The world of crypto and blockchains might be hard to follow, but NFTs are one of the results of the technology. Love it or hate it, that tech is growing. NFTs typically seem to have people on one side of the fence or the other. You either are a fanatic of this fast-growing and faster-changing phenomenon, or you are still scratching your head about what they even are, and wondering who pays millions to own a Tweet?
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What Is an NFT?
Before we dive into what it takes to mint an NFT, it is probably best to know what an NFT is. Abbreviated from a non-fungible token, the term NFT is something that is proven ownership. It is not tradable, and there is no true equal. It is unique and irreplaceable.
An NFT can be any digital file. These assets are finding value and are helping others along their way. Namely, creators and artists are thankful for its additions to the art world.
Benefits for Creators
Besides bringing artists together with the buyers that want their goods, NFTs and the related market has also brought about a new value to digital art. Once thought to be rather an outcast of more traditional art mediums, it is bringing some artists validation just by existing.
Exchange platforms are also providing an avenue for an artist to be paid. The term “starving artist” exists for a reason. It is a difficult industry to sell your wares within, and the existence of the NFT Marketplace is not only connected sellers with buyers but is creating a financially beneficial method in which to do it.
With top pieces garnering $69 million coming out off of a Christie’s auction block, NFT artists are being noticed, worldwide. The NFT industry also cuts out the middle man, allowing an NFT artist to create NFTs, Mint NFTs, and of course, sell them.
Using Smart Contracts
Benefiting from the same technology that makes the transactions of cryptocurrency possible, the marketplace for NFTs is also streamlined, with faster payments, easier contract outlines, and error-free payment thanks to smart contracts.
A smart contract operates on an “If/Then” concept. If X occurs, then Y can happen automatically. These contracts cut out the need (and read the payment for) extra hands. A decentralized ledger means, too, there is no central authority, so there are no transaction fees coming from that angle.
These contracts, in conjunction with the blockchain, cut costs for artists, just like it does for crypto investors, with streamlined, efficient, and effective processes.
Traditional Art vs. NFT Minting
Additionally, the use of the marketplace provides artists with new ways to make money altogether. Let’s use a typical, traditional art selling process so we can compare the two.
In the “real world,” an artist creates a painting. This likely took quite a bit of time, the cost of materials, such as paint, canvases, and brushes, not to mention an immense amount of creativity on the artist’s behalf.
An artist can only create when they feel inspired. They purchase their own materials. They have a process.
Once the art is created, the artist must find a way to sell it. Sure, there are even online resources like Etsy or stores allowing you to create your own account and sell your piece. Hopefully, you will catch the eye of a buyer.
If you follow an even more traditional method, you may even need to find a space, as an artist, to show your works. You will need an entire collection of art to land a gallery run or to have a storefront. You may have to pay to do so. You may not see any profits at all.
There is a reason they say art becomes more valuable when the artist dies: it is in more demand. It is a hard reality, and many have lost more than their wallet attempting to navigate it.
If you are lucky enough to find a buyer, sell the piece, and get paid, your profit will take some time to transfer, and paying may be delayed by whichever banking system you agree to use.
Savings To Be Found
Thankfully, in today’s online universe, minting an NFT can be far more profitable than its traditional counterpart. For one, the costs to develop your art is much more affordable. Coding makes the creation process much more computerized and efficient.
Whether an artist still thinks of it as “create,” remains to be discussed. Art form or not, this keeps more dollars in your wallet as an artist.
Secondly, there is profit to be found by operating on a platform as opposed to a brick-and-mortar store out in the community. Users are more frequently seeing your work. The fee is preset. A price predetermined by your smart contract.
You also save money on fees. A fee may be charged when displaying your art for sale. A fee may be charged by your bank in transferring or processing your payment. A fee is likely incurred for packaging or shipping your work.
All of these costs can be cut with the use of a platform for NFTs and how tech actually helps you save a buck as opposed to physical assets and their challenges.
A New Stream of Revenue
You may be familiar with a musician’s royalties. When a piece of music is played, pending that artist’s contract with a record label, a singer (or songwriter) may be paid a royalty. It is basically paying a fee to get to use that work.
In that same concept, the blockchain technology used in NFTs is also allowing for artists to be paid in a royalties style of earning, a stream of revenue not previously available to traditional artists.
Using the unique, verified ownership data that denotes a true NFT (non-fungible token), artists can also program these to allow them to be paid on the initial AND future transfers. In other words, each owner of a piece, current and in the future, would be paying royalties to the original artist.
This would allow each work to make artist money more than once, assuming it is transferred at any point. It also ensures that the original artist gets the “commission” of sorts back into their pocket, and not dollars for a major label.
NFT Creation Process
One of the first steps in creating an NFT is creating the art. There are methods, should you not find yourself too crafty or artistic in abilities, to even outsource this stage. And, you should not be surprised to learn, technology can play a role in each of the steps.
As an NFT is a digital file that can be almost anything, what type of art you are working with will partly determine how you create it. No matter the medium, however, there is software to help you along the way.
Coding Your Art
One way many artists are finding a way to create mass quantities of art (the more pieces, the more you have to sell, at least in some creators’ theories) through the advances in coding technology. You may have heard that the current record-setting get for an NFT was actually an auctioned collections of work.
“Everydays,” by Beeple was a collection of 10,000 images. It was the first in a project which has continued for 14 years, during which he has taken a photo each day.
That dedication, however, isn’t required if you bank on the coding needed to make it simpler. By simply creating a series of parts, and with the touch of a few buttons, you can have a randomly combined collection of art in minutes.
Hiring a Helping Hand
In addition to tech, some rely on others completely to create the art. From commissioning an artist to create art (or pieces of it to randomly intermix), to creating them with software, it doesn’t take the next Picasso to make these files.
Of course, again, these media can vary from pieces of a sound or individual notes making up a .mp3 file, to clips of video making up an .mp4 or .mov file. The artistry, or required parts thereof, varies by media. How “artistic” you want to be will also matter.
Either way, your choices will somewhat impact your art creation. Something can be created from very little. And, it does not take much more than data files to complete it.
Purchasing Existing NFTs
If you prefer to skip the creation step altogether, many on the NFT Marketplace are aiming to simply buy, sell, and trade, and less in creating their own. This is always an option, to become more of a broker of NFTs than a creator.
Minting an NFT seems a cumbersome task, especially for beginners. The varying steps, the tech knowledge, and the costs can all be unknown factors that concern a new platform user. However, if you break the looming beast down into consumable parts, it is much easier to handle.
Selecting Your Pieces
Just like starting with crypto requires a digital wallet, so too does your venture into NFTs. There are steps you must clear before you can dive in head first.
Firstly, you need to select your unique digital art. This can be anything from an .mp3 file, a drawing, a video game, a song, a movie, a sound byte, a clip, a meme, a tweet … the list goes on and on. Again, nearly the only “rule” is that it be a digital file. Limits only exist in the mind of the artist, and that can be a vast and crazy space.
Pick Your Platform
Next, you will want to select your Blockchain. The Internet is full of options, and you need to select which blockchain makes the most sense for you. Currently, Ethereum is the top choice amongst creators with the biggest audience posting it it.
Other choices include sites such as Tezos, Polkadot, Cosmos, and Binance Smart Chain. This list too goes on and on. A quick search, and you will be scrolling for hours.
OpenSea.io has a step-by-step process and is outlined by many a user on YouTube, making it another popular choice, especially for new artists. Its platform is made for its ease of use, and aims to make the process painless.
Again, as with all stages, read your fine print. Things like minting fees, a service fee, Ethereum gas fees, or miner gas fees can all be a variable cost when it comes to selling NFTs. When you are ready for minting NFT tech, remember these costs, too.
Create a Digital Wallet
If you are new to the entire crypto game, we again need to start at the very beginning. As Julie Andrews once sang in “The Sound of Music,” “that’s a very good place to start.”
Before you get into NFTs and the cryptocurrency space, you need to create a digital wallet. Nothing involving digital assets is done without a crypto wallet. These wallets don’t per se hold money so much as it holds keys.
Think of a wallet as two main components: your private key (think your private PIN to your debit card) and your public-facing key (think your Venmo account QR code). Until you have a wallet, buying, selling, or trading won’t truly have a landing space.
This is like creating your account so that you can begin interacting in the crypto exchange universe. In other words, this will now make you a user, able to interact on the platforms.
You will have unique and private log-in information, depending on the wallet you choose. The MetaMask wallet is one such product, another being Brave, that both rely on a security code that includes a 24-word phrase.
Select an NFT Marketplace
Pick an NFT Marketplace. Just as you have choices when it comes to blockchains for your crypto transactions, so too do you have options when selecting amongst the long list available.
Some popular options currently on the market include Rarible, OpenSea, Nifty Gateway, Mintable, ThetaDrop, Axie Marketplace, Larva Labs, Crytpo Punks, SuperRare, and Foundation, each with countless unique users. Other platforms offer specialty marketplaces also exist, focused on a specific genre or topic, such as the NBA Top Shot Marketplace.
Find the one that fits your needs best. Keep an eye on things such as transaction costs if you choose to go the way of an established marketplace. Transaction fees, if not covered by the purchaser or miners’ gas fees, may fall on you. Read that fine print. We’ll get more into that hurdle later.
Add Your Art
Upload your art can be as simple as it sounds. The true sense of having NFTs minted is just that: creating them. Depending on which marketplace you select, the platform itself will walk you step-by-step taking your digital file, such as an .mp3, .jpg, .png, or .gif, etc.) and minting that into an NFT ready for its marketplace.
The minting process will be slightly unique to that sale site. These vary depending on the NFT marketplace and how they go about the mint process. That specific NFT Marketplace you picked will impact what steps are required, what rules must be followed, and how your art will be posted.
Some spots will charge a minting fee. Others rely on a mode called “lazy minting” essentially done right at the time of sale.
Prepare Your Art For Sale
The last step typically required is for you to prepare your NFT for sale. Once again, this final step may differ slightly depending on the NFT Marketplace you have chosen.
NFT Marketplaces typically operate via three main sales modes: a fixed price (think eBay’s “buy it now” option; you pick a minimum price you will accept), a timed auction (an auction set to end at a predetermined time), or an unlimited auction (you choose when to end the auction when you are satisfied with the price).
You will need to decide which mode is best for your own personal use. Transactional fees can vary depending on platform and sale style. The “cut” or loss of funds you may risk in your mint also vary. Most blockchain technology, however, has a goal to enables creators to make the most they can.
If relying on a lazy minting site, the sale timing may also have to consider the addition of the minting taking place at the point of sale. Just keep minting in mind when considering your timelines.
Gas Fees: The Cost of Business
You may understand that, with any business model or work performed, there is likely to be a price tag along with it. As the phrase goes, nothing comes for free. One of the biggest concerns in the NFT industry (and cryptocurrency as a whole) is the use of energy it is consuming each and every day.
The Cost of Power
Because the blockchain technology requires the computation of complex puzzles or the decoding of vast security codes, the actions to do so mean a lot of computing power. That power, thought we work and focus on a completely digital world, comes from real world natural resources.
While efforts to use green energy are always growing and expanding in concept, it can be a high price to pay for cleaner energy. In the meantime, the blockchain world takes millions of computers, countless servers, and even human ingenuity to operate. And those things, come with a cost.
Covering Transaction Fees
The cost, however, isn’t just energy. As you may have guessed, continuing the proof that nothing is in fact free, that energy also costs money.
In order to cover transaction fees incurred during these processes, miners (those working to create new blocks in the chain, thusly solidifying the ledger with recorded and verified transactions) often charge a fee to do the work. That fee, ironically given its natural resource consumption, has been dubbed the gas fee.
Which Is Cheapest?
At the end of the day, these laundry lists of steps vary at each choice you make. What fees are charged, how they are calculated, to whom they are paid all can change depending on your platform. Your wallet may have fees attached. Minting NFTs can have a cost. Gas fees are nearly unavoidable.
Yes, minting NFTs is not a free process. But, when you compare it to the costs of traditional art, it can still open new doors for digital art. While the gas fee can vary by blockchain, currently some of the most affordable options include:
As previously discussed, lazy minting is done at the point of sale of an NFT. This means that the NFT is not “gassed” through the process, thusly incurring more and more gas fees. Instead, this somewhat longer process is sometimes favored because there is less environmental impact. Gassed tokens, or those paid via gas fees, take up plenty of energy. A platform like Rarible offers this lazy minting option.
Deciding When To Submit
The cost of minting varies greatly depending on when the gas fees are up or down. Guessing at these can be an artform all of its own. Gas fees can be lower when fewer people are using the platform you are. With fewer “drivers,” those selling gas have fewer options, and thusly lower their costs.
Ethereum offers pay scales to make understanding the fees, and their days of ups and downs, more clear. Analyze and research before you jump into the mix. It can save your countless gas fees in the long run.
Dodge Those Fees
Like a rubber ball zooming for your head in middle school gym class, one of the best ways to avoid high costs is simple by dodging them. From the time of day, to the transaction fees associated with a platform, with careful research and some hard work on your part, understanding these changes can make a huge difference in what your cost is at the end of the day.
- While there is more upfront work (i.e. research and effort) at the start, once you find the often-predictable and somewhat forecastable trends, you can use that knowledge over and over to hit peak times, saving you money.
Making NFTs Affordable
There are a plethora of products on the market, and just like the value of crypto, the platforms are changing every day. Keep informed of the trends, especially when it comes to the cost of doing business with your digital assets, and stay on top of the wild market and its changes.
FLOLiO provides resources and information at your fingertips to be sure you are getting the best bang for your buck. By keeping up on your research, you are bound to find the best ways to keep the cost of NFTs down, and profits up.