A Beginner’s Guide to NFTs for Cryptoart
By now, you’ve probably heard about non-fungible tokens, or NFTs for short. If you haven’t, here’s a quick recap: An NFT is a unique token living on a blockchain that represents (or points to) some other data, like an image or video. Because they live on a blockchain, usually Ethereum, NFTs are easy to track. This tracking allows for verification of their authenticity as well as their past history and owners. Formally, NFTs are smart contracts, usually ERC-721, that people interact with by calling them and then receiving proof of interaction.
To give a concrete example, the first NFT and ERC-721 smart contract was CryptoPunks from Larva Labs. It consists of 10,000 24-by-24-pixel images of various punky characters. When they debuted in 2017, you could get one by just paying the cost of an Ethereum “gas,” which is the price to interact with the smart contract governing CryptoPunks. That price depends on supply and demand for the computational power of the network needed to process the transaction.
Once 10,000 CryptoPunks had been claimed, however, you could no longer create (or “mint” in crypto language) new punks. So, the supply was limited from the start by the smart contract. Once put on the blockchain, the contract was a binding agreement establishing how many punks can exist, how much they are sold for and how to get one.
Since the end of February of this year, the NFT market has seen explosive growth. At a recent record-breaking auction at Christie’s, Beeple sold The First 5000 Days for $69 million. Similarly, digital sports collectibles are booming with the NFT-based NBA Top Shots platform surpassing $200 million in sales last month. Clearly, this is fast becoming a lucrative market.
So, how can creators benefit from all this?
What Is an NFT?
My Entry to Cryptoart
I’ve recently begun experimenting with NFTs myself. Over the past few years, as I’ve engaged in various enterprises with artificial intelligence; using AI to generate images and animations has been a fun side project. Before I heard about NFTs, I simply held my collection privately on a hard drive.
Non-fungible tokens turned out to be the missing piece I needed to share my work with the public. I recently founded the collection AIA, or Artificial Intelligence Art, and created pieces that found new, happy owners. You can see my full collection at OpenSea.
This entire process was a fulfilling experience, as the NFT community is very welcoming and excited about new digital collectibles. As a result, I’ve gone even further down this road by buying a parcel in a Cryptovoxels blockchain world and creating an AI art museum to display my creations. You can visit it in your browser here.
All of this NFT experimentation has been a great adventure, and I’m sure now that NFTs are here to stay. So, let’s look at some practical tips about how creators can start selling their art online as NFTs.
Selling Art as NFTs
Imagine that you’re an artist who creates digital images or videos. How do you go about monetizing your content? You might sell signed prints or some kind of merchandise online. You could also create a painting, digitize it and then modify it online. The question then becomes: Which one is the original? Is it the painting, or is it the digital copy that you modified? If a digital copy exists, then is there the original digital copy?
This is where NFTs come into play. An NFT is basically a smart contract asserting that this digital piece is the original and all the others are just copies (or “digital prints,” if we were to use a real-life analogue). In other words, the NFT consists of your digital artwork plus a contract on blockchain asserting that indeed you created the piece and that it’s the original.
You can then sell this digital original (i.e., the NFT), and it will be registered on the blockchain. If the person who bought from you resells it, that transaction is also noted on the blockchain. You have access to the entire transaction history and can see how your work lives on the secondary market.
But that’s not the only way NFTs can benefit artists.
NFTS and the Secondary Market
One unique aspect of NFT-based art that doesn’t really exist in the offline art world is the ability to profit from the secondary market. Offline, once you sell your artwork, it’s gone. You don’t really get anything from it if and when it resells for more.
In the crypto world, however, you can set up a fee (usually between 5 and 10 percent) that you get each time someone resells your work. That’s right — you get paid for each resell! So, if you sell your original work for a dollar and then someone resells it for $1 million in 10 years, you can still get $100,000 from it.
This feature alone is the single best reason why NFTs are great for content creators. It allows them to focus on making art without as much concern for its initial sale price. If their works become popular, they can start earning significant sums just from the secondary market in the future.
Getting Started With NFTs
Getting started with the world of NFTs has never been easier than right now. Currently, the largest marketplaces right now are OpenSea, Rarible and Foundation. We’ll look at what differentiates each of these in a moment, but first, let’s talk about how to create an NFT.
First, you’ll need a Metamask. This is a Chrome extension that serves as your virtual wallet and can interact with platforms to buy and sell your artwork on the blockchain. It functions as both a wallet and e-signature in one.
To get started, download Metamask, create a wallet on it and then send some ETH to that wallet. You can buy ETH with your credit card on exchanges like Coinbase, Kraken or Binance. Once the transaction is complete and you’re verified, you can send it to Metamask. That process can take up to five days, but you only have to do this when you’re getting started. Once you’re done with that, everything gets easier.
You’re now ready to mint and to buy NFTs!
3 Popular NFT Marketplaces
NFT marketplaces enable users both to share their original pieces and also buy the work of others, which is also a great adventure. Moreover, looking at the type of work others are selling will give you a good sense of what’s popular right now.
Let’s now discuss in detail the three most popular NFT marketplaces.
OpenSea is the most democratic and easy-to-use platform of the three. No type of verification is necessary; anyone can create an account and start minting NFTs. You can browse through countless collections to find particular artists or peruse rankings by sales volume to discover interesting pieces.
OpenSea also makes submitting your own art or digital collectibles easy. Simply click on Create -> Submit NFTs and then you’ll be able to create a new collection and start adding new pieces. Even better, there’s no coding needed, so the barrier to entry is low. It takes three minutes to submit your first piece of digital art, and the whole process is free.
If you want to sell your pieces, you’ll need to pay for gas, which is the cost of interacting with the smart contract governing OpenSea, but you only have to do so once. Right now, it costs around $50 to $100 depending on network traffic.
Because it’s so simple and the cost is so low, many collections on OpenSea tend to be composed of digital collectibles rather than individual artworks.
Rarible is similar to OpenSea in that it is democratic and open. Here, however, because you have to pay for each artwork you mint (i.e., create and put on a blockchain), there’s much less noise and not many collectibles. People mostly use Rarible to mint individual pieces. So, although getting your work seen here is easier, the cost is much higher, as you’ll be paying $40 to $80 for the minting of each work.
Foundation is the most difficult to access of these marketplaces. You’ll need a certain number of community upvotes from fellow artists to even post your first artwork. As such, the best way to enter Foundation is through a direct invitation from one of the artists already on the platform. This way, you can avoid the queue and jump straight into selling your art.
The difficulty of getting in here and the cost of gas for minting each NFT means that you generally find better quality art going for higher sums of money here. This is definitely a good place for already established artists and creators who have a strong following on other platforms and can bring them over.
Start Minting Now
From a content creator’s perspective, there’s never been a better way to display and sell digital creations. If you’ve been curious about blockchain, NFTs or cryptoart, use this guide as a gateway to start exploring right away. For a relatively low cost, you can get into the market and start building up a following today.