In Part 1, we discussed what cryptocurrency is, demystified the blockchain, and defined the difference between proof-of-work and proof-of-stake verification methods. In Part 2, we discussed what mining is, how to invest in cryptocurrency, and how to use it in the real world. In Part 3 we discussed the difference between fungible and non-fungible tokens as well as how to buy an NFT and the impact NFTs have had on the creative industry. If this sounds familiar, keep reading. If not, click here to read Part 1, here to read Part 2, and here to read Part 3!
Perhaps on a family vacation or a school trip, you visited the United States Mint Headquarters. You watched as thousands of circles of metal became pennies and dimes and nickels and quarters, and in one instant, what once contained little value was replaced with the value of money. When an artist mints an NFT, a similar process occurs. What was once a sketch living in the abyss of Procreate, is now something worthy of being purchased, exchanged, and sold.
To mint something, whether that be a coin or an NFT, is to produce something for the first time. When an artist mints an NFT, they are transforming their work into an NFT for the first time. What does this process look like? Well, it does not have its own museum like coins do. In fact, minting an NFT is an entirely digital process that lives on the blockchain. Let’s assume you are an artist interested in minting your NFT. Here’s what you would need to do:
First, you will need to purchase cryptocurrency, possibly Ethereum as this is the most common cryptocurrency associated with NFTs. To buy cryptocurrency, you will need to create an account with a cryptocurrency exchange that is compatible with the blockchain you will be interacting with, most likely Ethereum. You will then need a wallet to store your cryptocurrency and that wallet can be hot (stored online) or cold (stored offline). Both the wallets are digital, and what is important is again ensuring that your wallet can hold the cryptocurrency of your choosing.
Second, you will need to decide which NFT marketplace you want to sell on. There are a few marketplaces namely, OpenSea, SuperRare, and Rarible. Keep in mind that NFT marketplaces do not operate like EBay or any online ecommerce website. Since NFTs operate on the decentralized blockchain, there is no regulating body to oversee the operations of the marketplace. While choosing your marketplace, make sure to research how that marketplace is governed, specifically what intellectual property rights will be afforded to you as an artist in the space.
Third, you will connect your wallet to the NFT marketplace you have selected. You will do this either by downloading your wallet onto your computer or you will connect your wallet via a QR code. Once your wallet is connected, you will now be able to create an artist profile which can include information about yourself, your art, and you can even add links to your website/social media pages. In addition, you’ll want to specify which cryptocurrency (probably Ethereum) you will accept as payment when someone purchases your NFT.
Fourth, you will finally create your NFT! If you navigate to the homepage of the marketplace you chose to sell on, there should be a button or section that allows you to create and mint your NFT. In the minting process, you will need to upload your digital asset, which could be anything from an image, an article, or a video, you’ll give your art a name, and then add a small description of the piece for your buyers to better understand what they could be purchasing. In addition, you will also specify how much you would like to receive in royalties if your NFT is sold over and over again. Lastly, you will need to pay a transaction or “gas” fee in cryptocurrency to put your NFT on the market. Again, this charge will probably be in Ethereum. For some marketplace such as OpenSea and Rarible, you may not need to pay a gas fee at all as these companies prefer “lazy minting” which means that when your NFT is sold, the purchaser incurs the cost of both the NFT and the gas fee.
Before you run to mint an NFT though, keep in mind the volatility of Ethereum. One day, Ethereum may be worth much more than it was three days ago. This change in value can cause the minting process to be costly or cheap. If the marketplace you are using does not use lazy minting, and instead you are incurring the gas fee, you may spend $50 minting your NFT one day, and $500 minting it next week.
What are some NFT’s you might see on the marketplace? There are a few key players including CryptoPunks and Bored Ape Yacht Club, but there are also quite a few individuals who have listed NFTs as a method to raise money for causes they care about. One such NFT is Fortuna, which mints NFTs that portray an array of confident female characters with the mission to diversify the metaverse and empower womxn. The artists apart of Fortuna are all female identifying and have drawn for companies such as Nike and Disney. Portions of Fortuna’s sales are being used to help build a shelter for abused Womxn through the organization Beleza Escondida which aims at combatting femicide and protecting Womxn in Brazil.
NFTs are the cornerstone of the centralized and decentralized world. The metaverse has created a place for artists to share their works and for everyday people to take part in building and strengthening this new creative industry. Whether you are an artist or a buyer, NFTs are your ticket to this virtual realm of possibility.
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