Updated: Dec 31, 2021
NFTs or non-fungible tokens are used to represent the ownership of digital assets. These are unique items that cannot be replaced by anything and can be owned by one person at a time. It uses the blockchain technology of cryptocurrency to exist. These are different from cryptocurrency in the sense that one Bitcoin, or any cryptocurrency, can be replaced by a different Bitcoin which makes them fungible(like most currencies).
Most NFTs belong to the Ethereum blockchain but are different from the ETH since they are individually unique and contain more data. There are other types of NFTs as well.
In this UNICHED article, we will talk about how to create, buy and sell NFTs.
Before you get started
Before we get straight into the steps to create/buy/sell an NFT, it is important to get the prerequisites ready.
Choose a blockchain: Since most NFTs are created on the Ethereum network and most marketplaces that help sell NFT support it, it is a wise decision to choose it.
Create a cryptocurrency wallet: Even though the process of minting is free on some minting platforms like OpenSea, you will still need a wallet to open an account.
Creating an NFT
An NFT can be an image, GIF, a video; literally anything that can be a digitally shared multimedia file.
Choose a type: NFTs can be anything, as we mentioned above, that can digitally exist as a multimedia file. Choose the type of NFT that you will be creating.
Buy some crypto: Depending on the blockchain on which you are planning to create an NFT, you will need some juice in your crypto wallet, think of it as an investment.
Create the digital token: Finish your artwork, whatever it may be, an image, a GIF, or a video. Make sure that you are the sole owner of the property.
Connect wallet to the marketplace: Before minting and selling an NFT, connect your crypto wallet with the marketplace where you plan to mint it.
After minting your NFT on a particular marketplace, there are three things you need to be aware of after you click on “Sell”:
Price or auction time limit: How much your NFT is worth? If you cannot specify the price (or unit of crypto) for your NFT, better to set an auction limiter.
Preferred types of crypto: Choose the types of crypto in which you will be accepting the payments. For safety and whatnot, choose Ethereum as it is the most popular one while considering NFTs.
Network’s fees: The Ethereum network, like every other cryptocurrency network, charges fees for selling NFTs. Factor this in while listing it for sale. These are non-refundable, even if you decide to take your NFT off of the market’s listing.
Making changes to your NFT’s listing on any crypto network might cost you, make sure you are aware of these fees so these don’t come as a surprise. Make sure that potential purchasers are aware of your “ready-to-buy” NFT by taking advantage of various online platforms.
When to sell an NFT?
If you are a creator, then NFTs are a great way to earn money in exchange for your work.
If you don’t need an NFT anymore. Unless holding that NFT shows great potential, sell it immediately before its value deteriorates.
When an NFT’s value increases. Selling an NFT is always a great idea in this scenario.
Let’s get to the steps for buying NFTs.
Buying an NFT/ Trading NFTs
Only buy NFTs if you are a digital art collector or you can gain value by owning a particular digital asset. Buying an NFT just because it is trending is never a good financial strategy. Now let’s get straight to the steps.
Set up your crypto wallet: Just as similar to selling an NFT you will need to set up your crypto wallet with some juice in there, preferably ETH.
Connect to marketplaces: There are a lot of marketplaces already with more popping up. There you can purchase NFTs directly or by bidding.
“Gas fees”: Even though the NFT you might choose to buy is free, there will be fees charged by the blockchain network to append the transaction details to the ledger. Polygon charges the lowest gas fees.
After you complete your purchase, you can access your NFT through your wallet.
NFTs are a great opportunity in many ways. If you are a creator, collector, or opportunist trader, there are loads that can be gained through this process. However, simply jumping on the bandwagon because “everyone is doing it” is wrong. It also must be understood that this is a fairly new technology and the regulations are still evolving. There is a lot of knowledge that should be absorbed before stepping on the field and playing the game.