Pandemic-accelerated digitization and growing interest in the metaverse are making the acronym NFT increasingly popular. Previously unknown to the general public, non-fungible tokens are being used by large companies and world personalities.
While NFTs still seem like a distant reality, marketing them is a simple process and can be an opportunity for independent artists to sell their work digitally.
Below, check out a step-by-step guide on how to produce an NFT.
What changes when an art becomes an NFT?
By transforming an art into NFT, you will be granting it a certificate of authenticity, linking it to a unique code on a network and making it unique in the digital environment. Thus, your file becomes a crypto asset.
Selfies, videos, GIFs, music and even tweets can become NFTs and be marketed. The profit of those who trade the tokens depends only on the existence of interested buyers. Twitter Chief Executive Jack Dorsey, for example, sold his first post on the site as an NFT for $2.9 million.
Even though the image can be replicated countless times on the internet, the NFT certificate guarantees that the art is your property. As a result, collectors pay thousands (and even millions) of dollars for the files.
Most NFT transactions take place on ethereum, a decentralized network that provides encryption of information. Therefore, it is recommended to buy ether, a cryptocurrency on the network that currently costs around BRL 15,000.
How to get cryptocurrencies?
To acquire cryptocurrencies, you need to create an account at a cryptocurrency exchange and transfer money to have it converted. It is possible to buy only fractions of ether, not the entire unit.
After purchasing ether, you need to create a digital wallet to store the crypto asset and carry out transactions. The best-known and most used ethereum wallet for NFT trading is MetaMask, which can be accessed through a Chrome extension or a mobile app.
It is important that the cryptocurrency purchase process is done with reliable and experienced companies to avoid scams.
Where can I create an NFT?
NFTs can be produced on specific crypto-art platforms, which act as a “shopping mall” for non-fungible tokens.
The biggest one is OpenSea, a company created in 2017 that practically dominates the NFTs market and has already been valued at more than US$ 13 billion (R$ 70 billion). Other options are Rarible, Looksrare and Nifty Gateway.
After choosing the platform, you need to connect it to your digital wallet. So, make sure the site you choose is compatible with your wallet.
The next step is to register on the spot, upload the artwork you want to transform into NFTs and choose the network where the cryptoart will be stored.
OpenSea, for example, offers free options for hosting the media, but with disadvantages such as low visibility and lower level of security.
On the same platform, it is possible to choose ethereum as a network, the most secure and popular option, but at a cost.
To use a blockchain network, as is the case with ethereum, it is necessary to pay a fee known as “gas” to remunerate the network’s miners.
“The blockchain is like a big computer with thousands of people around the world to validate transactions, commonly called miners. They work to provide security for this network and receive rewards, which are these fees, to process transactions”, explains Samir Kerbage, chief technology officer at asset manager Hashdex.
Transactions involving ethereum, whether to buy or sell NFTs, will have a fee that varies widely between a few tens of dollars, sometimes more expensive than the work itself, depending on the day and time.
To get the best prices, Kerbage advises carrying out the process during periods with lower demand, such as weekends or early morning hours, when large investors are not active and miners have greater capacity to carry out transactions, which tends to lower prices.
What is the best option to host an NFT?
It depends. Alexandre Ludolf, head of information technology at QR Asset, says that you need to consider values ​​to choose the network that best fits your goals.
“For very high value-added items, it is recommended to choose ethereum. If I want, for example, to tokenize a property worth R$1 million, it’s fine to pay US$100 to register on the best network. But it’s not worth it when this is a R$ 5 collectible card”, he says.
He explains that the risk of opting for lesser-known and cheaper networks is that there is no guarantee as to how long they will continue to function. Therefore, the advice is to use them for files that will not be needed in the long term.
After choosing the network and uploading the file to the platform, simply fill in information about the work, such as title and description. In addition, you can set a value for your artwork, set up copyright and even set a percentage to be received each time your NFT is resold.
Once exposed, your crypto-arts can now be seen and sold to any user of the platform.
Is there a risk of losing money with NFTs?
Yes. Although the platform allows you to set a price for your crypto art, there is no guarantee that there will be buyers willing to pay it, but you can adjust the values ​​to suit the situation. The costs to carry out transactions on ethereum, for example, can exceed the maximum offer for your NFT, causing a loss.
To avoid this situation, it is possible to trade your art off the platforms before turning it into NFT, writing down the costs and making sure that the offer will be worth it.
In addition, you need to invest in security to ensure that your art is not lost. As in “real” life, there are thieves in the world of NFTs as well, and ensuring valuables are safe is critical (and costs involved).
Bugs on platforms can also bring losses. Last month, for example, a flaw in OpenSea allowed attackers to buy at least $1 million worth of tokens at below-market prices.
There is also a warning from experts about the possible formation of a digital bubble in the crypto market.
What are the advantages of doing an NFT?
NFTs are becoming more and more popular, and entering this market can be another source of income for artists.
Brands are adhering to non-fungible tokens and taking their products to the digital universe, mainly betting on the development of the metaverse.
While the future is unpredictable, the tech industry is betting that interest in NFTs is likely to grow even more.
In addition, one of the advantages of crypto-art platforms is the exposure they offer to independent artists, who can have their works traded with people from anywhere in the world.
“This is a way of making a living from art, something that is very difficult in Brazil. With NFTs, the artist is no longer limited to the country in economic crisis. The power to conquer a global market is one of the most powerful things”, says Ludolf .
Source: Folha
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
