How to Buy and Sell NFTs
Words like cryptocurrency, “crypto,” Bitcoin, and dogecoin have begun popping up more and more frequently—a snatch of conversation at the next table at the coffee shop, an article on social media, or even the odd meme. The use of crypto-related terms is on the rise as buying and trading virtual currencies becomes more widespread and trendy.
If you’re an artist, chances are the term NFT has entered into your social sphere, mentioned by friends, colleagues, or encountered online. The relationship between NFTs and cryptocurrency may seem opaque and if you’ve tried to research the subject yourself, you may have found the online explanations have created more questions than they’ve answered.
Hopefully this did not diminish your curiosity, because NFTs are perhaps the most important thing happening in the art world right now. In short, NFTs are tradable assets which enable both online and offline creators to protect, preserve, and profit off their work.
After spending two weeks on Twitter, learning about NFT's and being part of the community, my thoughts began to change. Participating was also exciting and the community aspect very refreshing. I ultimately decided to launch a project on Open Sea, to see if I could sell any NFTs without deep & long term involvement in the community. After a few minutes I sold my first NFT! I was truly excited to sell one, not because of the money but because it was new and exciting. Then I sold 4 more! Then 8 more! In less than 24 hours I had sold out the entire collection of 36 NFTs! What just happened? I have now launched a second collection titled The Trees of Life that is available on Open Sea at a low entry point. This may be a great way for you to enter the NFT space, buying your first NFT through an artist you know & trust.
What Is an NFT?
NFT stands for “non-fungible token” and is a special type of digital file which can be minted and sold. NFTs can be digitally-created artworks, photographs, songs, games, and almost any other kind of media.
Understanding how NFTs work can be difficult, and is less important than knowing what they can be used for and what their potential benefits are. Suffice to say that NFTs are just like regular media files, but encoded using the same technology that generates Bitcoin and other cryptocurrencies. This encryption allows for a level of security and provable scarcity which is vital to creators—we’ll go into this more below.
Whatever media you choose to turn into an NFT can then be listed on special virtual marketplaces. There, they can be bought, sold, and traded to bring profit to the artist and collected by and invested in by various online buyers.
What Are the Benefits of NFTs?
The benefits of NFTs apply to any artist who works online. Through their special encryption and ability to be traded, they provide greater security, profitability, and recognition for creators.
Since the internet emerged, digital artists have struggled to maintain sovereignty over their work. Images can be saved, mp3s can be downloaded, and pretty much any kind of digital file can be transferred at will into the private files of an individual. NFTs cannot prevent versions of your work from being saved, but they can act as a standard for determining and generating authenticity.
NFTs are created using something called block-chain encryption. This is a complex process by which the data that makes up a digital artwork is written into many randomized blocks of computer code. These blocks are quite large and, thus, impossible to replicate or duplicate. Each NFT’s encryption “signature” is stored in a special virtual ledger, so that any version of that file appearing in the future can instantly be recognized as an original or a copy.
This means that online artists can now begin producing and selling their work as they would in the physical world. The sense of uniqueness and authenticity created by block-chain encryption drives up the value and demand for digital artworks in ways never before possible.
Before NFTs, there was little incentive to purchase online art unless you wanted it to be printed and mounted somewhere. Why purchase a digital image or a song when it can be saved via screenshot or downloaded from Youtube? This, of course, is disrespectful and detrimental to the livelihood of creators, but a common occurrence nonetheless.
NFTs redefine digital art as something unique and irreplaceable, like a photographic print or a painting. Now there is greater reason (beyond morality) to own an artwork as an NFT; digital media is no longer just a source of entertainment or stimulus, but a repository of value and an object of scarcity. For the artist, this means more money to be made from each piece of art produced, and vastly increased viability for digital art as a business or career.
Finally, NFTs are quickly rising in popularity which means that artists turning their works into tokens will have a great deal of visibility on digital marketplaces. As the scene develops, these platforms will become akin to real-world auction houses and galleries, providing artists with the representation, recognition, and compensation for their work they deserve.
How Do You Create an NFT?
If you’re already convinced and want to start minting your own tokens for sale on the NFT market, this is how. Setup will take a little bit of work, but once that’s done, you’ll be able to easily create NFTs for all your present and future works.
NFTs cost money to make and money to purchase. This money takes the form of cryptocurrency, and the most widely accepted form of crypto used in NFT-related projects and transactions is Ethereum. The company behind Ethereum also maintains the largest digital NFT ledger and is responsible for much of the block-chain tech which makes NFTs possible.
In order to mint or purchase NFTs, you’ll need to purchase some Ethereum; you’ll also need a place to keep it. Both of these tasks can be completed using a cryptocurrency wallet. A crypto wallet lets you keep your various cryptocurrencies in one place, monitor market values, and buy and exchange the currencies you have. There are many crypto wallet applications out there, each with similar capabilities and support for mobile banking. Among the largest and most trusted are Coinbase and Metamask, and the latter is especially favored for NFT work.
Once you’ve downloaded a wallet and created a secure account, you’ll be able to buy and store Ethereum. Determine the amount you want to spend ($100/NFT is a good baseline, but many sites will let you mint for free) and then use that amount to purchase an equivalent value sum of Ethereum.
As with wallets, there are many places you can then choose to mint your NFT, but a few are more popular and secure than others. Rarible and Opensea are the most widely used forums for minting, buying, and selling NFTs, and Opensea is by far the largest. Opensea allows you to easily upload your image or media file for minting free of charge and only requires a 2.5% commission on final sale price. This makes it the ideal choice for both beginners, experts, creative collectives, and solo artists.
How Do You Sell NFTs?
Once you’ve minted an NFT, you’re ready to sell. Many of the same principles apply to selling NFTs as selling on eBay, Etsy, Studio6 and other online marketplaces. You have the choice either to run an auction with free bidding and a set end date or list your NFT for a set “buy-it-now” price.
Putting a price on your work is probably the most difficult part of selling NFTs. Some artists might feel pressured to list at a low price because they are used to the depressed market of online art which has existed up until now. Professional artists who work in physical media and are making the shift to NFTs may want to sell their work for the same premium prices as their tangible works.
Neither of these instincts are wrong, per se, but it’s important to understand the similarities and differences between selling NFTs and other kinds of work. NFTs are completely unique and bespoke works of art. Buyers are truly purchasing a one-of-a-kind original piece, and prices for these works should reflect that. Of course, there is a difference in value between a piece of pixel art and a piece of fine photography as between a song and an album, but originality, authenticity, and scarcity should be reflected in NFT pricing.
On the other hand, artists working in physical media must recognize that the internet is a different world from the circuit of galleries, showrooms, and social art collecting. No artist should undervalue their work, but creators who are new to the online art world should understand that their real-world reputations may not precede them. Networking, social media boosting, and other kinds of publicity work may be necessary before you find buyers willing to meet your in-gallery pricing criteria for a digital token.
Overall, however, the NFT marketplace is just that—a new market which must be explored, listened to, and experienced in order to understand and find harmony with. With NFTs just now beginning to take off, you might find yourself making more from tokens than physical works.
How Do You Buy NFTs?
If you’re an art collector or an investor, then you’re more interested in buying NFTs. As with minting/elling, you’ll need a crypto wallet and Ethereum to bid on/purchase works.
Many of the same principles apply here as do in the physical art world when deciding what kind of piece to buy. For the collector, simply follow your own intuition, sense of style, and budget. There are many gallery-based apps available which allow you to curate, display, and view your NFT collection online to simulate the idea of a brick-and-mortar gallery or museum.
The challenge is greater for entrepreneurs, especially those who may have confined their investments to physical artworks up until now. They may have to acquaint themselves with the relevant and popular online artists and do some work to understand the artistic and design trends which are popular among NFT traders and internet art circles.
Just like with offline art, however, the thrill of collecting and the potential for monetary gain is still there for buyers. The market for NFTs is growing, but for it to truly flourish, many more buyers should be introduced to and informed about NFTs and marketplaces like Opensea.
In all, NFTs and block-chain tech offer those in the art world new opportunities for profit and visibility. Artists can generate more unique and secure works and collectors and entrepreneurs are presented with new venues for acquisition and investment. Most important of all, NFTs are a means of finally making the internet a more hospitable and lucrative forum for creators of all kinds. Without a doubt, they will remain central to the world art scene for decades to come.