So, you've been hearing all the buzz about NFT artworks getting sold for millions of dollars, and now you’re curious and want to jump on the bandwagon. We can't blame you, after all NFTs have constantly been making headlines, from Beeple's jaw-dropping US$69 million NFT artwork, the Shiba Inu dog meme selling for US$4 million (the most expensive meme in NFT history) to celebrities like Paris Hilton, Eminem, Snoop Dogg, and Justin Bieber launching their own NFT projects and collectibles. In September last year, even Hong Kong filmmaker Wong Kar-wai turned never-before-seen footage of his film In The Mood For Love into an NFT and raked over HK$4 million from an auction at Sotheby's. People are definitely paying big money for these unique collectibles.
Whether you want to start creating NFTs, or are interested in making your first purchase, we’ve outlined some basics to help you get started.
So, what is NFT?
NFT stands for non-fungible token. But before we go any further, you have to understand what fungible and non-fungible assets are.
Money, oil, bonds, gold and bitcoins are fungible assets, meaning that they can be traded or exchanged. They are equal in value – $1 bill for your $1 bill. Meanwhile, non-fungible assets are different because they have a unique code and properties that aren't interchangeable and cannot be replaced with a different item of the same kind. It's like autographed memorabilia, a rare sports card, an antique car, or a rare old coin – it is non-fungible as they can't be easily replaced.
NFTs are digital assets that represent real-world pieces or things like art, music, and videos. It has a blockchain-based signature that essentially turns the item into a one-of-a-kind digital token. This signature allows anyone to verify the artwork's authenticity and any transactions related to the artwork, including ownership, the person who sold it, and the time and cost of every transaction.
How do NFTs work?
NFTs exist on the blockchain – a public digital ledger of transactions that records the provenance of a digital asset. Think of NFTs like real collector's items but in a digital format. An artist or creator can create an NFT by converting tangible or intangible items like music, digital art, videos, GIFs, and virtual avatars into crypto collections or digital assets and storing them on the blockchain. This process is called minting. If you mint an NFT, you're converting digital files into crypto collections and publishing your token on the blockchain for buyers to see.
When people buy NFT, instead of getting a physical piece of artwork, the buyer gets a digital file and exclusive ownership rights.
What things can you convert into an NFT?
Anything that can be digitised can be turned into an NFT. Even a tweet! In fact, Twitter co-founder Jack Dorsey sold his first-ever tweet as an NFT for more than US$2.9 million. Aside from artwork, music, and media, you can also convert collectible items, trading cards, event tickets, in-game items on gaming platforms, virtual fashion, memes, domain names, and real-world items like rare spirits.
How to make NFTs?
The first thing you should do is choose the artwork or media you want to convert into a digital asset. Ensure that you own the intellectual property rights to this item, as using others' work may result in legal trouble.
Once you have chosen the item you want to turn into an NFT, you need to decide on the blockchain technology you intend to use. The most popular one used in NFT marketplaces is Ethereum. You will then need to set up a crypto wallet with some Ether to fund your NFT creation. Popular NFT wallets include MetaMask and Coinbase Wallet. After you've set up your wallet, purchase Ether from a cryptocurrency exchange like MoonPay. If you use a Coinbase wallet, you can buy Ether directly from the platform.
The next step is choosing your marketplace to create and list your NFT. The most popular NFT marketplaces are Rarible or OpenSea. OpenSea allows you to create NFTs completely for free buy you need to connect your ETH wallet to proceed. Once you've connected your digital wallet, you can now create your first NFT. The steps are pretty straightforward and usually take a few minutes to set up. Fill in all the required information, load your artwork, and start the minting process.
So you've successfully created an NFT, what now?
You can now start selling your works. But, same as in the real-life art world, you need to create buzz around your creations for them to stand out and get buyers to take notice. You may start by advertising and creating hype about your creations on social media. Twitter, Instagram, and Discord, are the most popular platforms to showcase your releases.
Where can you buy NFTs?
How to buy NFTs?
If you want to get in on the NFT action as a collector, you will need to set up a digital wallet and purchase cryptocurrency, like Ether. Connect your wallet to an NFT marketplace like OpenSea, Rarible, or Foundation. Once your wallet is connected, browse the available collections and start making your purchases.