What Are NFTs, How Can You Create Them, And How Are Artists Earning Cryptocurrency From Them?
NFT or Non-fungible tokens are essentially a blockchain entry that represents a unique item that cannot be interchanged with another.
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By Vineet Washington | Updated: 11 March 2021 21:24 IST
Highlights
NFTs first became popular in 2017
CryptoPunks and CryptoKitties are the two most popular NFTs
You can set up a digital art NFT free of cost
NFTs provide a certificate of ownership of a digital object
Photo Credit: Unsplash
NFT or Non-Fungible Tokens are cryptocurrency assets that represent a wide range of unique items, both physical and virtual like real estate or digital art. NFTs are unique - like a real artwork, an NFT uses the blockchain to identify its authenticity, so you can tell the difference between an original or a replica. They are essentially a blockchain entry and provide an opportunity for collectors to have a digital collection where each item can be traced to its original issuer. CryptoPunks and CryptoKitties are the two most popular NFTs.
NFTs provide a certificate of ownership of a digital object for the buyer, which also protects its value for future transactions. A report by Coindesk states artists can sell their art digitally to a global audience that not only allows them to get a greater cut of the profit but programme royalties as well. Gamers can also become owners of in-game items and even earn money from them. It adds that a majority of NFT tokens were built using two Ethereum token standards - ERC-721 and ERC-1155.
Elon Musk's partner Grimes recently sold digital art as NFTs, earning $6 million (roughly Rs. 43.76 crores) selling images and short videos, which has brought a lot of attention to the market.
There are several types of NFTs that have their own setup process. In case you want to set up digital art NFTs, here's how you can do so through one of the popular online markeplaces, OpenSea.
The first step is to set up a digital wallet to store NFTs and crypto. OpenSea recommends MetaMask and its wallet extension for Google Chrome.
Next, head to OpenSea and hover over the profile icon on the top right to select My Profile.
Then, click Sign in and follow the instructions on screen to finish setting up your account.
Once done, you should see your account page and then hover over Create in the top right and select My Collections.
Under Create new collection, select Create and enter the details for your collection.
After finalising your collection, click on Add New Item and you will be asked to upload metadata which includes image, video, audio file and then give your NFT a name.
Finally, click Create and your digital art NFT is set up.
You can now list your collection for sale on OpenSea but keep in mind, first time sellers will need to pay a gas fee – Ethereum blockchain transaction cost – before listing anything.
OpenSea is one of the most well known NFT marketplaces today, but other big ones include Rarible and SuperRare, and present an opportunity for artists to find a new audience, and earn some money from the cryptocurrency market.
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