How to create an NFT: Non-Fungible Tokens (NFTs) have become one of the most popular use cases of Blockchain technology. It is gaining traction as an additional source of income for artists and creators. This article explains how to create an NFT. But before getting into the details, first take a look at what a non-fungible token means.
A non-fungible item simply means that it cannot be exchanged for another. In that sense, an NFT is unique. In the rapidly emerging world of Blockchains, an NFT is a certification of validity on a Blockchain, making it traceable and available to all to determine ownership.
An NFT can be said to be a kind of virtual currency that may be in the shape of paintings, films, music or any other type of digital product. Almost all kinds of digital artworks and documents can be converted into NFTs.
NFTs have gained popularity as they allow creators to trade on certain platforms and realise gains in actual currency. Since 2020, we have seen several NFTs acquiring astronomical value based on multiple factors including scarcity, creator’s following, uniqueness, utility and liquidity premium .
How to create an NFT?
NFTs are not created. Rather, in popular Blockchain terminology, they are minted. Usually, NFTs are minted on platforms that also facilitate trading of these tokens. These platforms are also called as NFT Marketplaces. In India, some of the most popular NFT Marketplaces are NFTically, WazirX NFT. Globally, platforms like Open Sea and Rarible are some of the largest NFT marketplaces. These days almost every crypto exchange is providing a separate NFT Marketplace on their apps and websites.
When you mint an NFT on a marketplace, you also get an opportunity to sell or display it to visitors. NFT marketplaces allow users to convert their digital items into NFTs within minutes. Minting an NFT basically means converting a digital file into a blockchain-based NFT.
Following are some of the steps that you need to know to create an NFT
1. Set up a crypto wallet
Before minting an NFT, users are first required to set up a crypto wallet. Currently, MetaMask is one of the most popular crypto wallets, which is compatible with Ethereum Blockchain. There are also some other wallets that are compatible with other Blockchains like Polygon (MATIC) and Solana (SOL).
2. Select an NFT Marketplace
You need to select on an NFT marketplace where you want to mint your NFT. Marketplaces like NFTically, Foundation, MakersPlace and Mineable allow users to create their own NFT marketplaces. Recently, WazirX NFT also introduced “Nano NFT” which allows users to create collections of NFTs at much lower rates. However, it is currently an invite-only feature on the platform (read more details here).
3. Minting an NFT
Every NFT marketplace provide easy-to-follow step by step guide to create an NFT. Generally, you need to click on the “Create” button on the NFT marketplace, select the digital file that you want to mint into an NFT, and upload it. Here platforms provide the option of creating a single NFT (BEP-721) or a series/collection (BEP-1155).
BEP-721 and BEP-1155 are blockchain protocols for minting NFTs.
After selecting the digital file, you need to pay a certain amount (in crypto) as gas fee from your crypto wallet and complete the minting process.
For minting an NFT, you need to pay a certain amount as gas fee, which is common to all crypto transactions. You may also have to pay some amount to the marketplace.
NFTs provide several ways in which you can make some money. It could be through renting your NFTs, earning royalties on them, staking your NFTs, flipping your NFTs.
Flipping typically means buying an NFT on a marketplace and selling it for a higher price. However, experts suggest that you should buy only that NFT which has some inherent value. As seen recently, NFTs with no inherent value may lose its price quickly.
(Cryptos, NFTs and other virtual digital assets are unregulated assets in India. Investing in them could lead to losses. Please consult a professional financial advisor before making any investment decision in crypto)