From a $69 million piece of artwork to a $379,000 song created using the genetic sequence of COVID-19, NFTs are the Internet’s latest obsession. And they have the potential to make real money, too— the CEO of crypto exchange Coinbase said last month that the NFT market could quickly surpass the company’s cryptocurrency trading business. So how can someone get in on the action? Here’s what you should know.
What even is an NFT?
NFT stands for non-fungible token, which basically means that it’s a one-of-a-kind digital asset that belongs to you and you only. The most popular NFTs right now include artwork and music, but can also include videos and even tweets.
NFTs can be individual, or they can be part of a collection, which can also allow their owners to feel as though they are joining an exclusive online community. One collection, called the Bored Ape Yacht Club, is made up of 10,000 NFTs that look like drawings of, you guessed it, bored apes. But whoever owns one of them also gets to be part of a new kind of exclusive society, and members (owners of the ape NFTs) include Jimmy Fallon, DJ Khaled, Steph Curry and Post Malone. To own a Bored Ape Yacht Club NFT, you’ll need to pay at least $200,000.
Sounds cool, how do I make one?
After you have your wallet, you’ll need to buy some cryptocurrency, like Bitcoin, Ether, or any number of others. You can buy that through a crypto wallet company using U.S. dollars or another fiat currency.
Now, choose what you want to turn into your digital asset—that could be a JPEG, MP3, GIF, or any other multimedia file type that will be uploaded to an NFT marketplace.
You publish an NFT to blockchain via an online marketplace. The most popular online marketplaces to mint and sell NFTs include OpenSea and Rarible. There are usually “gas” fees you have to pay, something that marketplaces charge users for some combination of making, publishing and selling an NFT. You’re basically paying the marketplaces for the computer power used to fuel transactions on the blockchain. But sometimes these fees can reach hundreds of dollars, so watch out.
You’ll still have to pay a one-time fee to initialize your account on each of those marketplaces, which could cost hundreds of dollars. OpenSea and Rarible will both charge a 2.5% fee from your NFT sales, although they are still widely used because they don’t charge “gas” fees, meaning it’s free to mint the NFT. The buyer pays the minting fee.
I’m intrigued. Where do I begin?
If you’re still looking to dip your toes into the world of NFTs, artists who have previously minted their own NFTs advise that you start with something that’s fun and meaningful to you.
“My hopes for the NFT market is for it to become even more accessible for all sorts of creators—artists, musicians, game developers—to be able to share their stories and support themselves on their work,” Amber Vittoria, an artist known for her abstract and colorful NFTs that sell for up to $834,000, told Fortune. “My advice for folks newly entering the space to sell their creations as NFTs is to not be afraid to ask questions, experiment, and to enjoy the process.”
Another artist named ArinaBB, who has been making NFTs for about a year, added that the rapid evolution of the market can be both “a blessing and a curse,” and that there are some essential safety tips that beginners should be aware of.
“Never click on unknown links even if they seem familiar. Do not download files from strangers,” ArinaBB told Fortune. “Listen to NFT Twitter spaces, follow people, talk, make friends. Make sure you have a basic understanding of how things work before you start investing large sums of money.”
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