An NFT is a unique, verifiable, irreplaceable digital asset. People can buy and sell NFTs with cryptocurrencies and they are a prime component of the internet’s future…Web3. The world of NFTs is mystical and baffling for many. The best way to understand this digital reality is to create an NFT…Here’s how.
First, educate yourself on blockchains (BC). Blockchains are NOT the cloud. Think of a BC as a massive computer love-fest. Each computer (node) on the network runs its own copy of an identical program – and no one node or nodes controls the network, it is decentralized – there are thousands of nodes.
This love-fest never ends, it operates 24/7/365, processing transactions and maintaining a huge database (a ledger) of every single transaction, transfer, purchase, etc. The transactions are grouped into blocks that are connected in a chain – a blockchain.
Blockchains can be used to manage many things, including NFTs (which are mainly traded in the Ethereum (ETH) cryptocurrency-compatible blockchain).
I think I can say without too much reservation that BC technology will be used by almost every company and business without exception in the future.
Second, put your creation on a BC. Make a unique design, art, image of one item or several in a series. Scan the image with your cellphone or download it to your PC and produce a video. Now, you could upload the video to a social media account but then it’s just a copy. There is nothing to verify its originality, title, description, or owner – that’s what minting an NFT on the blockchain does.
This process creates a file (a token) with a record of your ownership on the BC. There are many places to mint an NFT, such as an NFT marketplace like OpenSea or Rariable. If you are not interested in minting your NFT you can go to a service called Cxip (pronounced chip), upload the video file and its ‘bio’ on Cxip’s website. To officially get your NFT on the BC you will need to pay a ‘gas’ fee with cryptos.
Third, open up an account at an exchange and a wallet. To open a crypto-account you need to go to a crypto-exchange, such as BitGo, Coinbase, or Kracken (there are numerous exchanges). Using this account you can transfer dollars into cryptos and use this for buying and selling. You also need to open a wallet. You can have your waller resident at the crypto-exchange, ie Coinbase, or at MetaMask. The crypto-wallet is used to interact with the ETH blockchain and provides users with a key vault, secure login, and token wallet which is the most popular of ETH wallets. This entire process can be accomplished online or with a mobile app.
When you open your wallet you’ll be asked to provide a secret key/phrase. You’ll need this phrase to access your wallet and if you lose it there is no way to access your wallet – you lose all your crypto.
Fourth, now with ETH in your wallet, you can now pay the gas fee and exchange fees required to mint your NFT. These fees can be significant. For one NFT the fees are normally between $100-200. Once the transaction is completed, you can confirm your NFT is on the BC at Etherscan (a website that lists all Ethereum transactions and their unique number).
At this point, you can decide if you just want to keep your NFT or opt to list it for sale on, for example, OpenSea or transfer it to another wallet (for more gas). It should be noted that buying an NFT on one of the marketplaces doesn’t require as many steps.
Fifth, the question one might ask is why would I want an NFT vs. a rare baseball card? Because you want to make money. You buy with the intent to sell in the future. And the NFT market is one place where you can make insane amounts of money. You want your ‘stuff’ in the Metaverse – the virtual world where we can live, shop, work, hang out, etc. Where you can own virtual land, with a house decorated with NFT art.
NFTs can also be used to authenticate and transfer ownership of physical objects, like a pair of sneakers or a rare bottle of wine, in the real world. Do you want special access? NFTs are already used as tokens or passes into private online groups. At the Bored Ape Yacht Club – which counts many celebrities and pro sports athletics as members – your unique cartoon-ape image comes with privileges, including invitations to real-world events. It’s only $200,000 to join!
Are you in love with a particular artist or brand? An NFT allows you to own something unique from them. Gucci, Tiffany’s, Under Armour, Macy’s even Time magazine have produced and sold NFTs – there is no stopping it.
4M Performance will be publishing a Guidebook on Blockchain technology and the profound impact it will have on all businesses in the future. Email us for a free copy of the Guidebook at firstname.lastname@example.org