What is Minting NFT? Everything you need to know
Over the course of the last decade, the weird and wonderful world of digital assets has evolved and expanded at break-neck speed.
Anybody can now easily buy, sell, and trade digital assets through a number of sites, brokerages, and exchanges — cutting out foreign exchange rates, borders, and central banks to make transactions fast and simple.
When people talk about trading digital assets, the first thing that’ll probably pop into your head is cryptocurrency. But the truth is that crypto assets go a whole lot further than currencies you can use to buy and trade goods. You can also turn real, analog assets like works of art or real estate into digital commodities that you can then keep or sell.
Those commodities are called non-fungible tokens (NFTs), and they can be a great investment under the right set of circumstances.
This guide explains what an NFT is, how minting NFTs works, and whether it's better to buy an NFT or mint your own.
What is an NFT?
Before we speed right into how you can create non-fungible tokens (NFTs), let’s pump the brakes and talk about what an NFT is.
Simply put, an NFT is a cryptographic asset that’s supported on a crypto blockchain ledger. NFTs are designed to represent a real asset digitally. That could include digital assets like a picture or graphic, an in-game avatar, event tickets, or a domain name to physical assets like real estate properties. (To learn more about various NFTs, read our guide to different types of NFTs.)
Each NFT has its own unique metadata and identification codes, which ensure that it’s 100% different from every other NFT. NFTs are normally held on the Ethereum blockchain. That being said, you can often find NFTs on other blockchains like Solana and DOT.
Unlike cryptocurrencies or fiat currencies (like the US Dollar or Mexican Peso), NFTs can’t be exchanged at equivalency or traded. That’s because NFTs are all 100% unique — which means you can’t charge three NFTs for pizza and a soft drink. Fungible tokens like the USD, on the other hand, are all identical. This makes them ideal for commercial transactions, as one dollar isn’t worth more than the next.
So if NFTs aren’t used to pay for goods and services, what are they good for?
NFTs are essentially designed to give people the opportunity to monetize their creative work. This is ideal for artists who often need to rely on fancy art galleries and auction houses to sell their works of art or musicians wanting to protect music files.
By turning artwork into an NFT, an artist can quickly and efficiently sell their digital artwork (or real artwork) all over the world. It’s even possible to program royalties into an NFT so that the original artist is able to get a percentage of any future sales of the artwork. As a result, artists avoid high commissions by selling artworks through NFT markets, and they can even generate passive income further down the road.
But NFTs aren’t just great for designers or other visual artists. There’s also been a surge of interest in utility NFTs. These are non-fungible tokens that represent early access, an opportunity, or some other type of benefit for the individual who’s buying it.
Bearing all that in mind, it’s little wonder the NFT marketplace grew to almost $41 billion in 2021. This technology offers a few attractive benefits for both investors and artists. Best of all, anyone can create an NFT — although there are a few important considerations you’ll want to think about before getting involved. (If you’re worried about the legitimacy of an NFT, check out our guide “Are NFTs a scam?”)
What is minting NFT?
When you create an NFT, it’s called “minting.” You can mint any digital asset (and some physical assets) into an NFT using a fairly simple process. We’ll break it down for you.
To get started minting an NFT, you'll need a crypto wallet. After you’ve set up a digital wallet for crypto, you’ll need to connect it to an NFT marketplace. There are several options here. Some of the most popular NFT marketplaces include OpenSea, Coinbase NFT, Rarible, Nift Gateway, Magic Eden, and plenty of others.
Depending on the cryptocurrency wallet you’re using and the NFT site you’ve connected to, you’ll either be asked to connect your wallet using a smartphone QR code scanner or download the wallet onto a computer.
After that (assuming you want to turn a digital file into an NFT), you’ll need to upload your file onto the site and give it a name. Different NFT marketplaces will have different fields for you to complete, like a description field, a link back to your website (or another applicable site), and the blockchain you’d like to base your NFT on.
Your average online marketplace for NFTs will also allow you to decide whether you want to set up royalties so that you’ll get paid every time your NFT is bought and sold in the future.
Once you’ve completed every field and proceed, your NFT will get minted. Your NFT will then be placed into your crypto wallet, and you’ll be able to keep it there until you want to sell your digital items to somebody else.
It’s important to note that after you’ve minted something on a marketplace as an NFT, you can’t mint it a second time. If you ever try to re-mint your NFT someplace else, most legitimate platforms will either delete your NFT or block you from using their marketplace again.
How do you sell an NFT after minting it?
There are a number of NFT marketplaces you can use to sell an NFT after you’ve minted it — but there are a few things you should know first.
Selling an NFT requires computing power, so legitimate NFT marketplaces are all going to charge you a transaction fee. As these are crypto sites, that commission normally needs to be in a cryptocurrency. That means before you sell an NFT, you should make sure there’s a cryptocurrency like Ethereum, Bitcoin, or Solana in your digital wallet.
On some marketplaces, you can simply transfer crypto from your wallet onto their marketplace to fund a sale. But other NFT marketplaces may require you to buy crypto from their own site before you’re allowed to advertise a sale.
NFT marketplaces normally signpost the way you can kick-start the sales process pretty loudly. It’s simply a matter of selecting the type of sale you’d like to take on: a timed auction or a fixed price (“buy it now”). You’ll then need to complete your listing by inputting descriptive information that’ll tell potential buyers about the NFT.
From there, the NFT marketplace you’ve chosen will calculate your selling fees and request payment from your digital wallet. After making payment, the sale listing will go live.
You’ll normally be able to engage with potential buyers firsthand depending on the platform’s capabilities — and you can even choose to create more NFTs to add to your collection. This generally attracts attention and can generate more interest in an existing sale.
Be aware that there’s no such thing as a sure thing in the world of digital art. As a result, you might have to wait for quite a while before you can sell your NFT for a profit. Unless you’ve already made a name for yourself, you’ll still probably need to drive up your profile as an artist before the price of your NFT increases enough to make you money.
However, if you already have a dedicated audience, NFTs can be a very effective way to monetize that audience while providing some unique creative work that you wouldn’t otherwise do.
Is it better to mint or buy NFT?
If you’ve been reading up on NFTs and are attracted by the billions of dollars invested in the NFT market, you’re probably wondering about the best way to acquire an NFT.
To get an NFT, you generally have two options: you can buy an existing NFT from somebody else on the market, or you can mint an NFT yourself. There are a few pros and cons to each method — so to help you get started, we’ll walk you through both options.
Level of risk
The first thing that you need to consider when trying to decide whether you’d like to buy an NFT or mint one is how much risk you’re willing to take on.
When you buy an NFT on a legitimate NFT marketplace, you’re going to have a lot of facts at your disposal. You’ll be able to use all of the details in the listing, and you can do some due diligence by researching the seller and previous NFTs they’ve sold. Some NFT marketplaces even let you chat with the buyer to ask them questions about the NFT and the digital asset the NFT is based on.
Depending on the price and historical performance of the NFT you buy, it can be less risky than minting an NFT from scratch.
When an NFT project is in its initial stages, it’s pretty hard to predict what sort of demand there’s going to be. That means you could end up spending loads of time and energy creating an NFT and then paying a marketplace to list your sale — only to end up finding out that nobody wants to buy it.
You can do plenty of market research to look at trends and similar prices. But there’s no guarantee you’re going to make any money creating an NFT.
Next, there’s the cost of getting your hands on an NFT.
Generally speaking, minting your own NFT is going to be the cheapest option. Depending on your NFT platform, you’re normally looking at a relatively small commission (or “gas fees”) to power the minting process. Some NFT sites will even let you mint an NFT for free.
If you’re minting an NFT as part of a new project, the gas fee can sometimes be a bit higher because you’ll need to pay a set-up fee. If you’re minting a new NFT as part of an existing project, the costs will typically be way lower — although this will depend on the quality of the project and the marketplace you’ve chosen.
When you buy an NFT, you’re looking at a huge range of potential costs. If you’re able to identify a lucrative NFT project early on, you might be able to snag that NFT on the market before the price tag rockets to the moon.
If you wait until the NFT project gains traction, you’ll probably have a lot more confidence in its sustainability and its value — but so will lots of other investors. As a result, the price of that NFT is probably going to be a lot more expensive.
Amount of work involved
Finally, there’s the amount of work involved you should consider.
Although buying an NFT can be a financial risk, it’s incredibly simple to do. All you’ve got to do is log into an NFT marketplace, browse projects, and then identify which NFT projects look like they’re going to go up in value over the coming weeks, months, or years.
By contrast, you could opt to mint your own NFT. But minting NFTs can be a pretty involved process.
You’ll need to create your digital asset, set up and fund a digital wallet, choose a marketplace, and then mint your NFT. If you plan on reselling that NFT to generate a profit, you’ll then need to do your own marketing to drive interest in each potential sale.
That typically means establishing a social media presence associated with the project, creating and populating a website, and engaging with potential investors to convince them that your NFTs are worth buying.
Sure, that sounds like a whole lot of work, but it can also be highly rewarding and generate a decent profit. (Again, an existing audience of fans can reduce the risk and exponentially increase the reward potential here.)
If you’re looking for tools that can help you analyze NFTs and decide whether you’d rather buy or mint, you’re in luck. There are plenty of analytics tools to choose from.
One example is BitDegree, which enables you to research NFT collections and look through all the online data associated with its NFTs to decide if they’re a smart investment. Right now, BitDegree follows more than 350 NFT collections from three different protocols.
Or, if you’re on the hunt for bargains, you may want to look at NFT OnChained. It’s a tool that tracks underpriced NFT listings. It uses machine learning to figure out the fair value of NFTs by looking at rarity, market data, and their traits.
But those are just the tip of the iceberg. There are many other tools out there that can help you analyze the market or decide where you’d like to mint an NFT. Just make sure to do your homework and understand the site you’re using before you dive deep.
At the end of the day, the NFT market offers individuals and companies some really unique opportunities to monetize their work. That’s why the market has increased so dramatically — and it’s also why so many people are considering minting their own NFTs.
Thanks to a handful of dynamic minting platforms, minting NFTs is a pretty straightforward process. Buying an existing NFT is even easier. Fortunately, there are loads of great tools you can use to help you monitor and analyze the NFT market — and Stack can help you organize those tools and stay on the ball at all times.
You can even buy Stack NFT, which represents an ownership deed for Stack PRO lifetime license. We’re also selling Unique Cursors as the Art representing NFTs, and the project goes hand-in-hand with loads of great perks.
And if you want to learn more about digital assets and how you can maximize your efficiency, check out the Stack blog. You’ll find loads of information on NFTs, products, design, business, philosophy, and everything in between.