How to Create an NFT?

More than ten years after the world first heard about Bitcoin, NFTs are taking the crypto world by storm as the latest evolutionary stage of cryptocurrency. Many see them as a new and creative way to build upon traditional asset classes with added functionalities. And with several already having sold for hundreds of millions of dollars, it's safe to say that we'll be hearing that NFTs are not likely to die anytime soon.

But what is an NFT token? The name stands for non-fungible token. This is where NFTs differ from traditional cryptocurrencies or Ethereum-based utility tokens. Most cryptocurrencies are "fungible, “ meaning you can easily swap them for another crypto within the same asset class. Fiat currencies are also fungible as anyone can exchange their Euro for US Dollars, for example. So are cryptocurrencies like Dogecoin and Ethereum — you can easily exchange one Bitcoin for another crypto.

NFTs represent one-of-a-kind unique assets. You can't readily exchange one NFT for another within the same asset class. Non-fungible tokens are also indivisible (i.e. they can't be divided into smaller fractions). An NFT is a digital copy or representation of a valuable asset. It is valuable because it saves information about that asset, such as who owns it. The information on NFTs can't be changed or lost because they are stored on a blockchain. This means they can represent anything valuable, such as artwork, title rights, web domains, collectibles, audio files, and even people's identities. When you own the NFT, you own the product it stands for, not necessarily the copyright.

CryptoKitties is one of the best-known NFTs in the market and has achieved mainstream popularity due to its use as a trading instrument for digital collectibles and games.

Because of its popularity, CryptoKitties has sparked debates on whether NFTs are actually viable. The game is a breeding game wherein cats can be bred, taken care of, and traded for gifts for other players or for exclusive NFTs. To breed cats in CryptoKitties, two cats must be combined. Users can pay a fee to combine the two and create new NFTs that they can then sell on the blockchain.

CryptoKitties are scarce because their creators made a limited amount based on a specific algorithm that caps breeding. The game has also generated controversy due to its impact on the market and popularity among NFTs, as traders attempted to corner markets or purchase cats at a discount to resell them at a higher price elsewhere (pump and dump) or sell their cats in bulk at a profit. The most expensive cat ever sold is ‘Founder Cat #40,’ and has an estimated value of $1,064,022.75

With this info in mind, let’s look at the mechanics behind creating NFTs and the ways to create or “mint” an NFT as there are several:

The methods to create an NFT include:

1. Using a decentralized application (DApp)
2. By using a contract with a private key
3. By using an ERC-721 non-fungible token
4. Using the Ethereum NFT feature
5. In more complex cases, we can use Ethereum's opcode system to implement our own rules

The most common way of creating NFTs is by using decentralized applications (Dapps). Dapps gives users the freedom to build their non-fungible tokens and integrate them with smart contracts on the Ethereum blockchain through processes like smart contract development or Dapp development. These methods ensure seamless creation and integration of NFTs while leveraging blockchain's transparency and security. As the demand for NFTs grows, many platforms are expanding their capabilities by developing mobile apps. Through iOS application development and Android application development, creators and collectors can interact with NFTs more conveniently, managing their tokens, tracking transactions, and engaging with the marketplace right from their smartphones.

Choose a Digital Asset

Let's begin with the fundamentals. Before you create an NFT, you'll need to determine which unique digital asset you want to convert. It could be a commissioned work of art, a photograph, a song, a collectible video game, a meme, a GIF, or even a tweet. A non-fungible token (NFT) is a one-of-a-kind digital item with a single owner. The rarity determines the NFT value.

Before proceeding, ensure that you own the intellectual property rights to the item you wish to convert to an NFT. You risk facing legal consequences if you create an NFT for a digital asset that you do not own.

Decide what framework you will use to create your NFT. There are a variety of DApps that can help you with this process.

If you're using a DApp that supports ERC-721 tokens, you'll need to do the following:

1. Write a contract
2. Create your ERC-721 token
3. Distribute the token to different accounts of your choice
4. Create an account that can be used on the new smart contract to keep track of ownership
5. Write out the actions that each account can take
6. Make sure it works properly

Once you create an NFT, you must send it to a special address so it doesn't get lost or corrupted by malicious transactions.

Set Up a Digital Wallet

You need a digital wallet to store your NFTs and manage transactions such as minting and selling. To set up a wallet, follow these steps:

• Research popular options like MetaMask, TrustWallet, and Coinbase Wallet; learn about their pros and cons and pick the one you will work with.
• Install the wallet app on your phone or browser.
• Register with your email and create a strong password to create an account.
• Write down your backup seed phrase and store it in a safe place so you can secure your wallet. This ensures your wallet can be recovered if you lose access.

You will then use this wallet to connect to NFT marketplaces and receive payment in cryptocurrency for the digital assets that you sell.

Choose An NFT Marketplace

You must go to a certain marketplace if you wish to sell an NFT. Notable platforms for listing non-fungible tokens include Mintable, Opensea, SuperRare, and Rarible. You must link an Ethereum wallet to the platform from which you are transferring the assets if you want to sell an NFT. The majority of NFT marketplaces are simple to use and feature an intuitive design.

If you have an account, you can apply to offer your collection directly on decentralized cryptocurrency exchanges like Binance, which recently began supporting NFTs. They are subject to Binance's rules and internal policies, though, and there are requirements you must fulfill before they can be put up for sale. 

Each platform has different features, so consider these factors:

• Platform Fees: Some marketplaces charge gas fees (Ethereum-based platforms) or platform-specific transaction fees to create NFTs.
• User Base: A larger user base increases visibility for your NFT.
• Supported File Types: Ensure your digital asset’s format is compatible with the marketplace.
• Blockchain Options: Ethereum is the most popular blockchain for NFTs, but alternatives like Solana, Tezos, and Binance Smart Chain offer lower transaction fees.

Mint Your NFT

The process of creating NFTs is referred to as "minting," which is similar to the process of creating metal coins. When an NFT is created, it is then issued a unique token on the blockchain.

When someone mints an NFT, it is converted into a digital version of the work, which can be viewed on a blockchain or a DLT (Distributed Ledger Technology). These types of coins can be viewed publicly and easily traded. With blockchain technology, the creator of these types of coins can be assured that their work is the legal owner.

An NFT can be issued in various forms, such as single or many tokens. Unlike other cryptocurrencies, which are fungible, each NFT is unique. This ensures that the creator receives a portion of the proceeds from the asset sales. Some NFTs additionally have smart contracts that allow the seller and buyer to set their rights and obligations.

Follow these steps to mint an NFT:

• Upload the File: Most markets offer a "Create" or "Mint" button that allows you to upload your asset.
• Add Metadata: This includes the name, description, and any other information about your NFT. Make sure the file format and size are consistent with the platform's specifications.
• Choose Blockchain Settings: Some marketplaces allow you to select the blockchain on which your NFT will be minted.
• Pay Minting Fees: This expense is normally compensated by bitcoin, so make sure your wallet is well loaded.

Set a Price and List for Sale

Once you have finished minting the NFT, you can set a price and list it for sale. Start by:

• Choosing a Pricing Model:

Fixed Price: Set a non-negotiable price for your NFT.

Auction: Allow buyers to bid for your NFT. This can create excitement and potentially drive up the price.

• Listing Your NFT: Once the price is set, confirm the listing on the marketplace. Verify the ownership and authenticity of your asset.

Promote Your NFT

Creating NFTs is only the beginning; promoting them is essential for visibility. Here are some strategies:

• Social Media: Share your NFT on platforms like Twitter, Instagram, and TikTok.
• NFT Communities: Engage with communities on Discord and Reddit to connect with potential buyers.
• Collaborations: Partner with influencers or other creators to expand your reach.
• Storytelling: Share the inspiration behind your NFT to add emotional value.
• The more effort you put into marketing, the better your chances of selling your NFT.

Transfer Ownership & Finalize Sale

If you want to exchange or sell your NFTs, you need an Ethereum address corresponding to the new owner. You can also leave them as an investment for someone else to use. The new owner can eventually transfer ownership by entering the old address into their new wallet.

If you use ERC-721, you'll do this with an Ethereum account and a contract key. The process is very similar to the above method, but it's done slightly differently. One thing that may slow down the transaction is that the Ethereum community must approve each version of the ERC-721 contract before it's used on the blockchain.

Follow these steps once you’ve sold an NFT to transfer ownership:

• Confirm the Sale: Check the transaction status on the blockchain to ensure payment has been received.
• Transfer the NFT: The marketplace will guide you through transferring the NFT to the buyer’s wallet.
• Pay Transaction Fees: These fees may be automatically deducted from the sale price.
• Verify Ownership: Use blockchain records to confirm the ownership change.

Additional Tips and Best Practices

Part of NFTs' appeal comes from the so-called "cool factor," as they give the average internet user another way to get into cryptocurrencies. For many people, crypto is out of reach. Many people feel like they have missed out on the opportunity to buy and own crypto assets like Bitcoin and Ethereum. But NFTs are regarded as the 'next big thing' in the crypto sector, and many celebrity factors also play in this.

NFTs are particularly lucrative for digital artists with a large following. Even established auction houses like Sotheby's note the nascent NFT space. The world-famous auction house CEO recently announced a partnership with Coindesk for the sale of NFT-based digital artwork from the anonymous artist Pak. Elusive British artist Banksy has also dabbled in NFTs. And this is just the beginning.

As the market continues to grow, we will be able to see how NFTs become the gateway for new entrants into this sector and how they will ultimately revolutionize the way we think about ownership, assets, and virtual value. For businesses looking to tap into this growing trend, NFT Marketplace Development offers an opportunity to create platforms where users can buy, sell, and trade unique digital assets seamlessly.