Navigating the World of NFTs: A Comprehensive Guide
What is an NFT?
Cryptographic NFTs are digital tokens that are associated with specific physical or digital objects. In addition to recording authenticity and ownership, they also record ownership of the item. Because token metadata cannot be replicated or replaced, it is unique. NFTs are non-fungible tokens that are issued on the blockchain.
Here's an example of an easy-to-understand NFT use case: let's say you have a digital art piece. You can mint your art piece on the blockchain to prove that it is authentic and owned. An NFT (Non-Fungible Token) is a digital asset that is stored and traded on the blockchain. In this sense, a NFT can represent anything, from real estate to documents and films. Like a traditional currency, it cannot be exchanged for another asset. NFTs can be used to represent ownership of digital or physical assets, such as artwork, music, and videos.
Currently, NFTs are used for a variety of purposes, including:
Art
Collectibles
Virtual land in the metaverse
Music
Gaming items
Photography
What can you do with an NFT?
In simplest terms, an NFT is a token used to prove authenticity and ownership associated with a digital or physical product. What can it be made into? What can it be used for? NFTs can be used to tokenize or manufacture virtually anything. The most common uses are art, music, gaming items, and digital collectibles. Their purpose depends on the viewpoint of the user. In addition to collecting NFT-associated items, people often purchase them to receive utility benefits, such as community membership and future discounts, or to own gaming assets that may appreciate in value. NFTs also have the potential to represent real-world assets such as real estate, stocks, and commodities, giving users the ability to purchase fractional ownership, increase liquidity, and even automate compliance processes. Around 5,000 NFTs are being sold daily as of April 2023, with daily sales revenue hovering around $15 million.
What Makes an NFT Valuable?
NFTs are often questioned as to their value because they are intangible and typically represent digital items rather than real-life, physical items. Many factors make them valuable, and one of the most common arguments against them is that they don't have value because they are intangible.
However, there is no doubt that most of our time is spent online, so people naturally value digital items. The great thing about blockchain and NFTs is that they allow us to attach ownership and authenticity to digital items – which means that digital items have value for the first time ever.
A NFT's value can be attributed to two main factors:
Scarcity
People agreeing it is valuable
Using NFTs, you can prove your ownership in a digital world, a feature that was not possible before. However, with the advent of blockchain technology and NFTs, the principle of scarcity can now be applied to the digital world as well. Due to its rarity, uniqueness, and indivisible nature, NFTs create value because they can be bought and sold a number of times over as well as be proven to be authentic and owned.
NFTs are valuable not just because of scarcity, but also because people and communities agree that something is valuable.
A lot of NFT projects are coming out every day, and the value of these projects will depend on the items they sell. Is it an in-game item NFT, a song NFT from a famous musician, or an NFT representing a digital collectible from an NFT project that also provides other benefits?
As you can see, determining the value of each of these will differ hugely depending on the project or item.
Are NFTs cryptocurrency?
There is a common misconception that NFTs are cryptos, but NFTs are not cryptocurrencies. A NFT is a digital asset that can be purchased with a cryptocurrency, but behaves differently from a cryptocurrency like Bitcoin or Ethereum. A bitcoin is fungible, and every token has the same value; however, a NFT token is unique and unique. You’ll often see ETH and NFTs mentioned together. Ethereum is the most popular blockchain for NFTs, and ETH is the most common cryptocurrency used to buy NFTs. The relationship between cryptocurrency and NFTs is like a dollar and a painting. One is a currency used to purchase goods, and the other is a unique and valuable piece of art. ETH is the currency used to purchase the artwork in the form of an NFT.
Below is a comparison chart explaining the difference between NFTs and crypto.
NFTs VS Crypto
Non-Fungible Tokens Fungible Tokens
Unique Uniform
Non-Interchangeable Interchangeable
More difficult to sell Can be Sold Instantly
Indivisible Divisible
Why do people buy NFTs?
A NFT can be owned for many reasons, but two are common: investment and pleasure.
While there are many people who buy NFTs to make money, either by flipping them or as a long-term investment. Many people are also serious collectors and enjoy buying NFTs to invest in an artist or musician as they simply love collecting unique artwork or cool digital collectibles. Gamers buy NFTs for various reasons too, perhaps to upgrade their gameplay or to own a valuable in-game item.
Most NFT projects now also offer special perks such as utility, community benefits, merchandise, and more. Hence, people love to join and invest in fun, innovative and engaging projects.
How to Make an NFT
If you’ve been hearing about NFTs for a while and feel you’re finally ready to make one, you’ve come to the right place. In this article, we’ll go through a step-by-step guide on how to make your own NFT. You don’t need to know any coding to create an NFT, anyone can get started and make an NFT.
We cover the following steps below:
Choose an NFT marketplace
Mint your NFT
List your NFT for sale
Build a community & Promote your NFT
Choose an NFT Marketplace
There are many different NFT marketplaces for art, and new ones are popping up all the time. There are also different blockchains on which the NFT platforms are built, meaning that they will use different cryptocurrency and a different wallet. Some marketplaces are open for anyone to use and sell their creations on; others are curated, and you will need to apply with a portfolio to be accepted. Additionally, each platform has its own set of rules and terms of service which need to be followed in order to use the platform. It is important to review these and understand them before listing any artwork.
Mint your NFT
Minting is the process of creating an NFT from your art (or any other item) on the blockchain. The minting process is very simple; you simply click a “Mint Now” button or something similar, and there you have it! This is an important step, as it ensures that the artist is in compliance with the platform and can protect their artwork from being misused or misrepresented. Additionally, it can also help the artist to maintain control over how their artwork is used and who is allowed to use it, which can be especially important for artists who are trying to protect their intellectual property.
List Your NFT for Sale
Once you’ve created your NFT, it is time to list it for sale. There are two transactions to complete before you can sell. They are both free except for the gas fee.
Once you’ve completed these two steps (which will pop up when you’re setting up your account and creating the NFT), you’ll be asked for your digital signature to confirm your listing. From there on, you will not pay gas fees for future sales (the buyer pays them).
Every NFT marketplace has its own fees for every sale you make, usually around 2.5 – 5%. You’ll be able to set your own royalties on all Ethereum-based NFT platforms and on some other blockchain platforms too.
Build Community & Promote Your Work
If you haven’t been using Twitter, it’s time to open up an account and start tweeting with fellow NFT users. Twitter is where all the NFT action takes place, and one of the most important parts of selling NFTs as an artist is building a community of supporters, whether they are collectors or fellow artist friends who are happy to promote your work.
Discord is another popular app that NFT communities connect through. You can eventually set up your own group there where you can post about new NFT drops and keep your fans up to date with your latest creations.
How to Promote Your NFT Project
We’ve all seen massive NFT sales on social media or on the news, which can be inspiring and encouraging. Unfortunately, it can be misleading to newcomers, as it creates the impression that you can just create NFTs and sell them immediately.
You may have an incredible NFT project or NFT art, but if you’re not putting it out there, it’s unlikely you’ll make enough sales or have a solid community of fans.
Luckily, you can promote your NFT project in two ways: free and paid. Let’s take a look at both options.
Free Promotions
Social Media Campaign
Naturally, the best way to promote your NFT project is through building a social media profile. Unless you want to get a bad reputation, go for organic followers and don’t inflate your followers. Not only is it unethical but it is not guaranteed that your NFT project will be successful just because you have a bunch of followers. You want real, engaged fans who truly believe in your project.
Twitter, Instagram, TikTok, and Medium are all good channels for promotion. Make sure to start promoting way ahead of the drop, so people can have plenty of time to share your project with others. Let everyone know about what’s going on, the team, why it is epic, and be prepared to answer questions about what NFTs are!
Cool Landing Page
Not necessary, but definitely a good move if you can set up a cool landing page by yourself for free. Landing pages add to the legitimacy of your project and allows people to quickly see all the necessary information about your project. A FAQ section is great for answering common questions about how to buy an NFT and your project overall. If a media outlet decides to pick up on your NFT project and write about it, they can easily get all the information in one place.
Get Featured on Weekly Drops
If you’re an NFT artist, one of the best ways to get more eyes on your works is through the weekly featured “Drops” which many NFT marketplaces host. There is usually a special section on each marketplace’s website dedicated to the weekly Drops, and they are advertised on their social media channels. It’s a win-win (although, keep in mind it’s not easy to get featured on these as they’re many artists and only 4-5 slots per week).
Podcasts
Another great option is to join Web3 and blockchain-focused podcasts to talk about your project and engage with the community. There are many NFT podcasts out there, Twitter Spaces talks, and Twitch discussions that people would be happy to host you on.
Paid Promotions
Paid PR Article
A paid article on a themed website exclusively about NFTs is one of the best ways to get the word out there. News websites such as NFTNOW are dedicated to a specific niche already have a large trusted audience, and an article on there will help add some professionality and glamour to your project. After all, if a news website is writing about it, it must be pretty good! These websites will also share the articles on their social media channels, so you get a two-in-one deal.
Partner Up with Influencers
Teaming up with an influencer with a large community can be very useful in getting your project out there. People love to get recommendations on buying from well-known and successful NFT collectors. Depending on who the influencer is, this might be costly, but it could pay off if it gives you exposure and people love your project.
Promote Your Project on Special Social Media Channels
There are several Instagram and Twitter channels that only post NFT drops. Some of these have a large audience, so that is another viable option for getting the word out there. However, depending on the account, these might not be as effective as a paid article, as their followers might not be real. Always check to see if the page has grown organically.
How to Buy NFTs
If you are looking to buy NFTs there are a few steps you need to go through. The process can slightly differ depending on which blockchain you are using.
The first step would be to create a crypto account if you don’t have one already. You can create an account on a trusted crypto exchange platform such as Coinbase, Crypto.com, FTX, Kraken, or Binance.
Once you have created your account, follow the steps on the platform to purchase the crypto you will be using. For example, if you are buying an NFT on the Ethereum blockchain, then you will purchase ETH.
The second step is to download a crypto wallet extension to your browser. For example, if you’re using the Ethereum blockchain, MetaMask is the most popular one. If you’re using the Tezos blockchain, then you can download Kukai.
Once you have downloaded the appropriate wallet, you can transfer the crypto you bought and that is stored in your account on the crypto exchange platform (ex: Coinbase), to your wallet (ex: MetaMask). You can follow the steps here on how to transfer money from your crypto account to your wallet. It is simple, don’t worry!
Once you have filled up that crypto wallet, simply connect with your wallet to the NFT platform you’d like to buy an NFT from, and voila! You’re ready to buy your first NFT!
Some NFT marketplaces do offer payment with a credit or debit card, but that is often not the case, so it’s better to have a crypto wallet stacked up.
How to Sell NFTs
Whether you are a digital creator or a collector, you must follow the same steps to sell your NFT.
1. Choose an NFT Marketplace
The first step is to decide which NFT marketplace you’ll use to sell your NFT. There are dozens of options if you’re selling on the Ethereum blockchain. If you’re selling on another blockchain, your choices will be more limited.
2. Set Up a Crypto Account & Wallet
Once you have chosen the best NFT marketplace to sell your NFT on, you’ll need to create a crypto account and a crypto wallet (such as MetaMask) if you don’t already have one. You will need a wallet to log in on these marketplaces. Please read the instructions here on how to set up a MetaMask wallet.
A crypto account is created on cryptocurrency exchanges such as Coinbase or Kraken, where you can buy crypto and then send it to your wallet to pay for gas fees or buy NFTs. You can follow the steps here on how to transfer money from Coinbase to MetaMask.
3. Mint Your NFT
When you’ve got your wallet ready, it’s time to “mint” your NFT on the marketplace. Minting refers to the process of uploading and validating your digital creation (or document, ticket, etc). The minting process is quite simple; you just have to click on a few prompts that say something like “Mint Your NFT” and confirm the transaction. There is usually a fee for the transaction known as “gas fee.” The NFT platform itself doesn’t charge gas fees; they are fees for the blockchain transaction.
Gas fees are often very high on the Ethereum network, so many artists have begun experimenting with alternative blockchains to avoid the high gas fees.
4. List Your NFT for Sale
Once you have minted your NFT, you are ready to list it and sell it! Again, the steps are usually straightforward, but differ slightly on each marketplace. Make sure to read the guide on the platform if you are confused.
If you already own an NFT, you will know most of these steps. All you have to do is list it for sale at your desired price.
Quick recap:
Decide on NFT marketplace
Create a crypto wallet if you don’t have one
Mint your NFT
List it for sale
Is it Difficult to Sell an NFT?
This brings us to the next question: Is it difficult to sell an NFT, or rather, how easy is it to sell an NFT?
Most people interested in creating and selling NFTs are digital creatives.
So in short: Yes, it is hard to sell an NFT unless you already have an audience. As with anything, you need to find your buyers, and they don’t come just because you uploaded something on a marketplace or website.
Perhaps, many are under the impression that it is easy to sell an NFT because media outlets consistently report on the biggest sales. Still, the reality is that in terms of NFT art and NFT collectibles, the market is overcrowded. There are certainly more NFT artists than NFT collectors right now.
So if you’re an artist, or thinking of launching a collectibles project, you’ll need to get acquainted with the NFT community on Twitter and promote your work on places such as NFT Plazas, social media, and even at real-life NFT events.
We have an in-depth guide on How to Become a CryptoArtist which you can read here. The guide explains all the steps you need to take, everything from where to connect with the NFT community to how to price your NFT artworks.
How Do You Convert an NFT to Cash?
So you sold your NFT; now, you might be wondering how to convert the crypto you have earned to cash.
You will have to send the crypto from your wallet to your account on the cryptocurrency exchange you’re using (such as Coinbase, Binance, Crypto.com, Kraken, etc.). If you’re using a MetaMask wallet, simply click on the “Send” button and copy and paste the address of your crypto account.
It will take a few minutes to receive the money in your crypto account. Once you have received the money, you can sell it on the crypto exchange you use to convert it to fiat. Once you have sold your crypto, you will receive the money in fiat, and then you may send it to your normal bank card.
Can I Sell the Same NFT on Different Platforms?
Technically speaking, yes, you can sell your NFT on different marketplaces. But it’s not the best idea and will certainly ruin your reputation. Collectors will not buy from you again if they find out (which they will) that you’re selling the same art piece across various marketplaces, especially if you sell the same NFT for a different price on another NFT platform.
In terms of sales, it is also better to mix things up and offer different NFTs on different marketplaces rather than trying to sell the same creations on all your various accounts. By offering different NFTs on several marketplaces, you can appeal to a wider audience of buyers who may like one of your pieces more on another platform. You can also curate the collections or artworks that you sell on each platform so that they follow a specific theme.
How to Store Your NFTs Safely (NFT Security)
NFTs are one of the breakout collectibles of the last decade, and some of them are worth thousands of dollars or more. If you have a valuable NFT, you likely want to protect it the same way you would an expensive baseball or Pokémon card. There are numerous ways to keep your NFTs safe, and many of them depend primarily on the blockchain on which they’re minted.
Ethereum NFT security
Many of the most valuable NFTs are minted on the Ethereum blockchain. Anethereum wallet such as MetaMask is generally regarded as secure since it requires a lengthy passphrase to access. It’s essential that you back up your wallet phrase somewhere, as your funds and NFTs will be lost if you lose it. We recommend writing your wallet phrase down on a piece of paper and storing it in a waterproof safe.
If you want the highest level of security possible, consider a cold-storage hardware wallet. Wallets like Ledger allow you to store your NFTs offline, making them effectively unhackable. If you opt for a hardware wallet, pay close attention to the product description and ensure you buy a newer model that supports NFTs. Make sure to store your hardware wallet in a safe location, as your NFTs can be lost if the device is broken. Still, many hardware wallets can restore lost data if it is damaged, lost, or stolen.
NFTs and IPFS
Many people believe that images, videos, and audio used for NFTs are stored directly on the blockchain, but this isn’t true. NFTs typically point to files stored on IPFS servers like Pinata. Although you can’t store your NFT directly on IPFS, it is worth understanding it so you don’t buy an NFT that points to a file that will eventually disappear.
If hypothetically, the NFT was minted using an IPFS service that isn’t trustworthy, the image may eventually disappear if the IPFS node shuts down. Additionally, if the creator or marketplace uses an HTTP URL as the canonical reference for an NFT, whatever is stored on that URL can eventually be changed. Storing the NFT’s data as an IPFS hash is generally regarded as more secure, but it isn’t bulletproof, as the IPFS node can still get disconnected from the network.
Although there is no way to guarantee your NFT’s data won’t eventually disappear, it is best to buy from projects that minted their NFTs on a service that uses Pinata or Infura. These IPFS services allow the marketplaces to “pin” the data, meaning the service views the data as important and won’t remove it if the node is near its limit.
How to Make Money from NFTs
The most common saying amongst the NFT community on Twitter is DYOR (Do Your Own Research), and the following is by no means financial advice. With that said, even though there are several ways you can try to make money from NFTs, nothing is guaranteed. When selling anything, raking in a massive profit is never a given.
So you’re wondering how to make money from NFTs? The answer will depend on who you are and what your goals are. If you’re a digital artist, photographer, or musician, then the most natural answer would be to create NFTs from your creations and promote them.
As a creator, you can also monetize your NFTs by taking advantage of one of the best parts of NFT platforms: royalties on secondary sales. Royalties have traditionally been a huge issue in the artist industry, where the creator often would not receive the royalties promised.
Royalties can vary from 5% to 15% depending on the platform. So if your NFT becomes highly valued amongst collectors, it can be resold multiple times, and you can benefit every time it is resold, especially if it is resold for a higher amount each time.
If you’re not a creator and you’re wondering how you can jump in and make money from NFTs, you can: flip collectibles, loan NFTs, or create a fractional NFT.
Flipping collectibles is very risky, and there is no manual or science behind the art of flipping. The best way is to be active in the NFT community on Twitter and get to know the NFT space well before making rash decisions.
All NFT projects will tell you they’re the best, so it’s tempting to buy in, but it’s best to follow legitimate accounts of NFT enthusiasts who’ve been in the space for a while and get some tips from them. However, many will try to sell whatever NFT they buy to their audience to pump the price and then dump the NFT, resulting in you losing money. So yes, flipping collectibles is risky business but can be rewarding!
Loaning Your NFTs – The most popular example of this method is with the popular blockchain game Axie Infinity. In 2021, many holders of Axie NFTs would loan them out to players and get paid back in Axie’s in-game currency $SLP. Several NFT platforms have also launched which allow holders to use their NFTs as collateral for loans.
Fractionalizing a high-profile, blue-chip NFT worth a lot of money, can be another potentially lucrative approach as it brings liquidity to the market. By splitting the NFT into thousands, millions, or billions of tokens, many people can purchase and own parts of the NFT.
If the approach is successful and there is enough interest, this can raise the value of the NFT to extremely profitable numbers.
How to Check NFT Rarity
The rarity level of an NFT is one of the first things that buyers usually want to know when considering what NFT to buy. Although the value of NFTs is highly speculative, this is one of the factors that we can easily check that contributes to the price of an NFT. Collectors like to show off their unique and rare NFTs as a type of status symbol and, of course, for the thrill of knowing they own something more special than others.
Below are five tools you can use to check NFT rarity.
Rarity Tools
Rarity Tools is the most well-known website for checking an NFT’s rarity. Not all projects are on the website, but many are. Simply search for the project and the NFT’s ID number (ex: CryptoPunk #5522). You’ll be able to check the NFT’s rarity rank and details of its traits, as well as other information about the project such as total sales volume and average prices.
Rarity Sniper
Rarity Sniper also has a large list of NFT collections across a few blockchains. In addition to using the website, you can also use their Discord channel to check the rarity of your NFT. To check an NFT’s rarity on Discord, you’ll need to use the bot command, which you can find in the channel. After entering the NFT’s details in the bot command, you’ll get an instant reply in the channel showing the NFT and its rarity ranking and other details.
NFT Stats
NFT Stats is a great platform for getting an overview of the NFT market. It shows which NFTs are selling, which are not, trading volume in the last 24 hours, the latest record NFT sales, and more. There’s also an NFT Rarity Explorer tool for filtering NFT collections and discovering rare NFTs. It shows a rarity score based on the rarity of the NFT’s traits.
Traitsniper
Traitsniper works a bit differently from the other NFT rarity tools, as it only shows NFT collections that have just been revealed or are about to be revealed. However, it is a great tool for checking details such as the floor price, royalties, and where to find the project (such as Discord, OpenSea, etc). There are both paid and free versions, with the paid one offering extra perks and more information.
HowRare.is
HowRare.is is an exclusive platform for Solana NFT collections. It works like the other rarity checking platforms; simply search the NFT collection you’re interested in and then enter the ID of the NFT you want to buy to find out how rare it is. The website also lists other details such as upcoming drops and details of the latest sales.
How to Know if an NFT is Authentic
Blockchain technology and NFTs can prove authenticity and ownership of a creator’s work. Still, one big issue NFT buyers face is determining if the NFT they’re purchasing, especially when it comes to artwork, is authentic. While the token’s metadata is unique and authentic, it doesn’t prove that the token’s content is also authentic.
Luckily, there are several precautions you can take to check if your NFT art or collectible is the real deal. They’re not fool proof, but they will most likely help you identify whether the content is fraudulent or not.
Check the Social Media Presence of the Creator
This is one of the best ways to gauge whether the NFT you’re buying is legit. Most creators are active on at least one social media profile, so make sure to check their accounts and see what kind of artwork they have been posting lately. You can also read the comments on posts to see what people are buying. Also check to see that the account selling the NFT is not a fake account of the real artist. Fraudulent accounts will often not have a following and not engage on social media much.
Reverse-Check Images on Google
If you’re purchasing an NFT with an image, you can do a reverse search on Google to check if similar images exist and the date of when the file was first uploaded. To do this, upload the image into the search engine if you’re using a desktop. You can also check through your mobile by copying and pasting the image’s link into the search bar.
Discern if the NFT is Priced Correctly
If you’re purchasing an NFT artwork that is supposed to be worth a lot more but is priced very low, you’re probably not getting a bargain but a plagiarized piece. Double-check to see that the price is fair, and get to know the artist’s works and general prices before purchasing.
Check if the NFT is Sold on Other Blockchains
This can be difficult to figure out, as there are many different NFT marketplaces on various blockchains, and fraudulent accounts can use different hashtags so you don’t find the same NFT elsewhere. But, it is worth doing a quick check to see if the same NFT is sold across various platforms. Most legit artists stick to selling the same piece on the same blockchain, and if it is a 1/1 NFT artwork, they will sell it on one NFT platform only.
Track the NFT Metadata and Transaction History
You can also look into the transaction history of the seller and owner from who you want to purchase an NFT. You can go to the NFT’s smart contract and click on “Details” to get information on the NFT’s token ID, the NFT’s metadata status (should either be ‘edible’ or ‘centralized’), the blockchain that the NFT is on, and contract address of the collection.
As each NFT has a unique ID, you can use the number to search the marketplace archives to check for any suspicious activity from this address and see past activities. The marketplace archives will give you an idea of how legit the owner and seller are (but remember, this will only show you the activity of the account associated with the NFT, and not necessarily any unique information on the owner).
There are several other methods to check the authenticity of an NFT, but they are more technical and complicated. They include using an NFT verification service, verifying NFT ownership through a digital certificate, and using the ID of the NFT to check if you can sell the NFT.
Are NFTs Here to Stay? The Future of NFTs
Are NFTs here to stay and what does the future of NFTs have in store for us? NFTs have seen a massive boom over the last few years, leading many people to ask what their future holds. Due to numerous rug pulls, scams, and overinflated value, NFTs have had a contentious rise to popularity. Still, just because there are bad actors in the NFT ecosystem doesn’t mean they aren’t a promising technology. To understand the future of NFTs, you first have to understand their journey so far, their proposed utility, and their possibilities.
NFTs so far
Colored Coins are often considered to be the first NFTs. Colored Coins were first released in 2012 and represent physical assets like coupons, real estate, digital collectibles, equity, and more. Although many people point to Colored Coins as the first NFTs, they aren’t NFTs literally.
Quantum by Kevin Mccoy is considered by many to be the first real NFT. The work was first minted in 2014 and was sold for $1.47m at Sotheby’s “Natively Digital” auction in June 2021.
Two of the most notable early crypto projects are CryptoPunks and CryptoKitties. CryptoPunks is a series of 10,000 unique pixelated characters with specific “traits” that contribute to their rarity. Traits are now a standard piece of nearly every popular NFT series. They often involve hats, colors, accessories, and other features that appear a specific number of times within a given series. NFTs that have less-common traits are often regarded as more valuable.
CryptoKitties is perhaps the first NFT series to introduce gamified elements to their project. Buyers were able to breed new kitties by combining kitties they’ve purchased, giving users something to do with their assets besides simply owning or selling the NFT.
Many naysayers consider NFTs scams, and it is hard to say they don’t have a good reason for feeling this way. There have been countless projects that have popped up and disappeared in a month or less, leaving buyers with worthless digital assets. Still, the technology is relatively new, and as people learn how to distinguish legitimate projects from potential scams, we’ll likely see fewer bad actors in the ecosystem.
What’s the point in NFTs?
NFTs are primarily used to represent a specific digital or physical asset ownership. Gaming is a prime use case for NFTs, as many games allow users to purchase skins, outfits, and weapons for their characters. By utilizing NFTs in a gaming environment, developers can allow players to own their skins and weapons outside of the actual game.
In essence, NFTs can be considered a simple purchase receipt. You could even use NFTs the same way you’d use a paper receipt at a store. For example, a clothing store could easily mint a receipt every time they sell a piece of clothing, in which case your receipt of purchase would be safely stored on the blockchain and easily accessible at any of their locations.
What might the future hold for NFTs?
The future of NFTs is largely dependent on where you live. The SEC is growing concerned that digital assets are often unregulated securities token offerings. It is uncertain what will happen, but the SEC has subpoenaed numerous NFT projects in recent weeks. These subpoenas could lead to fines, lawsuits, and a massive change in the future of NFTs in the United States.
Still, many countries have yet to regulate NFTs, meaning creators can express their creativity freely. Game developers are showing a growing interest in NFTs, and we could eventually see gaming NFTs that can be used in multiple games. For example, a developer could design a video game engine that allows people to use NFT-based skins, weapons, and items in any game created using that engine.
We’ll likely continue to see more controversy surrounding NFTs as well as more developments in the NFT art, gaming, and investing sectors. Additionally, major retailers are beginning to realize the utility NFTs offer. For example, Walmart is rumored to be partnering with Hedera to use their blockchain for NFT-based coupon offerings.
What is NFT Art?
NFT art is a digital token that exists on the blockchain and represents either a specific digital or physical artwork.
Every NFT is completely unique each token has its own unique metadata. So, an NFT is simply a token which is attached to an original artwork and is used to prove authenticity and ownership.
Unlike fungible tokens which all have the same value, such as bitcoin, NFTs (non-fungible tokens) all have a different value depending on what they represent. For example, an NFT ticket for a football game will have a different price to an NFT artwork by a world-renowned artist.
Almost anything can be tokenized and turned into an NFT, such as a tweet, a document, a ticket to an event, or a video. However, the most popular use cases for NFTs right now are art, in-game items, virtual land, music, and collectibles.
How Do I Become a Successful NFT Artist?
Many of the same rules that apply to becoming a successful artist in the traditional art world apply to the digital art world. There are many angles you can take to become a successful NFT artist. As with anything new, you’ll need to learn several other skills that you might not have yet, such as setting up a crypto wallet or engaging on Twitter with the NFT community.
Below we cover the 10 most important things you can do to become a successful NFT artist.
Choose Your Art Niche
If you haven’t discovered your art niche, this is a great first step before stepping into the world of marketing and selling your art. It’s important to know your personal style and stand out from the rest. Know your brand, message, and style.
Generally speaking, digital art is what most NFT artists sell. However, you can sell both physical and digital art as an NFT. You will need to take high-quality photographs of your physical art to mint as an NFT.
Whether you’re a digital artist, physical artist, or both, you need to decide what your niche is. Perhaps it is portraits of sports stars, anime, psychedelic art, or a specific abstract art style. Knowing your strengths, interests, and niche, will help you market your art and collectors will have a clear picture of what type of artist you are and what your unique creations are.
The Technical Part of NFTs
If you’re ready to start selling NFT art, you’ll need to get acquainted with the tech part of crypto wallets and minting NFTs. The process is fairly simple; the only tiresome part is setting up a crypto wallet, which may prove difficult for artists in parts of the world where many cryptocurrency exchanges are banned.
But there are two steps to take before you create your first NFT: buying crypto, and downloading a crypto wallet such as MetaMask to get connected to NFT marketplaces.
You can read the full step-by-step guide here on how to create and sell NFTs.
Choose an NFT Marketplace
There are two types of NFT stores: one is a general NFT store where anyone can sell their artwork, and the other is a curated store where artists have to be approved. Both have their pros and cons; what is best for you will depend on your goals and preferences. Most blockchains have their own selection of NFT marketplaces. The most popular and respected NFT art marketplaces are on the Ethereum blockchain.
You can see our in-depth guide on NFT marketplaces in the link below. Depending on what type of NFT art you’re trying to sell, the lists below will help you choose which one is the most appropriate for you:
A Comprehensive Guide to the Best NFT Art Marketplaces
Create a Collection
It’s a good idea to start with selling a collection of your artworks, anywhere between three to eight pieces. The collection should have a theme and a story. This way, collectors are encouraged to buy more than one piece from you since it is always nice to have the entire series.
Price Your Artworks
When pricing your artworks, keep in mind that you will have to pay for minting and gas fees (unless you use OpenSea’s gasless minting option). If you pay for minting and gas, you’ll spend anywhere between $50-$80 per piece, so your art would have to be priced significantly higher for you to make a decent profit.
If you have done little to nothing to build your personal brand, you may get lucky in making a couple of sales, but your career is likely to be short-lived. Price your art properly. Just because somebody else sold their CryptoArt for 1 ETH, doesn’t mean you will. You need to build your brand, and it takes time and effort.
Don’t try to sell the same NFT on multiple platforms for different prices, collectors will find out, and it will ruin your reputation. Start with reasonable prices (of course, don’t undersell either) and keep working on your art and brand.
Build a Community
Building a community is one of the most critical aspects of becoming a successful NFT artist; this will be part of building your brand. Just as in the traditional art world, you need to get the attention of buyers and collectors and make connections; you need to do the same in the NFT space. The sales will not come rolling in just because you made an NFT. It’s important to establish relations with others.
Take a look at the artists on marketplaces like KnownOrigin or MakersPlace, and follow the ones you resonate with on Twitter. From there, you will quickly dive into the rabbit hole through other people’s retweets and tags. Remember, talk to the people! Engage with the artists, fans, and collectors and build meaningful relationships. Join some podcasts and Twitter Spaces talks, and support other artists’ work. Comment on the artists’ works you like, share your ideas, and ask for feedback. Most of all, be nice and avoid the drama!
Build a Social Media Following
If you’re not leveraging social media yet, you’ll need to start getting active on there and build a following, especially on Twitter. Twitter is where most of the action happens, as well as on Discord groups and some relatively small communities on Facebook. Twitter is easier to start with and connect with others, and through Twitter, you can find which Discord groups to join. You can also join some Discord groups such as SuperRare, KnownOrigin, or Foundation, where you can meet other artists and ask questions.
Social media is a beast of its own but one of the best ways to get your art out there. Start with posting one to two posts every day and commenting on other people’s posts and asking for feedback. Some popular hashtags you can use are:
#NFT
#NFTs
#Ethereum
#NFTart
#NFTartist
#NFTcommunity
#NFTcollector
Creating your website is also a must so people can easily go and read more about your projects, art, and story. Creating a blog can also help with SEO and generating organic traffic. Adding links to the NFT marketplaces you sell your art on will also help people find your NFTs easier.
One way not to market yourself is by spamming links to your CryptoArt in a direct message; it’s lazy and will probably work against you. If you’re going to send a message to somebody about your art, engage with them. Personalize your message. Copying and pasting the same message without any personalization is also not good practice, as is relentlessly tagging prominent collectors or brands in your public posts.
Be Persistent, Be Consistent
Remember that the CryptoArt scene, and NFTs in general, are very new. Don’t get disheartened if you’re not successful right away or as quickly as you expected you would be. The community is very welcoming and eager to help each others ucceed. Keep creating, connecting, and showing your art to the world. Make changes where necessary, and don’t be afraid to ask for help. Stay true to your style and what you love creating, and don’t get discouraged when you see others making sales when you haven’t. Your turn will come!
Create Value for Collectors
The NFT art space is flooded with short-term, quick-flip projects that won’t have much value in the future. There is no straightforward answer to what collectors and investors want, but it’s safe to say they want to buy from artists who can market themselves and grow in the space and those who will be around long-term.It’s always a good idea to create value and interest by doing something special for long-term holders, such as special drops. Collectors also love scarcity and exclusivity, like knowing that they own a 1 out of 1 edition or a rare artwork that only has ten editions.
Some artists add utility to their NFTs by giving owners access to a metaverse event or a whitelist spot for another project. Another way of creating value is to share your knowledge and post interesting and helpful content for your followers, who will be happy to share it with others.
Can There be Multiple NFTs for One Piece of Digital Art?
Yes, artists can mint as many NFTs as they please for the same artwork. Of course, most usually don’t do that to keep the digital art piece scarce and rare, ensuring competition for ownership.
However, artists sometimes release limited editions, such as 10 NFTs of the same artwork or what is known as open editions. With open editions, there will be a time frame, for example, five minutes, during which anyone can purchase the artwork on sale, and there will be as many pieces minted as were bought in that time frame.
Open editions are generally considered to be less prestigious as there are a lot of people who will own the same NFT artwork, making it less valuable. So while you can launch multiple NFTs for the same digital artwork, there are pros and cons.
What are Fractionalized NFTs?
NFT fractionalization aims to allow multiple co-owners to have access to high-value, expensive, and unique NFT assets and belong to various people simultaneously. The owner of this NFT asset can create several tokens that are components of the original NFT and distribute them to interested parties.
Breaking down an NFT into smaller pieces makes it more accessible to those with less financial resources. Fractionalization is beneficial to investors and NFTs in general, as it adds liquidity to the market. A win-win atmosphere for all.
Asset fractional ownership isn’t a new concept. The concept has been successfully used in various industries, from real estate to fashion, and for various physical assets, including stock, designer items, and high-end assets such as yachts and private jets.
It is no longer news that some NFTs were listed and sold for huge prices, such as Beeple’s “Everydays — The First 5000 Days,” which goes for $69.3 million, “Human One” sold for $28.9 million, and “CryptoPunk #7523” sold for $11.75million. Given that many NFTs are sold for large sums of money, making it accessible to the average person is challenging; this has thrown the idea of fractionalizing NFTS, or F-NFTs for short, into the spotlight.
ERC-721 is the most common token standard for NFTs. To fractionalize the purchase on Ethereum, the NFT owner divides the ERC-721 token into numerous ERC-20 tokens. As a result, each ERC-20 token represents a percentage of the asset’s NFT.
Benefits of Fractionalized NFTs
Democratization
Smaller investors or investors with little financial resources may be unable to participate due to the high pricing of some NFTs. Fractionalizing a costly NFT lowers ownership expenses and barriers and opens it up to a wider group of investors. It’s also worth noting that when the price of an NFT rises, the value of all of its fractions rises, and if its value falls abruptly, the value of all fractions falls with it.
Liquidity
As it stands now, only a few handful wealthy investors have access to the most valuable NFTs. Because ERC-20 tokens may be freely sold in secondary markets, F-NFTs alleviate liquidity limitations for NFTs. Instead of waiting weeks or months for a single NFT to sell, many investors may be more eager to acquire fractions of an NFT right away, at a lower price, addressing market liquidity difficulties.
Collateral
Fractionalized NFTs can be used as collateral for a loan. Innovative concepts of earning through staking and yield farming are also possible with fractionalized NFTs.
A Word of Caution
Although we have outlined the benefits of fractionalized NFTs, please take heed that in some countries, such as the US, the legality of fractionalized NFTs is very much a grey area.
What are Token Standards?
If you’ve done a fair amount of NFT research, you’ve likely come across the term “token standards.” Token standards can be a confusing topic, but gaining a baseline understanding of them is easier than you may think. Learning more about token standards is an excellent way to familiarize yourself with NFTs.
What is a token standard?
There are countless cryptocurrency tokens available, with new ones popping up everyday. Many of these tokens use existing blockchains, such as the Ethereum blockchain. Token standards help ensure these newly-minted tokens are compatible with existing exchanges. These standards enable people to create, issue, and deploy new tokens based on a specific blockchain. Token standards are primarily used on blockchains that utilize smart contracts, as they’re a subset of smart contract standards.
What is a smart contract standard?
Smart contract standards are the specific rules that a smart contract must comply with to utilize a specific blockchain. Smart contract standards include token standards, name registries, and more. These smart contract standards enable smart contracts to communicate efficiently between various dApps.
Ethereum token standards
ERC-20: This standard allows for the creation of fungible tokens. It is the most popular token standard on Ethereum. Popular tokens like Shiba Inu, Tether, and ApeCoin were all created using the ERC-20 standard.
ERC-721: This standard allows for the creation of non-fungible tokens. It is the standard used for many of the most popular NFTs.
ERC-777: This is a fungible-token standard that improves upon the ERC-20 standard. This standard allows for sending tokens to a contract and notifying the contract in a single transaction, rather than requiring two calls like ERC-20. The ERC-777 standard also allows for enhanced privacy and fixes certain issues with decimals that exist with ERC-20 tokens.
ERC-1155: This standard helps save costs by allowing transaction bundling. This standard can be used for fungible tokens like Basic Attention Token and non-fungible tokens such as CryptoPunks.
NFT Scams and How to Avoid Them
Scams, rug pulls, and catfishing have become increasingly problematic in the NFT community. Both new and seasoned collectors have been the subject of big and small losses.
Below is a list of the most common NFT scams, how to avoid them, and some useful tips on how to stay safe. The scams below are all from experiences that NFT community members have shared. There are always new ones coming out, so make sure to stay safe and be alert.
Discord DMs
Watch out for: Brand, artist, and influencer impersonators and fake invites.
Avoid by: Never clicking on links regardless of their perceived legitimacy. Be weary of DMs from “friends” asking for money, or “announcements” from NFT projects (always check the group and ask in the group first). If you receive an odd message from someone you know, make sure it is them by checking their handle first.
Fake Twitter Personas
Watch out for: Fake influencer and brand profiles replicating original ones word for word.
Avoid by: Double and triple checking if it is the real profile. These fake accounts will message you pretending to be up for a chat or asking for help and advice on something.
Fake Marketplaces & Brand Impersonators
Watch out for: Almost identical URL links of fake marketplaces; this is a classic NFT scam. Usually there is only a one-letter difference between the fake and real marketplace that is easy to miss .
Suspicious-looking emails from big companies are another major red flag. These emails will look strikingly similar to the real deal, with minor link changes.
Avoid by: Observing the links and email a few times before clicking on anything asking you for personal information such as a seed phrase or password.
Artist Impersonators
Watch out for: Stolen artworks.
Avoid by: Checking if the artist is verified and/or has an active NFT community or presence in the NFT space.
Pump & Dump & Rug Pulls
Watch out for: The pump and dump scheme is a classic in both crypto and NFTs. This scam involves a person or, most likely, a group of people, purchasing a large amount of NFTs to manipulate the market by artificially driving demand up. Once the value has gone up, the scammers dump all their assets and rake in a sweet profit, leaving everyone else with worthless NFTs and massive losses.
Rug pulls are essentially a form of pump and dump schemes, but they can be hard to spot as there might be a genuine community around it, but once the NFTs have been sold and the money taken, the devs will disappear.
Avoid by: Check the transaction history. A genuine project should have a diverse range of buyers and not just a few buyers who are selling and re-selling. If you suspect you’re in a pump and dump project, try to get out as soon as possible.
Bidding Scams
Watch out for: False bids. So, you list your NFT for sale, and people bid on it, but here’s the catch – they bid in USDC. Instead of selling that sexy Bored Ape for 17 ETH, you end up selling it for 17 USDC.
A more recent NFT scam that popped up is people listing then immediately delisting and relisting with the decimal moved one place to the right.
Avoid by: Triple checking all parts of the transaction!
Catfishing
Watch out for: DMs prompting you to take some of action or sign up somewhere before they purchase your NFT. Catfishing may be particularly tempting for new artists, who haven’t sold anything yet, and someone comes with the promise of wanting to be their first buyer.
Avoid by: Blocking them and deleting them for good. Do not engage in any way!
Airdrops & Giveaways
Watch out for: “Free” airdrop messages popping up in Discord from a fake “verified” account of a well-known project or influencer.
Avoid by: Never click on any messages like that unless you have checked and confirmed it is from a real account.
There are many innovative scams, so make sure to never click on suspicious links or connect your wallet to an untrusted website, and never ever give away your seed phrase!
However, before you can hit that Mint button, there are a few steps you’ll need to take if you’re totally new to crypto and NFTs. So let’s backtrack a bit. In this example, we will use the most popular NFT marketplace, OpenSea, and how the process works on the Ethereum blockchain.
Step 1. If you don’t have a crypto account yet, you can create one on popular cryptocurrency exchanges like Coinbase or Crypto.com. Please note that these exchanges might not be available in some regions of the world; in that case, you can search for which crypto exchanges are available in your country. Once you have opened an account, you’ll need to purchase ETH (the native currency of the Ethereum blockchain).
Step 2: Download a crypto wallet such as MetaMask, Fortmatic, or TrustWallet. MetaMask is the most widely used wallet. Here are useful MetaMask FAQs. It is very simple to set up these wallets, simply follow the instructions listed on the wallet sites.
Step 3: Now that you have your ETH and crypto wallet ready, you can transfer ETH from your crypto account to your MetaMask wallet. You will need the ETH to mint your first NFT artwork. If you’re using Coinbase, you can read the following instructions on how to transfer ETH to MetaMask. This process is also simple, just copy and paste your MetaMask wallet address and send the money.
Step 4: Now that you’ve done all the boring tech stuff, you can finally move on to creating an NFT! The first step is to log into OpenSea (follow the instructions and connect your MetaMask wallet).
Once you have signed in, click on “Create” and go to “My Collections.” Now customize the collection by filling out the details such as name, description ,and adding a main image. At this point, you’re just creating a folder for your NFTs; this is not the part where you’ll be making an NFT.
Step 5: It’s time to create that NFT! Click on the blue button that says “Add New Item.” Now, you can upload your artwork, song, video, etc. You can add the name of your NFT, an external link to your webpage or more information about it, and a description. You can also choose what special features you want to add to make it more valuable and unique.
You can also choose whether to mint one NFT or many NFTs of the same art piece. Once you’ve filled out all the details, click on “Create” to get your NFT minted.