How to create a Non-fungible Token (NFT)

NFT

NFT , or Non-Fungible Token, is a special type of cryptographic token that uses blockchain technology to create digital assets that are not reproducible.

NFTs are different from known interchangeable cryptocurrencies such as Bitcoin (BTC), Ether (ETH), or Monero (XMR). For instance, you can exchange bitcoins for other bitcoins.

Although NFTs are used in a variety of industries such as gaming and digital collections and are often built based on ERC-721 standard and on the Ethereum platform, NFTs used on other blockchains such as the BEP-721 Binance Smart chain protocol in 2021.

 

What is a fungible token?

A fungible asset means that it can be exchanged for a similar asset without a price drop. Determinability also determines the characteristics of an asset, such as its divisibility or value.

For example, a $10 bill is quite similar in value to another $10 bill. When you borrow a $10 bill from someone, you do not have to return the exact same bill because they are of equal value.

Fungible tokens are tokens that can be traded together and their price remains the same. In the field of cryptocurrencies, one bitcoin has a value equal to another bitcoin and its value is fixed regardless of its owner or history.

However, in the case of non-exchangeable tokens, the price of an NFT token is different from any similar token. Individual characteristics determine their uniqueness, so they are as irreplaceable as real-world assets such as precious stones, works of art or collectibles.

Let us assume that I have a movie ticket to watch a movie and you have another movie ticket, we both have tickets but can these tickets be exchanged?

Therefore, non-fungible tokens like these tickets are a digital manifestation of assets that can contain information that has a variety of uses and unpredictable value.

 

NFT

Features and benefits of non-fungible tokens

The following points are the Features and benefits of non-fungible tokens:

Scarcity

The value of non-fungible tokens is due to their Scarcity. Whilst NFT developers can make these tokens as much as they want, by limiting their number, they increase their Scarcity.

Indivisible

Although this is not the law, most non-fungible tokens are not broken down into smaller units, or you buy an entire piece of digital artwork or do not buy it at all.

Uniqueness

This is the most important feature of an NFT. NFTs have tabs of fixed information that record their uniqueness. Look at this feature as a certificate of authenticity.

Transferable tokens

Unlike tradable tokens, non-exchangeable tokens are traded in certain markets. However, their value depends on their uniqueness.

Originality

Non-fungible tokens are based on blockchain technology, so you can be sure of the authenticity of your NFT, that it is almost impossible to make something fake in a decentralized immovable ledger.

Proprietorship

This also refers to NFT’s use of decentralized platforms where no owner can change the data after registration.

Why NFTs are valuable?

Thanks to the advent of blockchain technology, gamers and collectors can become the immutable owners of in-game items and other unique assets and make money from them as well. In some cases, players can build and monetize structures such as parks in the virtual world, such as The Sandbox and Decentraland. Players can also sell individual digital items they earn while playing in secondary markets, such as costumes, avatars, and in-game currencies.

Artists can sell their digital work directly to audiences around the world without the need for auctions, thereby retaining a greater share of the profits from the sale. Royalty can also be programmed as digital art, and each time a work of art is sold to a new customer, the creator receives a percentage of the sales profit.

Known as Captain Kirk in the Star Wars series, William Shatner entered the field of digital collectibles and issued 90,000 digital cards of his image on the WAX ​​blockchain store, receiving $1 per card, and each time this Cards are resold and their copyright is earned.

Why non-fungible tokens are important?

NFT tokens have the potential to be a key component of the blockchain-based digital economy, which can be used in a variety of areas such as video games, digital authentication, licensing, certification or fine arts, and even granting a fraction of the property. Storing ownership and data identity on the blockchain increases data integrity and privacy, as well as easy transfer and management without the need for trust in these assets can reduce friction (fees) in the global trade and economy.

Non-fungible tokens application fields

Gaming

NFTs are popular in the gaming industry as these tokens solve some inherent problems. For example, top games like Fortnite have banned the sale of features and accessories such as weapons and skins. With non-fungible tokens, these features can be easily transferred in different games. NFTs will thus help the in-game economy.

Digital Capital

Consider Decentraland. In this game, participants can have a virtual field. Another example of this is the ENS (Ethereum Name Service), which uses NFTs. ETH domains make buying and selling easier.

Identification

Non-fungible tokens are ideal for counteracting counterfeiting. Examples of this include digitizing our identities, including our academic credentials, medical credentials, and even our appearance. Digital artists can also convert their work to NFT for copyright reasons. An instance of the use of NFTs in authentication involves converting physical game tickets into irreplaceable tokens and finding counterfeit artifacts.

Collectible works

NFTs are a new beginning for the world of collectibles, which is why ordinary collectors are entering the world of digital capital.

How do NFTs work?

NFT is a special type of digital token that uses a blockchain-like system to create digital assets that cannot be reproduced. Many works of art and digital have become NFT tokens to this day, and this is a sign of their originality and value.

For instance, Jack Dorsey, the CEO of Twitter, recently auctioned off his first tweet on the social network Twitter, which happened to be the service’s first tweet, as an NFT token and an Iranian user, bought the token for $2.9.

NFT, which stands for Non-Fungible Token, actually acts as a certificate of authenticity. In the real world, classics and art objects are often sold at auction with a receipt indicating the authenticity of the item. NFT does the same thing for digital items. In the following, we will discuss how to build NFT.

NFTs certify their uniqueness in GIF, JPEG, MP3 or any other format. This technology creates a new kind of ownership for digital files that was not previously possible. NFTs can be bought, sold, or even destroyed as physical objects. Thanks to the blockchain technology, NFT will be available to anyone with Internet access.

 

NFT

How to create an NFT?

In order to create an NFT, you do not really need a deep knowledge of the world of cryptocurrencies or blockchain. In fact, with the help of some tools and some ether, you can make NFT. If you are not familiar with these cases, there is no problem. All this can be done in a few minutes with a regular smartphone. The followings are the steps to make a non-fungible token:

  1. Choose your item

Let us start with the basics. If you have not already done so, you need to specify what unique digital assets you want to convert to NFT. It can be a custom drawing, image, music, video game collection, meme, GIF or even a tweet.

  1. Select your blockchain

Once you have selected your unique digital asset, it is time to start the process of converting it to NFT. It starts with determining the blockchain technology you plan to use for your NFT. The most popular blockchain among NFT artists and creators is Ethereum. Other popular options include Tezos, Polkadot, Cosmos, and Binance Smart Chain.

  1. Set up your digital wallet

If you do not already have a digital wallet. You need to set it up to create your NFT since you need some digital currency for your initial investment.

Once you have set up your digital wallet, you have to buy some digital currency. Most Ether NFT platforms accept the digital currency of the Ethereum blockchain platform. If you already own cryptocurrency elsewhere, you will need to attach it to your digital wallet. Therefore, you can use it to create and sell NFT.

  1. Choose your NFT market

Once you have a digital wallet and some digital currency, it’s time to start building (and, hopefully, selling) your NFT. To do this, you must select an NFT market. Some of the top NFT markets are OpenSea, Axie Marketplace, Larva Labs / CryptoPunks, NBA Top Shot Marketplace, Rarible, SuperRare, Foundation, Nifty Gateway, Mintable and ThetaDrop.

To find the right platform for NFT you need to research every NFT market. For example, Axie Marketplace is the top NFT online game Axie Infinity. Meanwhile, the NBA Top Shot is a focused basketball market.

It is also important to note that some markets need their own digital currency. OpenSea is usually a good place to start. It lets you build your own NFT and is a leader in NFT sales.

The NFT market sold $3.4 billion worth of NFT in August 2021 alone. Once you have selected your NFT marketplace, you need to connect it to your digital wallet. This allows you to pay for your NFT and keep sales revenue.

  1. Upload your NFT file.

Now you are finally ready to build your NFT. Your NFT Marketplace should have a step-by-step guide to uploading your digital file to your platform. This process allows you to convert your digital file (a type of PNG, GIF, MP3 or any other file) to a marketable NFT.

  1. NFT set up the sales process

The final step in the NFT development process is to decide how you want to monetize your NFT. Depending on the platform, you can:

  • Sell ​​it at a fixed price: By setting a fixed price, you allow the first person who is willing to pay that price to buy your NFT.
  • Set up a timely auction: A timely auction gives your NFT enthusiasts a time limit to submit their final bid.
  • Starting an Unlimited Auction: Unlimited auctions do not set a time limit. Instead, you have the right to end the auction whenever you want.

NFTs creation process and sales

In order to do this you need to follow these steps:

  • You must set a minimum price.
  • (In the event of an auction), determine your franchise to continue your NFT liquidity in the event of a resale on the secondary market and the duration of the auction (if scheduled).
  • Keep commissions in mind when setting the minimum price because if you set the price too low, you may lose your NFT sales.

Unfortunately, the cost of building and selling NFT can be costly and confusing.

Depending on the platform and price, you can pay the list fee, NFT build commission, sales commission and transaction fee to transfer money from the buyer’s wallet to your wallet. Fees can also fluctuate due to fluctuations in the price of digital currencies.

For this reason, it is important to take a close look at the costs you have to pay to build and sell your Non-Fungible Token to make sure they are worth it.

 

In conclusion

It should be noted that the Non-Fungible Token space is still young, so we have to wait for the emergence of new platforms alongside current Non-Fungible Token projects in 2022. From now on, we should see the Non-Fungible Token slowly move from games like cryptocurrencies to painting, Defi, digital identity, and other usable items. In fact, the scope of its applications depends only on the imagination of the cryptocurrency community and developers.

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