Making money as an artist can be hard – but the radical invention of NFTs just made it a little easier.
NFTs, or non-fungible tokens, are like art that lives on the blockchain – right alongside Bitcoin and other cryptocurrencies. Since they create a unique footprint, they allow a digital artist to sell digital art as “originals,” with some artists making millions without giving up the license to their work (or even anything tangible).
To date, artists ranging from hobbyist graphic designers to Banksy himself have sold over $500 million worth of NFTs. So if you’re an artist looking to profit more from your hard work while connecting with a growing online community, NFTs may be hard to ignore.
First things first: what are NFTs?
An NFT, aka non-fungible token, is a data point stored in blockchain technology that certifies a digital piece of media to be unique. In short, it’s a way to create an “original” version of a digital work.
To illustrate, consider this photo of a cat with a martini, created by artist FA6596. As a JPG, it may be downloaded an infinite number of times. You can even right-click and download it for free right now if you want.
But the version that lives on the blockchain is entirely unique, making it one-of-a-kind and allowing FA6596 to sell it as an original.
NFTs can be a hard concept to grasp, so here’s an analogy you can use on your friends and potential buyers:
An NFT is like a “certificate of ownership” for a digital work. It can be for a .JPG, a .gif, or even a Word document. NFTs are all the rage in the art world right now because they allow artists to sell “originals” of non-tangible art.
For thousands of years, artists have been able to profit from selling their original works – the buyer hands them cash, and the artist hands over a physical painting, sculpture, or other tangible creation. At that point, it’s pretty clear to the world who the new owner of the original work is because, well, they have it hanging in their house.
But selling “originals” has proven problematic for artists in a digital medium.
Let’s say you’re Quantum, a graphic design artist made popular by your slick renderings of fictional cars. Your gorgeous rendering of a cyberpunk supercar is making the rounds, so you’d like to sell it for profit.
You can sell commercial licenses all day for $50 a pop – but how do you sell an original for $5,000? What can you offer a buyer that’s different from a commercial license? I mean, you could email them the raw file… but that’s not what they want.
They want definitive, irrefutable proof that they own the original. A certificate of ownership that’s both publicly viewable and etched in stone.
Read more: What Is An NFT? – How Nyan Cat Was Sold For $600,000
NFTs are etched onto the Ethereum blockchain
^That’s my personal submission for “most 2021 sentence ever.”
Anyways, NFTs needed both blockchain tech and a special crypto called Ethereum to become a reality.
Bitcoin creator Satoshi Nakamoto launched the first blockchain in 2009 – a virtual online “ledger” where users could record “blocks” of data that could never be deleted or overwritten.
At first, the blockchain was just used to safely record and store Bitcoin transactions. But over time, entrepreneurs got wise to the blockchain’s limitless potential. For example, why limit the type of data we can upload to just financial records? What if we could upload JPGs, GIFs, and more?
Such thinking gave rise to Ethereum, the second most popular crypto behind Bitcoin. Ethereum, launched in 2017, allows users to record more types of data to the blockchain – for instance, a photo of a cyberpunk supercar.
In short, uploading your work to the blockchain creates a one-of-a-kind version of it – a version you can sell as an “original” to an eager buyer.
Read more: Will NFTs Increase Ethereum’s Value Over Time?
Where can you buy and sell NFTs?
Currently, the most popular online NFT marketplace is OpenSea.
OpenSea lets you browse their NFT collection, and even mint and sell some of your own. Due to its popularity, clean design, and low fees, OpenSea will be the NFT platform I use in a second to show you how to mint a new NFT.
How to create NFTs, step-by-step
The process of “minting” and selling your own NFT is surprisingly simple in some areas and a bit more laborious in others.
1. Create a crypto wallet
Before going any further, you’ll need a virtual “safety deposit box” to store both your Ethereum and your NFTs. In the crypto/blockchain world, this is called your crypto wallet (you can find some reputable wallets in our piece: Best Crypto Wallets).
You can create a digital wallet for free using MetaMask, which even has its own Chrome Extension for easy access (the Coinbase wallet is also a good option).
Let’s not buy any Ethereum just yet, since I’ll first need to determine how much is needed to list the NFTs. That way, you can buy the right amount of ETH once and save on some trade fees.
2. Link your wallet to OpenSea
Once you’ve installed MetaMask, head to OpenSea and click “My Profile” in the top right:
From here, OpenSea will prompt you to connect to your newly-minted MetaMask wallet. Once you’ve performed those few clicks, you’ll be brought to your main dashboard.
3. Create a “collection” of your NFT art
Next, create a collection where your NFTs will be stored. You can think of this like your NFT equivalent of an Etsy or eBay seller’s page.
From the dropdown menu in the top right, click “My Collections”:
Then, “Create a Collection”:
At this point, we’re still not creating any NFTs yet – just decorating your storefront aka artist’s page:
However, there are some critical settings on this page to pay careful attention to. For example, here is where you can set the Royalties you’d like to receive anytime a buyer resells your NFT artwork, and where you’d like the ETH automatically deposited:
Once you’ve chosen a name and URL for your collection, click “Create!”
4. Add items to your collection
Now that you have a bonafide collection page, let’s add some “items” aka art that you intend to convert into NFTs:
OpenSea lets you create NFTs from the following file types:
To give you an example, I’m going to upload a JPG – specifically a screenshot of my MU30 contributor page:
Here is where you can also adjust some settings for your NFT, like whether to include bonus content for the buyer or even if you’d like to create multiple NFTs of the same item!
Congrats! You’ve just created your first NFT:
Click “Visit,” and you can see your NFT’s trading history, the collection it belongs to, etc.
Next, it’s time to list and price our NFT. Click “Sell” in the top right.
5. List your NFT for sale
Once you click “Sell,” you’ll be brought to a listing page. This page may be familiar to anyone who’s sold on eBay, but surprisingly even more streamlined:
Here, you can choose whether you’d like to sell your NFT at a fixed price or to the highest bidder, schedule your sale, or even generate a private URL so only the esteemed buyers of your choice will even be able to see it.
Remember that OpenSea deals in Ethereum – they’re not interested in your dollars – so your listing price will be in ETH, not USD. At least they’ll show you the value of your listing in USD below your asking price:
I don’t think my face is worth over $2,000, so I’m going to list my NFT for 0.05 ETH, or roughly $115 USD in today’s ETH prices.
If you were bracing for your first minting fee, here it is. OpenSea charges a “gas fee” to cover the high computing resources it requires to list and process your NFT transaction on the blockchain. In my case, it’s around $26 worth of Ethereum.
As MetaMask points out, there are insufficient funds in the wallet to cover the gas fee – so let’s go buy some ETH!
6. Buy some ETH
Now that you know roughly how much ETH you’ll need to list our NFT (0.04 should cover it), let’s go buy it.
Click the wallet icon in the top right of the OpenSea dashboard and choose “Add Funds”:
Then, you can either deposit ETH you bought on an exchange like Coinbase or eToro, or buy it directly with a credit card:
Now, although it only costs 0.0112 ETH to list this NFT for sale, you may want to list multiple – and if you don’t want to pay transaction fees for multiple withdrawals. So, for this example, I’ll just pull out $100 worth of ETH.
Conveniently, once you click “Continue”, MetaMask will bring up your wallet address automatically so you can easily copy it into OpenSea. You can think of your wallet address like your combined account/routing number.
Since I won’t be completing the transaction myself, I won’t have any more screenshots to share. Not only am I HODLing my Ethereum – I don’t want to list an NFT for sale that consists of work belonging to another artist (MU30’s site designer).
But I’ll walk you through the rest in plaintext.
Once you check out and pay your gas fee, your NFT will officially be listed for sale! Here’s an example of an NFT listing:
Finally, as for fees, sellers on OpenSea pay 2.5% of the sale price back to OpenSea once a buyer makes a purchase. Ask anyone who’s sold through an art gallery – that’s not bad.
That’s just OpenSea’s fee, though – you’ll have to pay that gas fee to the miners keeping the blockchain alive, transaction fees when you buy ETH, and another transaction fee when you convert the ETH from your sale back into USD.
How much money can you make selling NFTs?
Some high-profile NFTs have sold for more than the cost of a house (or a whole neighborhood).
- Beeple sold Everydays – The First 5000 Days for ~$69 million.
- Zoe Roth sold Disaster Girl, the meme in which she starred, for ~$400,000.
- Chris Torres sold the Nyan Cat gif for ~$580,000.
But the vast majority of NFTs sell for less than $200, if at all.
The value of an NFT is entirely based on supply and demand. If you already have a large following as an artist, chances are there will be buyers for your NFTs. If not, you may have some work ahead of you to market yourself and get your NFTs off the auction block.
Who’s buying NFTs and why?
When a buyer buys an NFT, they’re effectively getting a stamp on the blockchain that says:
“Steve owns the Nyan Cat NFT.”
Sometimes an artist will include bonuses with their NFTs like a limited number of licenses, but that’s pretty much it. They’re not receiving anything physical, they’re not getting exclusive rights, none of that.
So no offense to the NFT market, what for the sake of understanding your buyers… what kind of person would buy an NFT?
NFT buyers seem to boil down into one of three profiles:
- The investor. Just like Beanie Babies, trading cards, and Bitcoin, many people buy NFTs simply because they think they’ll be worth more in the future. The investor isn’t such a bad buyer to have, since you can design your NFT so that every time it sells again to someone else, you get an automatic commission.
- The showoff. Some people buy NFTs just to say they have them. After all, if $600,000 was like $6 to you, wouldn’t you be at least a little tempted to buy Nyan Cat so the world would know you as the rightful owner?
- The supporter. The final category of NFT buyer, and the one you’re most likely to sell to, is the supporter. There’s a large population of kind, generous folks who simply want to support the artists whose work brings them joy – even if they’re not receiving anything tangible in return.
If the idea of selling your existing art without giving up the license sounds too good to be true, that’s because it kinda is.
Here are four drawbacks to NFTs that you should consider before creating them:
They’re surprisingly expensive to make
As you saw above, creating NFTs won’t be free. In fact, you can lose money selling NFTs if your sale price doesn’t offset your listing costs.
Worse still, the costs associated with NFT generation don’t all come at once – rather they’re peppered throughout the process. Depending on which platform you use, nearly every step of NFT creation will involve some sort of fee:
- A transaction fee when you use USD to buy ETH.
- A service fee when you “mint” aka create and list your NFT.
- A “gas fee” to cover the maintenance costs of keeping your NFT on the blockchain.
- A second service fee when you accept a buyer offer.
- A conversion fee for converting WETH into ETH (optional).
- Another transaction fee for selling your ETH for USD.
In total, you’ll pay around $50 to $70 to list an NFT for sale on OpenSea plus another 2.5% of the sale price plus another fee when you convert ETH into USD.
Many smaller artists, then, may not find NFT creation to be cost-effective.
They’re difficult to market
If you decide to drag your wallet through a sea of fees to get your NFT listed, your next challenge is to find buyers.
Until NFTs become more mainstream, there will be a somewhat limited pool of potential buyers who both:
- Understand NFTs.
- Value them enough to buy them.
So as an artist, part of your efforts to profit from NFT sales may involve educating your existing fans on what NFTs are and how to buy them.
NFTs convert art into greenhouse gases
There’s no getting around it – the blockchain is an environmental disaster. According to Charles Hoskinson, the very co-founder of Ethereum:
“The computers around the world running 24/7 to maintain the blockchain are consuming an unfathomable amount of energy.”
According to the Cambridge Bitcoin Electricity Consumption Index, blockchain tech is consuming over 110 Terawatt hours per year – more than entire countries like Chile and The Netherlands. And although the Ethereum creators say NFTs don’t contribute to the blockchain’s carbon footprint, that’s a bit of an evasion – since the multiple crypto transactions to buy and sell each NFT definitely do.
That’s why there’s a growing subculture of artists who find NFTs problematic, to say the least.
Someone may have already sold your art as NFTs
Aside from the upfront costs, difficulty marketing, and environmental impact, the final reason many artists harbor disdain for NFTs is that they empower fraudsters.
For example: a fraudster sold over $1m of fake Banksy NFTs before brazenly admitting to their scam. And one day, Derek Laufman of Marvel Comics woke up to discover that someone had been selling NFTs of his work for a profit.
Sadly, because these platforms require no proof of ownership before an NFT sale, it’s entirely possible that someone’s already sold your work as their own.
NFTs are a complex and radical phenomenon. On one hand, they give artists an entirely new way to monetize their creations – without even having to give up their copyright. But on the other hand, they’re risky – unsold listings can cost creators $50 a pop, there’s little fraud protection, and the blockchain’s swollen carbon footprint may be a turnoff for anyone who’s used Zero VOC paint.
But once you’ve considered the pros, cons, and risks involved, you may decide that converting your masterworks into NFTs is the right move. More power to you!