Find out what NFT is and how to make money with it
Recently, you might have come across the news about large NFT deals like:
- ”A user has put Elon Musk’s tweet for a sale of $7 777”
- ”A resale of a $130 NFT for $130 000”
- ”NBA NFT collectibles have been sold for $2.5 in 30 minutes”.
Other companies like Nike, Samsung, Vodafone, F1, Ubisoft, and Louis Vuitton have engaged with NFTs. These include virtual items and the wallets to store them.
While NFT isn’t a novelty on the crypto market, it’s been gaining large traction over a couple of the last months. According to nonfungible.com, the market volume of NFTs has reached $179 371 130. To get into this market, start by understanding what an NFT is.
What is NFT
NFT stands for Non-Fungible Token. Fungible objects mean they are identical and interchangeable. For example, a $1 banknote can be exchanged for another $1 banknote. This makes a US Dollar a fungible asset.
A non-fungible object is unique. Its properties cannot be replicated. For instance, the Mona Lisa painting is one of a kind piece of art. Since Leonardo Da Vinci has only made 1 Mona Lisa painting, it is non-fungible.
NFTs are also singular as they cannot be divided into parts. You can have 0.003 BTC, but you can’t have 0.003 of an NFT, only 100% of the piece.
NFT is a blockchain token. A token is a digital asset that resides in a blockchain system. Similar to cryptocurrency, it can be traded or used for voting rights on a blockchain platform. For example, the MKR token allows its owners to vote on the platform direction. Note that MKR is fungible because 1 MKR can always be traded for 1 MKR. So how do Non-Fungible Tokens look like?
To understand NFTs, remember how people collect items. There’s a market for trading baseball cards, postmarks, and old money. Imagine a baseball card that was produced only in 1 quantity. That would make it very rare. Since there’s no other card like that, it’s non-fungible.
In the same manner, NFTs can also be baseball cards. Except for, you can’t touch them because they are not physical. It would be a picture file with unique properties. Unique digital items have existed since the advent of the Internet: images, videos, music, games, in-game items. What makes NFTs different is that these digital items are placed on a blockchain. This ensures the ownership of an NFT is verifiable.
Ideas for NFTs
NFTs don’t have to be art. It may as well have a utility of its own. Take a look at some of the ideas for creating NFTs:
- Airline tickets
- Event tickets
- Support tokens for influencers
- Discount coupons for stores
- 2D images: static or animated
- 3D images
- Video Game items
- Real estate ownership document
- Blog articles
How to create NFT
First off, choose your token standard. Basically, it’s a system of rules that defines a token. Right now, there are 2 mainstream token standards: ERC721 & ERC1155.
ERC721 is a token standard for the Ethereum blockchain. ERC1155 is a token standard for the Enjin blockchain. ERC1155 is more complex because it has a class property. For example, if you own several digital baseball cards, a baseball card is a class. That’s how you can specify how many cards you want to send or receive.
Next on, plan what kind of NFT media you want to create. It can be 2D art, 3D art, a static model, an animated model, or an in-game item for players. Make sure to host this file on a public URL and make the file name end in its proper extension.
For example, “PaySpaceMagazineToken.jpg”
Creating NFT is technically called minting it. Let’s see how to mint an NFT on ERC721:
- Install a browser with an Ethereum wallet. For example, Chrome or Firefox with a Metamask extension, or a browser called Brave.
- Sign up on the Mintable app to create an ERC721 smart contract.
- Connect your Ethereum wallet to Mintable.
- Create a smart contract. Name the contract to represent what kind of items you plan to mint. We might as well name it “PaySpace Magazine Tokens”.
- Name your contract symbol. This is similar to a stock and crypto ticker: GME, BTC, ETH, TSLA. In our case, it will be “PST”.
- Batch mining is optional. It allows you to mint several NFTs in one go.
- Type in a web URL, where your file is published.
- Fill in up to 3 rows of metadata. These are your token properties. For example, our PaySpace Magazine Token would include properties like Color: Red, Size: Big, Shape: Circle.
- Choose whether you want to use Mintable’s API. This will allow you more custom properties for the metadata. It also enables you to quickly put your NFT for sale on a market called OpenSea.
- Some properties like title, categories, and description can also be filled in.
- Pay 2 fees. One fee is for creating a smart contract. The Metamask gas fee is expensive because it deploys a smart contract on the blockchain. The limit is 3,500,000 gwei. Make sure not to change or a transaction will fail. The second fee is for processing the transaction. You can easily set this to the minimum of 1 gwei, but it will take 1-2 hours to process.
- Once you confirm the creation, a smart contract will be created.
How to sell NFT
As with any other marketplaces, NFTs have their own places for trading. Pay attention to which token standard a marketplace supports. You will need to create an account there and connect your crypto wallet. If you’ve created NFT on Mintable, you can easily put it up for sale on OpenSea.
Here are more websites where you can put your NFT for sale:
- Nifty Gateway
- Terra Virtua
Good luck minting your NFTs and selling them to the highest bidder.