, it was understandable that many people freaked out.
Immediately after publishing, many rebuttals were written by crypto enthusiasts and other organizations. Ever since, the debate has soared around the topic, with both parties making valid and invalid points.
Networks like Ethereum, which hosts some of the biggest NFT marketplaces, have a big carbon footprint. This means that by using them, you could potentially be contributing to the deterioration of the environment… Which might be against your beliefs. That being said, several networks use more energy-efficient algorithms, at least according to their development teams.
How to Create an NFT
Now that we have mentioned some of the considerations of creating an NFT, it is time to actually talk about how to do it. While the process will vary depending on several aspects, we will take a look at some of the most popular platforms and networks.
We will also be discussing the advantages and disadvantages of the different marketplaces and networks we mention. This is because as we said before, this will have a huge impact on how your NFT will be interacted with by your audience’s potential customers. Let’s get started.
Step 1: Pick Your Asset
There are virtually no limits when it comes to what assets can be tokenized into an NFT. This is because of the nature of NFTs, which we discussed earlier in this guide, as the NFT itself is a form of certification more than an asset itself.
No matter if you want to tokenize a video, song, picture, drawing, ID, writing, real estate, etc… Transforming it into an NFT is possible. An influencer went as far as selling her love as an NFT for $250,000 back in July of 2021! As such, the first step is to choose what it is that you want to transform into an NFT, the network and marketplace will depend on the type of asset.
That being said, in order to avoid legal trouble, you will want to ensure that you own the intellectual property you are tokenizing (if any). In recent months, it has become increasingly popular for scammers to create NFTs of content they don’t own which means that, of course, the NFT itself is worthless. Remember that NFTs are all about ownership and authenticity!
Step 2: Choose a Blockchain Network/ Platform
Many might not agree with us and tell you that you should focus on the marketplace/platform you want to sell your NFT on. We believe that considering both are equally important as not only platforms are built over networks but also due to the different benefits a certain network can provide.
Prioritizing a Network
There are multiple reasons for prioritizing a network over the platform itself but the main is that not all NFT standards are equal and neither are the associated fees, transaction settlement speeds, or stability.
Ethereum is king when it comes to NFTs as most of the biggest NFT marketplaces have been running on it since the technology was created. However, the network has experienced increasing congestion over the past year which has resulted in high gas fees and slow performance, which makes it inconvenient for many. The network is planning to deal with these issues with its Ethereum 2.0 update, which will also diminish the high-energy costs of the network.
If you find that the current unreliability of the Ethereum network is not something you can risk, there are other networks that have gained notoriety in the NFT ecosystem. These include Binance Smart Chain (BSC), Flow, Tezos, Cardano, Solana, Zilliqa, and many more.
Using an alternative network to Ethereum will provide you with benefits in terms of fees and speed at the cost of the audience. However, this is likely to change as the other networks continue to grow and developers move away from Ethereum.
Prioritizing a Platform
You might not want to invest the time and effort in researching the different transaction fees, speeds, and predictions for the future of multiple blockchain networks. If this is the case, prioritizing the platform might be easier… Except that there are also a lot of platforms out there to choose from. As such, we will focus on the 3 of the most popular of 2021.
Unlike the other entries in this list, OpenSea supports more than just Ethereum by offering cross-chain functionality with Polygon and Klaytn. As the biggest NFT marketplace by sales, OpenSea has been behind some of the most expensive NFT sales ever.
The marketplace has been around since 2017 and has more than 600 thousand users, 2 million collections, and more than $10 billion in trading volume. This makes it an extremely popular platform for creators looking to launch and sell their own NFTs.
If you are looking to reach as many people in categories like art, collectibles, music, photography, sports, virtual worlds, or domain names, OpenSea might be the best choice. One of the advantages of OpenSea is that you won’t need to pay a minting fee before a sale is complete as the NFT won’t be written into the blockchain until then.
It is also important to mention that OpenSea will require you to pay an “Initialization” fee before making sell orders. This is a one-time fee that will grant OpenSea access to your assets when a sale is completed. This fee can vary, which means you will only be able to determine it once you create your OpenSea account.
Rarible is one of the largest NFT marketplaces in the crypto space just as with OpenSea but with one major difference: Rarible offers support for 2 other major Layer-1 blockchain networks. With support for the Ethereum, Flow, and Tezos blockchains, Rarible will allow you to launch your NFT in a variety of categories very similar to OpenSea.
While Rarible used to charge for minting in advance, it introduced a new feature that will have the buyer pay for minting gas fees upon purchase back in October of 2021. This means that as a creator, you won’t need to pay the minting fee and risk not selling your NFT. However, just like with OpenSea, you will need to pay a fee for connecting your wallet with the platform to initialize your account.
Unlike OpenSea, Rarible makes use of its own cryptocurrency: Rari. This coin is not only used to pay for NFTs but also works as the governance tool of the platform, which allows it to work in a decentralized manner by having its holders vote. This is a reflection of the platform’s high emphasis on its users.
Nifty Gateway is behind some of the biggest sales of NFTs in the history of the space, being the go-to platform for artists as popular as Beeple. Owned by Gemini, the crypto exchange founded by the Winklevoss twins, the marketplace runs on Ethereum and offers curated NFT collections.
To use Nifty Gateway, you will need to go through an application process that will require you to fill a form providing basic information. Once the application is processed and hopefully approved, you will be able to join some of the most influential NFT artists out there.
One of the biggest advantages of using Nifty Gateway to create an NFT is that minting your tokens comes at no cost. That’s right, Nifty Gateway covers 100% of the gas fees for the minting. This also translates to other gas fees, as in the words of the marketplace “we try to take care of most of the gas fees for you.“. This, in addition to the user-friendly interface and features, make it a favorite among beginners.
Step 3: Set Up Your Wallet
Now that you have chosen your favorite marketplace, it is a matter of creating your NFT… However, there are certain arrangements you need to complete before being able to do so. If you have an idea of how blockchain, crypto, or NFTs work, you should be familiar with crypto wallets. In order to create your NFTs, you will need to have one first.
A wallet is basically the tool that you use to “store” your crypto. We use quotations as a wallet doesn’t really contain your tokens but it grants you access to interacting with them by storing your keys. While this technical distinction might not seem relevant at first, it can become important under certain circumstances… However, we won’t duel on the technical aspects of wallets as there are great articles such as this one by Binance Academy, which explains the ins and outs of crypto wallets.
Metamask is the crypto wallet we recommend you use if you don’t have one yet, as it is compatible with most Ethereum-based decentralized applications (dApps). This wallet has proven to be one of the most popular and secure, while also offering a mobile and web version, which makes it extremely convenient.
No matter what crypto wallet you choose to use, you will need to make sure it is compatible with the NFT platform you chose to use. You also have to make absolutely sure you store your recovery phrase somewhere safe as it is the only means to recover your wallet and all the crypto you have associated with it.
Step 4: Connect Your Wallet and Create an Account
Now that you have a wallet, you should create an account in the marketplace you will be used to create an NFT. This process should be as connecting your cryptocurrency wallet to identify yourself and following the steps you will be shown.
There are two important considerations you need to keep in mind: First, your crypto wallet will be the key to your marketplace account and as such, you need to make sure to keep it safe at all times. Second, scammers and hackers might ask you to connect your wallet to their phishing applications when trying to steal from you, which is why you must never connect your wallet without checking you are on the right site first.
Step 5: Create an NFT
Once you have set up your account, you are ready to create an NFT. This process will vary depending on the platform you are using but will be pretty similar for most of them. If the process doesn’t start immediately after setting up your account, just make sure to look for the “Create” or similar button.
You will be required to update the file containing your asset and provide basic information on the NFT you want to create. This information can include items such as a description, an external link to your website, title, number of NFTs you want to create, etc. Before completing the process, make sure to double-check that all information is correct!
Once you click on the “create” (or equivalent button), the token will be minted… Well, kind of. As we said earlier in this guide, the platform might choose not to mint it until the first purchase is complete, as this will save you money in fees. In any case, your NFT will now be available for you to sell.
Step 6: List Your NFT
If you are creating an NFT, you probably are thinking about selling it to make some money. Well, if you have ever sold something on platforms like eBay or Amazon, the process is pretty much the same.
To start, just go to your NFT’s overview and find the “sell” option. Once you have done so you will be able to list your NFT for auction or fixed price sell, which is pretty convenient as your intentions might vary. Make sure to fill in the form, double-check the information, and then complete/publish the listing.
The last step will require you to authorize the platform to access your wallet through a signature request, which you will need to grant access to. This will ensure that the NFT can be minted and transferred upon purchase, which is essential when it comes to completing a sale. You also need to keep in mind that depending on the network or platform, you might be required to pay a fee for this initialization process.
Now that you know how to create an NFT, it is just a matter of thinking about how to market yourself and come with innovative ideas. After all, the NFT market is so hot right now that only those who are able to stand apart from the competition are able to capture a wide audience.
Creating an NFT can seem like a daunting process at first, especially if you are not familiar with the cryptocurrency, NFT, or blockchain ecosystems. However, once you have set up all of the tools needed and completed the process for the first time, creating an NFT will be as easy as sending an email.
2022 has been predicted to be the best year for NFTs by many experts, with personalities like Kevin O’Leary going as far as calling it “The year of the NFT”. Is up to you to capitalize on the unique opportunity this represents. All we hope is that this guide proves useful in this endeavor!