Here’s a beginner’s guide to help you understand the basics.
We don’t hear much about NFTs in Pakistan. It’s usually done through social media platforms like Instagram or Facebook, which do not give any information about how to invest in it. Hence, I have come up with a simplified version for those who are thinking of taking it up.
What Are NFTs?
Non-fungible tokens (NFTs) are blockchain-based tokens that each represent a unique asset such as a work of art, digital property, or media. An NFT is an irreversible electronic certificate of possession and authenticity for a specific item, whether virtual or real.
Non-fungible tokens come in a variety of forms and can be produced on well-known blockchains such as Bitcoin and Ethereum.
A blockchain is a data format that enables the creation of a digital record of data and its distribution across a network of independent participants. The blockchain mainly used with NFTs is the public blockchain.
Public blockchains, such as Bitcoin and Ethereum, are large distributed networks that are run through a native token. They’re open for anyone to participate at any level and have open-source code that their community maintains.
How Is An NFT Created?
A creator, developer, or licensee creates a non-fungible token through a process known as minting. Minting is the act of executing a blockchain transaction outlining the basic token specifications, which is then propagated to the blockchain to activate a savvy contract mechanism that produces the token and allocates it to its owner.
Most NFTs are created on the Ethereum blockchain based on widely accepted token standards to enhance composability and interoperability.
What You’ll Need To Get Started With NFTs
Whether you wish to dabble in NFT markets or develop, create, and deploy your own customised NFT smart contract, you’ll need two crucial items.
- A MetaMask wallet, which you can download at https://metamask.io
- Ether, the ‘currency’ you’ll need to make transactions.
You can obtain Ether from popular crypto-exchanges such as Coinbase, accessed at https://www.coinbase.com
How To Make And Sell An NFT In Marketplaces
- Buying cryptocurrency to fund your wallet
You’ll need cryptocurrency to create and market an NFT. All of the NFT auction sites will need a fee to ‘mint’ an NFT, which is the process of converting your artwork into a non-fungible token that you may auction.
Most payments must be done in cryptocurrency, which implies that before you can make any cryptocurrency by selling an NFT of your work, you must first purchase some to cover the expenses. - Creating a digital wallet to pay for your NFT
To establish a digital wallet using MetaMask, which is required to create and sell an NFT, go to its site and tap on the blue ‘Download’ button in the top-right corner.
Adding Cryptocurrency To Your Wallet
After you’ve created your MetaMask wallet, or any digital wallet, you’ll need to fund it with ETH. If you don’t already have some ETH, you’ll need to purchase some now, so click the ‘Buy’ button and choose ‘Buy ETH’.
You’ll be taken to a screen where you may buy ETH using Apple Pay or a debit card.
Connecting Your Wallet To An NFT Platform
Most digital wallets operate in a similar manner. Whichever one you choose, you must link it to the NFT platform via which you will sell the NFT.
Uploading The File You Want To Turn Into An NFT
So, now that you have a wallet linked to ETH for payment, you’re ready to learn how to create and sell an NFT. On the website, click the blue ‘Create’ button in the upper right corner. You will then be offered the choice of creating a single, one-time work or selling the same thing several times. In this case, we’ll go with ‘Single.’ You must now upload the digital file that you wish to convert to an NFT.
Setting Up An Auction For Your NFT
You’ll need to pick how to sell your NFT artwork in the following section of the form. There are three choices. ‘Fixed price’ allows you to establish a cost and immediately sell your NFT. The ‘Unlimited Auction’ option allows individuals to keep bidding until you select someone. Lastly, a ‘timed auction’ is a bid that only lasts a certain amount of time.
This brings us to the most difficult part: choosing on a starting price. If you sell your NFT too cheaply, the massive fees will eat away your return, perhaps leaving you out of pocket.
Following that, you have the option to ‘Unlock once bought.’ This allows you to present your eventual buyer with a full, high-resolution version of your artwork, as well as supplementary information.
Adding A Description To Sell Your NFT
You may now give your item a name and a description. Take time to consider this if you want to increase the likelihood that your NFT will sell.
Paying The Listing Fee To Sell Your NFT
If someone buys your NFT, you’ll have to pay a commission charge on the NFT sale as well as a transaction fee for the money to be sent from the buyer’s wallet to your own.
What Are The Hurdles And Hazards Associated With The Use Of Non-Fungible Tokens?
The adoption of non-fungible tokens may face several problems and concerns, including, but not limited to:
- Regulatory/Legal Implications: With the advent of modern and novel technologies, especially those involving risky or high-value assets, come additional regulatory and legal issues such as know your customer processes, anti-money laundering measures, and securities law compliance.
- Rapid Innovation: The high speed of innovation in the NFT environment and the blockchain systems on which they are given poses obstacles for those embracing the technology in the form of continual flux; adaptability and modularity are essential.
Takeaway
Do you think investing in NFTs is worth it and after reading this, do you think you’ll be interested in investing?
Are you optimistic about the future of NFTs or skeptical?
Let us know in the comments below!