Creating NFTs, An Easy How To Guide

Nonfungible tokens, or NFTs, are digital assets that live on a blockchain... a digital public ledger that allows all NFT transactions to be tracked and verified.  

Every NFT is a digital file... you need to have a file in an acceptable format. As long as they are under 100MB, the following formats are normally accepted among marketplaces and blockchains:  JPG, MP3, MP4, PNG, GIF, WAV, OBB, GLB, SVG.

NFTs exist on a blockchain, which is a decentralized public ledger  allowing for information to be recorded and verified, without any  capability of being edited. A large majority of NFT platforms are built on the blockchain  Ethereum, such as OpenSea, Foundation.  Ethereum is an open-source blockchain with smart contract  functionality, and it's known for its fast transaction times.  Each  blockchain has its own native currency as well — Ethereum's is ether (ETH). 

When you're involved in cryptocurrency and digital assets, you  need a crypto wallet. A crypto wallet is software or hardware designed  to hold, send or display cryptocurrency and NFTs, and most are free to  use.  When you make an NFT, there's a transaction fee for putting the  digital file on the blockchain, so you'll need some crypto in the wallet  to cover that fee. In terms of what cryptocurrency you need, it depends  on the blockchain. For example, Ethereum transaction fees (called gas  fees) are paid in ETH.  There are many different wallets to choose from. However, the  marketplace you choose to mint your file on may require a specific  wallet. Some popular wallets include MetaMask.

There are also different types of wallets: 

• Hot wallet — Involves downloading a browser extension,  is always online and typically free software. May be more prone to  online hacks, though.
• Cold wallet — External hardware that's only online when  plugged in, and could run you between $80.00 to $200.00 or more. More secure  since they're not always online, but may be a hassle for users that  prefer mobile trading.
• Custodial — A wallet where a third-party holds and protects your wallet's private keys for you.
• Noncustodial — You're in control as to how and where your private keys are stored.

 To tokenize a digital file and put it on a blockchain, you have to pay a gas fee to finalize the transaction.  Gas Fees s*ck but what are you going to do?  Think of them, as a tax.

Depending on the marketplace you choose, you need some type of  cryptocurrency to cover the gas fees. These fees vary by the second.

Buying cryptocurrency starts with having a wallet and finding an  exchange. Exchanges vary in what coins they offer, but you can count on  almost every one having Bitcoin (BTC) and ether (ETH). Once you're  signed up with the exchange and connect your digital wallet, simply  deposit funds in the approved methods and select the currency you want.

Once you have a wallet and connect it to the marketplace of your choice, you can start the process of minting your NFT. Most marketplaces are clear on where to go to mint an NFT, with clear buttons like Create NFT or Mint NFT. Common steps in minting an NFT include: 

• Creating an account with the marketplace
• Uploading your digital file
• Completing the details of the NFT, like title and description
• Paying the gas fee as needed for interacting with the blockchain

Once the file is minted, the NFT is either held in your account with the marketplace or sent directly to your crypto wallet.

You still with me?  You have come a long baby... yes... all this way to make your NFT, the next step is to figure out what to do with it.  Many NFT creators get into the space to earn money from selling  their NFTs. The simplest way to do that is by minting the NFT on a  blockchain with smart contract functionality so you can earn royalties  on subsequent sales. Before you choose a marketplace, compare royalty  percentages so you can get the most bang for your buck.  However, try not to set the royalty percentage too high — such as  higher than 35-40% — so that buyers and sellers see resale value in your  NFTs.  Consider these use-cases for NFTs: 

• Selling — You can list your NFT for sale on a  marketplace. Many marketplaces have multiple selling methods, or at the  very least, fixed sales or auction sales. 
• Flipping — Some NFTs can appreciate in value, dependent  on many factors like rarity, creator ethos and ownership history. You  can try your hand at buying and selling NFTs in hopes to earn. 
• Use in the metaverse — Metaverse games like The Sandbox  and Decentraland allow players to make their own digital assets to be  used in the game. A metaverse game may have its own creation software so  users can create NFT wearables, furnishings, avatars, usernames and  more to be sold on the marketplace. 
• Create collections — Collections are very popular in  the NFT space. Large NFT collections typically follow a theme but have  varying attributes, rarity and features. Bored Ape yacht Club and CyberPunks are famous examples of 10K NFT collections. 
• Display — You can display your NFTs in your crypto  wallet, use them as a profile picture on Twitter, or even curate your  own NFT art collection in the metaverse. 

 One of the most important steps in creating an NFT is choosing a  marketplace. Check that it sells your preferred NFT category, has a  reputable blockchain and offers the royalty percentage you want. Examples... OpenSea, SuperRare, Nifty Gateway.

Making an NFT means paying transaction fees for interacting with  the blockchain. When you're dealing with NFTs, expect to pay a gas when  buying, selling, minting or listing an NFT. This is fee is paid in the  blockchain's native cryptocurrency.  A gas fee is like a processing fee. The fee is used to power the  blockchain and keep things moving. Processing transactions on  blockchains requires power, so those interacting with the blockchain pay  a fee.  Gas fees can vary depending on the time of day, the complexity of  the transaction, congestion of the network and the processing speed. A  single transaction could cost you anywhere from $1.00 USD to $1,000 USD, depending  on which blockchain you choose and the previously mentioned factors.

Keep these tips in mind when making NFTs: 

• Want lower gas fees? When minting and listing NFTs, gas  fees are part of the gig. For a chance at lower gas fees, consider  minting and listing your NFTs during the blockchain "slow time." For  example, Ethereum's slowest, cheapest time is the weekend. 
• Gasless minting. Some marketplaces, like Mintable,  allow for lazy minting, or gasless minting. This means that minting your  NFT doesn't cost any gas fees upfront, and the file is placed on the  blockchain once the asset is sold, and the buyer pays this gas fee.  However, there is usually a higher marketplace fee with gasless minting.  
• Keep your wallet safe. Crypto wallets are protected by private keys or passphrases. Never give  out your wallet's private keys to anyone for any reason. If someone  were to get a hold of that information, they could take your stored  digital assets. Your wallet's public key is all that's needed to send or  receive digital assets. 
• Copyright laws. Be sure that when you're creating NFTs —  that you're not  infringing on someone else's intellectual property, purposefully or  accidentally.  If you're hiring a designer, you may need to purchase the  copyright and intellectual property rights along with the design.
• Read the fine print. As a creator, read your chosen  marketplace's terms on the royalty percentage you earn with each sale of  your own NFTs.  Some marketplaces may give you less than 10%.
• You may not earn. Creating an NFT doesn't guarantee  that you'll make money. The value of an NFT is largely determined by  consumer interest and the value of cryptocurrency, and once you list an  NFT, there's a possibility that it may not sell right away or at all.

Cryptocurrency and NFTs are high-risk investments.  Especially with crypto that some compare to a grand ponzi scheme. Just as with stocks don't gamble more than you can stand to loose.  NFTs are fun and can become a worthwhile satisfying hobby.