ExplainerHow to make an NFT, a step-by-step guide: from picking your content, marketplace, blockchain and crypto wallet, to uploading your non-fungible token – but is the long, costly process worth it?
NFT trading topped almost US$18 billion in 2021, up more than 21,000 per cent from 2020, according to a report from analytics firm NonFungible.com. Though the NFT market took a hit in 2022 with the onset of “crypto winter”, people are still eager to get into the NFT market.
Here’s how you can get started if you’re interested in entering the NFT market …
What is an NFT?
While the numbers surrounding the NFT market can be dizzying, it’s important for anyone interested in getting into the space to understand what, exactly, an NFT is.
Broadly speaking, an NFT is a one-of-a-kind digital asset. It’s been assigned a specific cryptographic identifier that allows its holder to prove ownership. The data related to its ownership and transaction history is recorded on a blockchain network – typically, Ethereum. The important thing to know is that NFTs are digital, irreplaceable and tradeable through online marketplaces and exchanges.
While most people may be familiar with NFTs as they relate to digital art, they can potentially be used to “tokenise” a number of other things, such as collectibles (think baseball cards), music and even personal information like medical records.
Though NFTs seem like a newfangled crypto-related asset, they’ve been around for several years, explains Connor Borrego, an NFT expert and co-founder of UniPro, a digital growth agency.
“NFTs started in 2015 as meaningless digital collectibles,” he says. “But now in 2022, they mostly act as membership access to online social communities.”
How much does it cost to make an NFT?
If you’re interested in making your own NFTs, commonly referred to as “minting”, know that it does require some initial legwork and investment. The cost of minting an NFT can range from a few dollars to a few thousand dollars, depending on a variety of factors. It all comes down to the specifics.
But, Teh warns, “a lot of people think that they can create an NFT, post it on a marketplace, and then sell it, become millionaires and retire on an island. If it was that easy, everyone would do it”.
Here are some of the main costs you’ll encounter:
Initial costs: Teh says that perhaps the biggest and most important cost is related to what makes your NFT special. “If you want to keep costs low, think about what makes your project unique. Unless you’re a famous artist, your NFT is going to need some interesting utility,” she says. As such, you may need to put some money into creating artwork or any other asset that you’re attempting to tokenise.
Account fees: Choosing an NFT marketplace to mint and list your NFTs is another step that requires consideration. OpenSea, Rarible and Binance are three of the largest and most popular marketplaces, and all may have different fees involved with establishing an account, trading and minting. For example, OpenSea charges a couple of one-time fees to get your account up and running and a 2.5 per cent fee on transactions.
Actual minting costs: It’s possible to mint an NFT for free (called lazy minting) on some marketplaces, like OpenSea. But minters do usually encounter “gas fees” to create NFTs. These are usually paid in ETH and can vary depending on the day and time you’re trying to mint. Note, too, that even if you opt for the lazy minting option, you may still need to pay fees when your NFT is sold.
Note: The cost of minting an NFT can vary wildly. Starting from scratch may cost prospective minters hundreds or even thousands of dollars.
How to make an NFT
Minting an NFT may sound like a technical, involved process. But for most people, it’s relatively simple. Besides making a couple of choices in regards to wallets and marketplaces, minting an NFT isn’t much more than “just having a file to upload”, says Borrego.
The process itself looks like this: choose a file to mint and a blockchain network and marketplace to mint on; get your wallet in order and connected; and finally, execute the upload. Here’s the process in more detail:
1. Pick your unique content
Many types of content – including images or audio files – can be minted into NFTs. Minters need to ensure that they own the rights to whatever they’re minting (either having bought them, or as the original creator), as they could face copyright-related lawsuits if they do not.
Choosing what to mint into an NFT is the most critical step in the whole process because it will inform important decisions later, says Teh. Depending on what you plan to do with your NFT (sell it, gift it, etc), it may be best to mint on certain blockchain networks and list on certain marketplaces. So, give a lot of consideration to this step.
Borrego says that choosing to mint art or anything else that you own can be beneficial. The minting process will take, for example, digital artwork and “stamps on information so owners can see where it is and where it’s going”, he says. That can help creators monetise their creations and open up new avenues to derive revenue from them.
2. Pick your NFT marketplace
Borrego says that the next step is to choose a marketplace, which acts as a digital exchange where NFTs can be minted, bought or sold, such as Rarible or OpenSea. This step will involve a lot of consideration, as some marketplaces work with certain blockchain networks and certain wallets, while others will not. Be sure to do your homework. Fees, too, are something that you’ll need to evaluate. And there are some marketplaces that cater to certain audiences.
“On the bigger marketplaces, there can be a lot of noise,” Teh says. “So, if you’re going to list on a marketplace, look at the numerous ones out there that are for very specific tastes,” she says, adding that some marketplaces, for example, are for sports fans while others could cater to music lovers.
Quick tip: It is possible to mint your own NFTs outside of an exchange. However, the learning curve can be steep. Most people mint their NFTs on marketplaces for an easier process and the ability to list it for sale.
3. Choose a blockchain
Teh warns that although Ethereum is the default for many minters, it is inefficient, and tends to have higher gas fees, which may push some minters to other blockchains.
4. Set up, fund and connect a crypto wallet
Next, minters will need to set up, fund and connect a crypto wallet to their chosen marketplace. Wallets are software programmes that allow users to send and receive crypto transactions, and they’re essential to the minting process.
You’ll need to choose a wallet that’s compatible with your marketplace and blockchain, and be sure to fund it before you start minting. That typically involves purchasing ETH and sending it to your wallet’s specific address from an exchange. Experts say some wallets, like MetaMask, are probably the safest route for beginners.
Borrego says MetaMask is very user-friendly and even has an extension for the Chrome web browser to make connecting it to most marketplaces easy. But, be sure you’re taking proper security precautions by protecting your seed phrase – if you lose it, you could be shut out of your wallet forever.
Quick tip: It’s up to you to keep your seed phrase safe. Some experts recommend writing it down on paper and storing it in multiple secure locations, or even a safe-deposit box at a bank.
5. Upload your NFT
With an account set up on a marketplace, a funded and connected wallet and a blockchain chosen, the final step is to mint an NFT. Each marketplace will have different steps, but generally speaking, a user can follow a built-in guide to complete the process. It’s usually as simple as uploading a file, filling in some descriptions, pointing it at the correct blockchain and pressing “mint”.
But remember that there can be fees for minting, unless you use a lazy minting option. And while those fees may require you to pay with crypto, Borrego says that some marketplaces are implementing credit card payments to make it even easier.
After your NFT is minted, it will live in a collection that you create and get listed on the marketplace. Then it’s yours to do with what you please.
Is it worth creating an NFT?
All of this leads to one final question: is minting an NFT worth it? There’s no direct answer. It will completely depend on your preferences and what you’re looking to get out of it.
If you’re hoping to make a lot of money minting and selling NFTs, the odds are against you, both Teh and Borrego say. But it may be worth it to mint NFTs for your own reasons, such as creating gifts or keepsakes for friends and family. Be sure to weigh the benefits of NFTs with what you’re willing to invest to create them.
Borrego says that he thinks NFTs will be around for a long time, and that we’re currently only scratching the surface of their utility.
“People think of NFTs right now as collectible digital items, and they don’t understand why people are speculating on them,” he says. Perhaps a good way to think of many of the hyped-up NFT projects currently gobbling up traders’ attention is to think of how they’ll be viewed in the future, he suggests.
In effect, many NFTs these days may essentially become “antiques”, Borrego says, and that may appeal to a certain type of investor.
“It’ll be like proof that you were there for the advent of Web3.”
- Non-fungible tokens, or NFTs, have become a multibillion-dollar asset class, with companies like Starbucks, Prada, Adidas and Nike getting in on the action too
- Prospective NFT creators should take fees, marketplaces (like Rarible or OpenSea), and blockchain networks (like Ethereum) into consideration before ‘minting’