In the simplest terms, Non-Fungible Tokens (NFTs) are digital assets stored on a blockchain. Unlike traditional cryptocurrencies—which are often traded on decentralized exchanges—NFTs represent ownership of specific items, such as digital art, in-game items, music, and even real-world assets like land or property.
People are talking about the NFT marketplace because they offer a new way to store value and participate in the digital economy. While NFTs are still in the early stages of adoption, some NFTs are selling for millions of dollars.
We’ll walk you through how NFTs work, if they are right for you, some drawbacks to NFTs, and how to create NFT art.
How NFTs work
NFTs are a type of digital asset that allow for true ownership of digital items. NFTs are created, like cryptocurrencies such as Bitcoin and Ethereum, using blockchain technology. Each blockchain is unique—providing the asset with rarity and value—and prevents counterfeiting by providing a public record of ownership.
This allows for things like digital art (with file types like JPG, GIFs, or PNG), sound recordings, and other collectibles to be owned and traded in a way that’s similar to the physical world.
That being said, NFTs can be inherently risky. While the blockchain attached to an asset is unique, the asset itself can be copied. For example, a piece of NFT art is valued because of the uniqueness the blockchain gives it. But anyone with access to the internet who can view the NFT can also right-click and copy the image itself.
While NFTs certainly has a strong following, the ability to copy some of their essential components brings their value into question. As with any art, creators looking to get into NFTs should study the market and their audience.
At the same time, NFTs have some important benefits. For creators, one of the most important is the smart contracts that NFTs can be created with. When a traditional piece of art sells on the open market, the artist only benefits from the original sale. With NFT smart contracts, the creator can receive a percentage of every sale the NFT goes through.
To create, buy, or sell an NFT, you’ll need to use a special NFT marketplace that supports them.
Some popular examples include OpenSea and Raible. When you purchase an NFT, you’ll receive a digital certificate of ownership that’s stored on the blockchain. You can then hold onto it, trade it, or even sell it.
One of the first high-value NFT sales was Beeple’s “Everydays: The First 5000 Days,” which sold for $69.3 million in 2021. This sale brought NFTs into the mainstream. Since then, even Christie’s auction house has gotten into the NFT game, offering a platform for digital artists to sell their work through its new platform, Christie’s Encrypted.
The benefits of NFTs
Whether you’re interested in NFT art as a creator, an investor, or an art lover, there are a lot of good reasons to create and purchase these digital assets.
Unique and collectible
NFTs are stored on a blockchain, which is a decentralized ledger that records transactions. The code behind the blockchain means that NFTs can never be fully replicated. Although the value of an NFT is subjective, some have sold for thousands of dollars or more due to their rarity.
Resellable
NFTs are resellable and tradable. Owners can sell NFTs to others, or if they’re interested in collecting multiple pieces of art or digital assets, they can trade them with other NFT owners.
Easy to authenticate and verify
It’s easy to authenticate and verify NFT digital files, as the blockchain technology records all transactions, providing a history and proof of ownership. The works themselves serve as digital records.
Smart contract royalties
Creators can code NFTs with smart contracts that give them royalties each time the NFT is sold. Smart contracts are made when the NFT is minted and become an immutable aspect of the NFT’s code. For creators, the ability to code royalties into their art means they will receive a share of each sale on the open market—a substantially different way of doing business than traditional art.
The market is on the rise
The NFT market is still in its early stages but is growing rapidly. According to Chainalysis, over $37 billion went toward NFT marketplaces as of May 1, 2022—in just a few months, nearly matching the total of $40 billion in 2021.
Drawbacks and risks with NFTs
NFTs are not without their drawbacks. When considering NFTs, it’s important to be aware of the potential risks.
It’s a volatile market
The NFT market is volatile and subject to sudden change. While there are trends and people have made money trading NFTs, their value can fluctuate quickly.
You might not sell your art right away
If you’re an artist creating NFT art, there’s no guarantee that you’ll find a buyer right away. It may take some time to build up interest in your work before someone is willing to pay for it.
It’s easy to find headlines about NFTs selling in minutes for thousands of dollars. This isn’t the reality for every digital asset on the market, though. How quickly your NFT sells will depend largely on its perceived quality and how well it’s marketed.
It’s still a confusing concept for many
Even though NFTs are growing in popularity, it’s still a confusing concept for many people. In fact, 12% of respondents to a recent poll incorrectly thought NFTs were a form of cryptocurrency; only 26% chose the correct definition on a multiple-choice questionnaire.
While NFT art is trading in the billions of dollars, the concept is still gaining traction. This lack of understanding could limit growth, as people are hesitant to invest in something they don’t fully understand.
Negative environmental impact
The environmental impact of NFTs is a major concern for some people. The energy-intensive process of minting an NFT can result in a large carbon footprint.
Creating and selling NFT art produces a significant amount of greenhouse gas emissions. If you’re concerned about the environment, this is something to consider before buying or selling NFTs.
Potential for theft and copies
Although the blockchain technology of each digital asset can’t be duplicated, the images themselves can still be copied.
OpenSea, one of the largest NFT marketplaces, said that more than 80% of the NFTs created using their free minting tools were plagiarized, fake, or spam works.
7 steps to create and sell NFT art
Are you ready to get started with creating your own NFT art? Follow this step-by-step guide to get started:
1. Decide on a concept
Before anything else, determine a concept for your art. Research trending NFT art styles to decide on one that fits your idea. Options include pixel art, cartoons, 3D characters, realistic art, freestyle pieces, and vector art.
Keep in mind that what you choose to create will affect what crypto wallet or NFT marketplace you use. For example, if you want to create a 3D model, you’ll need to use a marketplace that supports 3D files.
If you’re not sure where to start, check out the NFT services offered through Project Catalog™ to get your NFT collection started.
2. Choose your blockchain
Next, choose a blockchain technology for creating and developing your NFT. This is an important step, as it impacts how customers interact with your art.
Blockchains—which are used to create cryptocurrencies—are incorruptible and can be distributed across a wide range of networks. Because all the data recorded on the blockchain is verified by computers on each network, this makes the technology a transparent and secure way to share your work.
There are many blockchains platforms to choose from for NFT development, including:
- Bitcoin
- Ethereum
- Tezos
- Polkadot
- Cardano
- Solana
- Polygon
- Binance Smart Chain (BSC)
Do your research to pick the one that best serves your project. Things to consider when reviewing each type of blockchain are transaction speed, security of the technology, scalability, functionality, and transaction cost.
3. Set up a digital wallet
Before you can start creating NFTs, you’ll need to set up a digital wallet. A digital wallet is like a bank account for cryptocurrency that stores your public and private keys. These keys are what you use to access your NFTs.
You’ll come across two types of accounts to consider.
- Self-custody wallets are considered the safest wallet account type, as users have complete control over private keys.
- Custodial wallets operate through a third party.
Take a look at some of the best crypto wallets for storing and exchanging NFTs and other digital assets.
- Math Wallet. This wallet supports more than 70 blockchains. It also provides users with its own utility token to access multiple marketplaces to sell your NFTs.
- Coinbase Wallet. This wallet lets holders use cryptocurrency like Ethereum (ETH) coins to buy and sell NFTs. It’s easy to access by mobile app.
- Trust Wallet. This wallet, part of the Binance Smart Chain, uses Ethereum/Ether crypto to hold and sell NFTs, game assets, and other digital assets in one place.
- Enjin Wallet. This NFT platform allows users to easily launch NFT projects from start to finish and easily store digital assets.
- Kukai Wallet. This Tezos-based digital wallet lets users safely import existing wallets through Twitter, Reddit, and Google.
- Alpha Wallet. As an open-source crypto wallet, this mobile-only platform lets you store and manage your NFTs using Ethereum (using the Ether (ETC) cryptocurrency) and offers enhanced security.
- Metamask Wallet. This app allows you to use the Ethereum blockchain and other marketplaces to purchase or sell NFTs.
- Coinomi. As a multi-chain wallet, this platform is designed for mobile devices and desktop computers and supports more than 125 blockchains and thousands of smart chain tokens.
4. Select the right NFT marketplace for you
After you’ve chosen a blockchain, it’s time to select an NFT marketplace. This is where you’ll create, issue, and sell your NFTs.
Each marketplace has different rules and requirements, so be sure to review these before getting started. Each offers users something different, and you’ll need to do some research and choose the best one for your particular NFTs.
Some things to consider are the token standard used by the platform, its verification process for users, whether it has a price discovery feature, token fractionalization, wallet compatibility, and other incentives and features.
Some of the most popular NFT marketplaces include:
- OpenSea. This is one of the largest NFT markets and also works with the widest range of digital assets.
- Raible. This marketplace has made a name for itself by working with big companies like Taco Bell and Adobe. There are also a lot of similarities to OpenSea as far as size and scope.
- Mintable. This platform is easy to use, which is helpful for those new to NFTs. It also allows you to mint NFTs through a simplified process, making these digital assets more accessible.
- Foundation. This platform is also known for its simple format and ease of use. It’s also a marketplace that’s on the rise, with more than $100 million sold in NFTs in the past year.
As you mint an NFT, you can also create them with smart contracts. This requires a more advanced level of technical knowledge, but many NFT marketplaces help with this process.
5. Promote your NFT
Before you create and mint your NFTs, it’s time to start promoting it. After all, what good is an NFT if no one knows about it? There are a number of ways to get the word out and get people interested in your NFTs.
- Create a website. This is a great way to show off your NFTs and give potential buyers more information about what you have to offer.
- Use social media. Platforms like Twitter, Instagram, and YouTube are great places to share news and updates about your NFTs. Be sure to start promoting before your NFT is minted to build excitement and stay consistent with promotion to establish your NFT after it’s on an NFT marketplace.
- Start a blog. A blog is another excellent way to share information about your NFTs and connect with potential buyers.
- Join Discord servers. This can be a great way to find an audience that might be interested in your NFT project.
- Collaborate with others. Bringing a social media influencer or brand on board can help further your reach.
- Participate in online communities. There are several online communities dedicated to NFTs and digital assets. These are great places to connect with others in the industry and learn more about what’s going on in the world of NFTs.
- Write a press release. Send out a press release to newspapers, magazines, art journals, and other publications targeting your desired audience.
- Hire help. Hire an independent community manager through Upwork to create a digital campaign for your work and build an online following.
- Hold an auction. Auctions are a great way to generate interest in your NFTs and also give potential buyers a chance to get their hands on your digital assets. Look into digital art online auction platforms like Nifty Gateway.
6. Upload and mint your art token
Once you’ve selected a platform, you’ll need to mint your art token. This process will create a unique digital asset that can be sold or traded on the open market. Minting your art token is simple with the help of an NFT marketplace like OpenSea. All you need to do is create an account and connect it to your wallet. Then, you can upload your artwork and mint your tokens.
When you mint an NFT, you have to pay a fee called “gas.” This gas is used to pay the miners who process and confirm your transaction. The gas fee is calculated based on the amount of data in your transaction and the current gas price.
The gas price is set by the miners and can fluctuate depending on network conditions.
7. Price the token and list it for sale
After your art token is minted, it’s time to price it and list it for sale. This is where you’ll need to do some research to find out what similar NFTs are selling for. You can also use this opportunity to set a price that you think is fair.
As you list your NFT, consider the costs associated with creating the piece. Between listing and commission fees, gas fees, and other costs, it could cost about $250 to create and list your NFT. These transactional fees should be built into your price.
Similar to a platform like eBay, you can typically choose to list your NFT art for a fixed price or auction it, allowing buyers to make bids.
Consider the true value of your artwork and current NFT art trends, as well as your personal goals. If you’re hoping to sell your piece of art quickly, your pricing strategy will be different than if your goal is to create a high-value NFT.
Ready to get started with NFTs? Connect with experts at every stage
NFTs are a new way to sell your artwork. By creating an NFT, you can mint a digital asset that can be bought, sold, or traded on the open market. The possibilities for NFTs are still being explored, but proponents believe they have the potential to change the way we interact with digital content.
As an artist, you may need to outsource some work to complete a digital art or NFT project. The good news is that there are freelancers out there who can help. Check out the talented professionals offering NFT services, including developing and minting NFTs, through Upwork.
If you’re an NFT expert, Upwork’s platform allows you to share your talents with the world.
