So you’ve read about NFTs. And despite the controversy surrounding them, you figure you might be able to make money from them. But how do you actually go about creating and selling an NFT? In this article, we’ll walk you through the nuts and bolts of the process.
First, though, a reality check. Although you may have heard of people selling NFTs for thousands of dollars (see our NFT artwork post for just a few examples) they’re very much the rare exception. And even if you replicate that success, most of that money won’t go to you.
That's because numerous fees are charged to NFT artists, both upfront and after the sale, by the cryptocurrency companies that enable the transactions and the platforms that generate and maintain the NFT. (If you need a bit of help deciphering exactly how NFTs work, see our guide to what is an NFT?)
Often, the full nature of these fees won’t become clear until you’ve already parted with some money. And overall, it’s very likely you’ll end up losing cash rather than making it. To take one example, Alan Gannett explains in this post on OneZero.com how he created four NFTs, sold one, and lost over $1,000 in the process.
How NFTs are made in practice
Willing to take the risk? Then read on, as we explain the practical steps of actually navigating an NFT platform.
For illustrative purposes only, we’ve chosen to do this via the NFT platform Rarible and the cryptocurrency platform MetaMask. However, this is in no way an endorsement of either service, and there are many other providers to consider.
Other NFT platforms include OpenSea, SuperRare, Nifty Gateway, Foundation, VIV3, BakerySwap, Axie Marketplace and NFT ShowRoom, and other payment platforms include Torus, Portis, WalletConnect, Coinbase, MyEtherWallet and Fortmatic.
01. You'll need some cryptocurrency
The first thing to get your head around is that you’ll need to pay a platform to ‘mint’ (ie. generate) an NFT. And most platforms want this paid in Ethereum, a blockchain currency that’s a bit like Bitcoin.
Ethereum is measured in ETH, and like Bitcoin its value fluctuates massively. When we started writing this article, 1 ETH was worth $2,751.61 / £1,923.66. Just five hours later this had changed to $2,560.92 / £1,807.47. So if you're expecting to project precise figures for your costs and profit, you may as well forget it.
To buy Ethereum, you first need to create what’s called a ‘digital wallet’ and then connect it to your NFT platform of choice. There are many digital wallet services, but for illustrative purposes we’re going to use MetaMask, which is available as both a browser extension and as a mobile app.
If you’d rather use another service, though, just skip ahead to step 4.
02. Create a digital wallet
Go to the MetaMask website and click on the blue ‘Download’ button in the top-right. As we’re using a desktop computer, we choose the option to install the browser extension.
Next you’re asked to confirm that you wish to ‘create a new wallet and seed phrase’. It’s not really important to know what ‘seed phrase’ means, but basically it’s a list of words that stores blockchain information.
Say yes to that. Then it’s just a matter of agreeing to the terms, creating a password, working through some tedious security stuff, and you’ll have an account set up.
03. Add money to your wallet
Now that you have a MetaMask wallet, it’s time to add some ETH to it. This bit is pretty simple: click on the ‘Buy’ button, and then select the option ‘Buy ETH with Wyre’. You’ll then be taken to a screen where you can buy ETH with either Apple Pay or a debit card. (Note: if you'd rather not part with any money yet, you can actually save this stage till later; it just requires a little more faff.)
04. Connect your wallet to the NFT platform
With some ETH deposited in your wallet, it’s time to head to the NFT platform itself and spend some of it. For illustrative purposes, we’ll use Rarible, but as we mentioned earlier, other NFT platforms are available.
Go to Rarible.com (shown above) and in the right-hand corner of the screen you’ll see a button titled ‘Connect wallet’. Click it, and the next screen asks for your wallet provider, which is our case is MetaMask.
A popup box now appears, and gives you the option to connect your wallet with Rarible. Click on ‘Next’, then ‘Connect’, accept the terms of service and confirm you're over 13 years of age.
05. Upload your file
Hooray! You’re ready to create your NFT. First, click the blue ‘Create’ button at the top right of Rarible.com. You’re then given the options of creating a single, one-off work, or selling the same item multiple times. In this example, we'll opt for ‘Single’.
You can now upload the digital file you wish to turn into an NFT. On Rarible, this can be a PNG, GIF, WEBP, MP4 or MP3 file, and up to 30MB in size.
For illustrative purposes, we’ve created an ironically terrible piece of art, inspired by David Hockney’s recent controversial work. Upload your (much better) digital file, and on the right you’ll see a preview of what your NFT post will look like.
07. Set up an auction
In the next part of the form, you need to choose how you wish to sell your NFT artwork. You have three options here.
‘Fixed price’ allows you to set a price and sell it to someone instantly (like ‘Buy it now’ on eBay). With an ‘Unlimited Auction’, people carry on making bids until you accept one. Finally, ‘Timed auction’ is an auction that only takes place for a certain time. That’s the option we’re going to choose for our example.
Now comes the tricky part: setting a minimum price. If it’s too low, the enormous fees will swallow up your profit and may leave you losing money overall. So we’re setting our price at an ambitious 1 ETH, and giving people seven days in which to make their bids.
Next on the form, you get an option to ‘Unlock once purchased’. This gives you the chance to provide your eventual buyer with a full, high resolution version of your art, and/or additional material through a secret web page or download link.
Below that lies the most confusing option on the form, titled 'Choose Collection', which is basically a very technical question about how the blockchain is set up. The default option here is ‘Rarible’, and we’d advise leaving it like that.
08. Describe your NFT
Next, you get to add a title and description for your listing. To maximise your chances of selling your NFT, you’ll need to spend some time perfecting this.
You're then asked to consider what percentage of royalties you wish to claim on any resale of your art in the future. Again, this is a balancing act, as a higher percentage will net you more money per sale, but it will also deter people from reselling your art in the first place, as they’ll be less likely to make profit for themselves.
Finally, there’s an optional field to add your file’s properties, and then you’re almost done.
09. Pay the fee (but be warned)
Click ‘Create Item’, and you’re invited to connect with your wallet to pay the listing fee. If you don’t have sufficient funds in your wallet, don’t worry: you don’t have to start again. Just click the wallet icon in the top-right corner of the screen, and you’ll be given the option to add funds directly within Rarible.
Before you do so, though: be warned. The listing fee may seem low: in our case it was just $5.91. But this is only the beginning of the fees you’ll be charged.
Before you can go any further, you have to agree a further fee to actually generate your NFT, which in our case would have been $42.99. Then if someone does buy your NFT, there’ll be a commission fee on sale, and a transaction fee for transferring the money from the buyer’s wallet to your own. As far as we could tell, none of this is made very clear on Rarible’s website.
We’d love to explain, clearly and simply, how to calculate the cost of creating and selling your NFT. But the confusing nature of blockchain technology, the insane fluctuations in cryptocurrency, and the lack of transparency from the platforms themselves make that an impossible task. So quite frankly, you’re going to have to wait and see how much you’re charged overall.
If you do fancy taking a punt and throwing a bit of money at NFTs, though, we wish you the best of luck. And we’d love to hear how you got on via Twitter at @creativebloq or Instagram at @creativebloqofficial.