[South China Morning Post]
Non-fungible tokens (NFTs), data stored on a blockchain that guarantees a digital item’s ownership and uniqueness, exploded into the mainstream last year, driven by the belief that people want to own, showcase and trade their digital assets in the virtual world.
Cartoon profile pictures took over social media platforms, major brands and celebrities snapped up virtual property in virtual worlds, and digital artworks sold for tens of millions of dollars. Months into the NFT boom, some are already complaining of NFT fatigue, and it is becoming increasingly difficult for new projects to stand out from the crowd, especially if they lack a good story or marketing prowess.
But NFTs are more than get-rich-quick schemes. For creators who want to start dabbling in the world of digital assets, here is a quick beginner’s guide for minting an NFT, which means adding the data of a digital file to a blockchain.
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That may already sound confusing, but NFT marketplaces have made the experience fairly easy, and in this explainer we will use some of the more popular platforms as examples.
What kind of NFT would you like to create? While some of the most popular projects feature cartoon avatars, almost any digital file format can be turned into an NFT, including GIFs and various audio and video formats.
In September, renowned Hong Kong filmmaker Wong Kar-Wai turned never-before-seen footage from his critically acclaimed 2000 film In The Mood For Love into an NFT that was auctioned by Sotheby’s. Musicians have launched NFTs of their singles and music videos. A still image can also be made into an NFT, such as a work of digital photography or a digital image of a poem.
Before proceeding, do make sure that it is your own creation or something you rightfully own.
An illustration picture taken in London on December 30, 2021, shows a Non-Fungible Token created by digital artist Zamblek on the Binance NFT marketplace, displayed on a mobile phone. Photo: AFP alt=An illustration picture taken in London on December 30, 2021, shows a Non-Fungible Token created by digital artist Zamblek on the Binance NFT marketplace, displayed on a mobile phone. Photo: AFP>
Step two: Decide on a marketplace
There are many marketplaces that allow you to discover, buy and sell NFTs, but some are more suitable for individual creators and artists.
OpenSea, based on the Ethereum blockchain, currently boasts the biggest user base and trading volume, and is the top choice of many NFT creators and buyers.
Rarible lets you mint your works on blockchains including Ethereum, Tezos and Flow, the latter being a blockchain used by NBA Top Shot and ARTIFACT, the South China Morning Post’s own NFT project.
OpenSea, based on the Ethereum blockchain, currently boasts the biggest user base and trading volume. Photo: Handout alt=OpenSea, based on the Ethereum blockchain, currently boasts the biggest user base and trading volume. Photo: Handout>
OpenSea and Rarible both offer the option to create and list your NFT for free, in which case it will only be minted on the blockchain once it is sold. In these cases, the buyer pays the “gas fee”, or the transaction amount required to write data on a blockchain network, after the first sale of a specific NFT collection. Other fees also apply, as will be explained later.
Some platforms, such as Foundation and SuperRare, only let you join and create your own NFTs if you have received an invitation. Other popular marketplaces such as Magic Eden and Solanart, which are based on the Solana blockchain that boasts lower costs and higher speeds, only allow secondary transactions at this stage.
A secondary NFT transaction is when a collection of NFTs is already sold through its own project website and is further traded among buyers.
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Step three: Create a crypto wallet and get crypto
Set up a crypto wallet that is compatible with your marketplace and blockchain of choice. Crypto wallets hold the private keys to your crypto assets, including cryptocurrencies and NFTs, and let you receive and send crypto with your wallet address.
MetaMask and Coinbase Wallet are popular choices for marketplaces based on Ethereum, whereas Phantom and Solflare are among wallets that work for Solana-based platforms. You can set up a wallet – typically done through an online platform, browser extension or app – without owning any cryptocurrencies. Later, you can buy cryptocurrencies from a crypto exchange or use services that allow you to buy them directly with credit cards, such as MoonPay.
It is important to not lose the login password to your wallet and what is called the “seek phrase”, a series of simple words that give you access to your wallet, as platforms cannot help you recover them. In that case, you will lose access to your crypto assets.
The Guardians of Fashion (GOF) project will mint 6,888 NFTs for two-dimensional avatars based on human characteristics, according to its creator, Singapore-based start-up Ownft World. Photo: Handout alt=The Guardians of Fashion (GOF) project will mint 6,888 NFTs for two-dimensional avatars based on human characteristics, according to its creator, Singapore-based start-up Ownft World. Photo: Handout>
Step four: Upload and mint
Once you have a crypto wallet ready, you can start creating. We will use OpenSea and MetaMask as examples.
From the menu options at the top of the OpenSea page, click “create” and proceed to connect your MetaMask wallet with the platform. A pop-up will appear for you to complete the connection. Then you can upload the file you prepared, add a name and description, and choose whether you want it to be minted on Ethereum or Polygon, the latter being a related but cheaper alternative to Ethereum.
To finish up, click the blue “create” button at the bottom of the page. Your new NFT will not be minted on the blockchain until after it is sold.
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To sell your first Ethereum NFT, OpenSea requires a one-time gas fee, which fluctuates based on factors such as network traffic. In the Post’s test on Thursday, the fee was 0.0525 ether, roughly equivalent to US$128.
Selling a Polygon NFT does not require such a fee, but it means buyers with Ethers need to go through extra steps to transfer their money from the Ethereum blockchain to the Polygon blockchain. Transferring cryptocurrency also requires a gas fee.
Finally, set a price for your NFT and decide how long it will be on sale, and click “complete listing”. Congratulations, your NFT is now up for sale.