What in the World is an NFT?
“A Light in the Darkeness” Currently on OpenSea
There’s not too many people today that haven’t heard about NFTs as they are constantly making headlines. I’m sure many of you are wondering, like I did, what in the world is an NFT? Today I want to dive right into it and answer some of the questions that I receive. Hopefully at the end of this post, you’ll have a better understanding of NFTs and maybe even go out and create one of your own.
Brief History
NFTs or Non fungible tokens, (we’ll get into that name later) aren’t a new thing. They’ve been around since 2014, when Kevin McCoy, minted his non-fungible token, “Quantum." A few years later in 2017, American studio Larva Labs created Cryptopunks, which are collectable digital characters that are traded through NFTs. As Cryptopunks gained popularity new NFT collections began to show up like, Rare Pepe, and CryptoKitties. NFTs had officially arrived.
Kevin McCoy, “Quantum” (2014-21), non-fungible token (image courtesy of Sotheby’s)
NFT’s didn’t really make it into the mainstream headlines until March 11, 2021, when an artist known as Beeple (Mike Winkelmann), sold an NFT at Christie’s auction for an astounding $69,346,250. After news broke of Beeple’s success, it seemed like there was a mad dash for anyone with remote talent to jump into the NFT game. Myself included.
Beeple (b. 1981) EVERYDAYS: THE FIRST 5000 DAYS
What Does Non Fungible Token Mean Exactly?
Non-fungible means that the item is unique and non replaceable. I like to think of NFTs as digital trading cards. That’s a bit of an oversimplification, but essentially that’s what they are.
According to Wikipedia, A non-fungible token (NFT) is a unique and non-interchangeable unit of data stored on a blockchain, a form of digital ledger.[1] NFTs can be associated with reproducible digital files such as photos, videos, and audio. NFTs use a digital ledger to provide a public certificate of authenticity or proof of ownership, but do not restrict the sharing or copying of the underlying digital files. The lack of interchangeability (fungibility) distinguishes NFTs from blockchain cryptocurrencies, such as Bitcoin.
Where Do You Sell NFTs?
NFTs can be sold on multiple marketplaces. Some of the most popular are OpenSea, Foundation, KnownOrigin, and Rarible, However there are numerous other platforms that seem to be popping up daily.
In my opinion the best platform to start selling is OpenSea. It’s the perfect platform for people wanting to break into the NFT market. They are the largest and oldest platform. When you mint an NFT, you have what’s known as gas fees. All Ethereum based marketplaces have gas fees or transaction fees. With OpenSea you only pay a gas fee one time to list a new NFT. After that you only pay 2.5% commission at the close of a sell.
What is Minting?
Minting an NFT is how your digital art becomes a part of the Ethereum blockchain–a public ledger that is unchangeable and tamper-proof. Minting can be compared to the way that metal coins are minted and added into circulation. It makes it easier to understand if you think of NFTs as coins or tokens that become “minted” once they are created, Your artwork, video, music, or virtually anything is then represented as an NFT.
Here’s a picture of me surrounded by my NFTs
What Are Gas Fees?
To be frank gas fees are a giant pain for artists and collectors alike. Gas is the name given to the fee that most NFT trading platforms charge. This fee is incurred to conduct the transaction or execute a contract.
Gas fees are determined by the amount of traffic on the network and the computation power taken to execute a transaction. Ethereum gas fees for example are extremely erratic and unstable because it’s a very popular cryptocurrency.
Gas fees are measured in what’s known as Gwei. Gwei is a small unit of the Ethereum network's Ether (ETH) cryptocurrency.
Gwei is a useful denomination to calculate gas fees (paid to miners for transaction processing) in a convenient way. I know super confusing. To simplify it, Gwei has a dollar amount associated with it. For example, 107 Gwei is equal to approximately $160 on OpenSea. Of course this fee is based on the current price of Ethereum and the marketplace you’re selling on. I’ve seen gas fees go from thirty dollars to literally thousands within minutes.
I use https://pumpmygas.xyz/to track gas fees.
Why Create An NFT To Begin With?
This is one of the questions that I get asked the most. Why buy an NFT, if I can just screenshot it? The answer is very simple; ownership. Ownership of the NFT is stored on the blockchain and it’s transparent and permanent. Sure you can screenshot the image, but you don’ t own it. They key takeaway here is ownership. Heck some artists even want you to screenshot the NFT and share it.
Another awesome benefit of NFTs are royalty payments. For the first time visual artists are being treated like musicians and authors. Artists receive royalty payments each time their art is purchased and traded in the market and digitally tracked as it’s resold or collected again in the future. How cool is that? For example, with Opensea, I’m paid a 10% royalty on all secondary sales. 10% doesn’t sound like a lot, but trust me it adds up.
What Do You Do With An NFT?
This is another question that I get a lot. After you collect an NFT or sell one what do people do with them? The answer is pretty simple; nothing. That’s not one hundred percent accurate though. Some people take the NFTs and display them on their desktops, watches, digital picture frames, or they showcase them in these amazing Metaverse galleries. More often than not, I see people do absolutely nothing with them though. They just remain in their digital wallets.
In my opinion NFTs are more about status and flexing. When someone drops a million dollars on an NFT thats a huge flex. Think of it like owning a Rolex versus a Timex. They both keep time, but one is undoubtedly a status symbol. Same goes for NFTs.
I think NFTs are the direction that art is heading. Think about what we used to do ten or twenty years ago. When someone would ask us about our kids or family, we would pull out our billfold and show them pictures in our wallet. What do we do now? We show people pictures on our phone. Art is being shown the same way. You can pull out your phone, open an app and show people a cool piece of art you just bought for $10,000.
My NFT, “A Deeper Meaning” being shown on a large screen at Stratosphere in Shangai, China for NFT Art Week.
What Can Be An NFT?
Virtually anything can be an NFT. Art, videos, music, real estate, etc. The options are nearly limitless and I believe you will see blockchain technology being brought into the mainstream within the next few years.
People often tell me that they create only physical works of art, so can they create NFTs? The answer is yes. I would suggest taking high resolution images of your work before you mint them though.
People are also concerned about creating NFTs of pieces that have already been sold. You can most definitely create NFTs of sold work. NFTs and physical art are two completely separate things with two separate types of collectors. Yes, there is some crossover between the two, but in my experience it’s rare.
I’m also asked if a person mints a physical piece, do they have to include the physical art? The answer is no. Some artists do include the physical piece as a little bonus for buying the NFT, but you’re under no obligation.
Well that pretty much sums up NFTs. I truly believe NFTs will become part of the mainstream art scene. When you have auction houses like Christie’s and Sotheby’s jumping in, there must be something to it. They’re not in the business to lose money. I think in the future, when artists sell their physical work, they’ll use the NFT as a Certificate of Provenance. Only time will tell.
If you’ re interested in getting started click the link below to setup an account with OpenSea. It’s really simple and this is the guide that I used. If y’all have any questions please drop me a comment.
Until next time,
