They are unique tokens that are used to represent ownership over underlying digital (and sometimes even physical) assets.
NFT technology has evolved to the point where anybody can create, or “mint”, their own non-fungible tokens. This is naturally geared towards digital artists, who can make their works readily available on a number of NFT marketplaces.
Minting NFTs isn’t just limited to artwork though, as game designers, musicians, YouTubers and even meme creators can all get involved.
The creation process typically involves paying a variable gas fee with cryptocurrency.
It’s worth noting that when you mint an NFT, you’re not actually handing over ownership of the artwork’s file, but a representation of ownership. This distinction is important to understand before journeying into the world of NFT creation.
Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific
provider, service or offering. It is not a recommendation to trade.
Step 1. Choose a blockchain and type of NFT
NFTs can be hosted on various blockchains, and every blockchain offers different token standards. However, most blockchains follow standards set by Ethereum. The best-known NFT token standards are Ethereum’s ERC-721 and ERC-1151.
These token standards are designed specifically for minting NFTs. Unlike other comparable token standards, each issued ERC-721 token is non-fungible and unique. This means you cannot swap an ERC-721 token for another, the way you could with Bitcoin. This token is supported by most major NFT platforms, so we’ll use it as an example.
MetaMask is a browser extension and mobile application intended to grant users of Ethereum and other popular blockchains seamless integration with DeFi platforms. It is one of the more popular DeFi and NFT wallets, having an active user base of over 1 million.
Trust Wallet is a free mobile application that has in-built support for most major cryptocurrency tokens, including ERC-standard tokens, Bitcoin and more. The application allows users to directly engage with DeFi and NFT platforms on the Ethereum and Binance Smart Chain networks.
For those who wish to use a “cold” (offline) hardware wallet, the Ledger wallets are popular choices. Users can safely store their cryptocurrency offline, helping mitigate the risks of hacking and exploits that “hot” (online) wallets may encounter. Ledger users will need to download officially supported firmware for the wallet in order to store certain cryptocurrencies.
Trezor is another popular “cold” storage hardware wallet. In order to make transactions, Trezor creates temporary online wallets that must be confirmed by pushing buttons on the hardware. This creates an extra layer of security for your tokens.
Step 3. Choose a marketplace to create your NFT
You can compare NFT marketplaces in the table below.
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How to mint an ERC-721 NFT on the OpenSea platform
OpenSea is one marketplace which caters to beginners looking to mint NFTs, as it offers off-the-shelf tools and solutions that will take care of some of the hard work for you.
Founded in January 2018 by American developers Alex Atallah and Devin Finzer, OpenSea was once known as the eBay for CryptoKitties but has grown to become a general-purpose online marketplace for non-fungible assets.
If you haven’t already done so, go to OpenSea and create a profile.
Click where it says “My Collections”.
OpenSea uses these collections as a default organising system for user-created NFTs. It makes the platform simpler to navigate and stops things from getting confusing when you start to really take off. “My Collections” is where you’ll be able to find your NFTs going forward.
Click “Create a collection” to get started.
When prompted, type in what you want to call your collection, a brief description and upload an image.
If inspiration doesn’t strike, don’t worry – none of this is permanent at this stage and you can change it all later.
Note that you’re given a choice of blockchains to use – to create an ERC-721 NFT, you can use Ethereum.
Once your collection has been created, it’s now time to upload the files you’ll actually be using to create your NFT.Select “Add item” from the menu and choose the file you want to upload – the official maximum file size is 40MB, but bear in mind that if you go over 20MB, the process will slow down considerably both for you and anyone who wishes to buy your NFT.
An extensive range of file standards are supported: JPG, PNG, GIF, SCG, MP4, WEBM, MP3, WAV, OGG and GLTF.
Once your file has been uploaded, that’s it – you have created your first NFT!Your new NFT will have a unique address and its total supply embedded in its identifying data.
This means that you’re the only person who can mint more, even if you sell it to someone else. If you do mint more NFTs of the same file, each new buyer will be able to see what “number” version they have – kind of like a serial number.
It’s now time to get your collection looking slick for any potential buyers, so we recommend updating your banner image.
Click on the pencil icon in the top right of the window to upload a banner image – the ideal size is 1400 x 1400, and it’s a good idea to avoid text.
This will help set your collection apart from the crowd and give it a unique identity all of its own.
We strongly recommend you tag your collection with as many social links as possible to help spread the word about your project.If you click the “Edit” button, you are presented with a range of options.
First, choose a category to tag your collection to help people find it. Then, you can link to the various relevant social platforms, as you can see:
You can link to your own website, Twitter, Instagram, Telegram, Medium or Discord.
In the same “Edit” window, you can determine if you want royalties when another user sells your NFT. These come from the price another buyer pays for the asset and are paid monthly – the maximum is 10%.
You can also set which tokens other people can use to buy or sell your NFT.Readers with more technical experience may prefer to create their own bespoke ERC-20 token, but most users will be happy with the pre-set options of ETH, WETH, DAI and USDC.
Step 4. Sell your NFT
This is where the fun really begins – there are many NFT marketplaces online, but since it has been designed to be accessible for newcomers, we will stick with OpenSea for our example.
To sell an NFT on OpenSea, previously you had to create your own storefront and pay minting fees but with the recent explosion of interest in NFTs, they have now streamlined the process – although there is still a gas fee for first-time sellers.
Here’s how it works:
Click on the icon at the top right of the screen to land on your profile page. You’ll be able to access your NFTs that you have created, along with NFTs you have acquired from other people along the way.
Select the NFT you want to sell, and then click “Sell” on the top right of your screen.
Next, you’ll see a window with a number of options.
You can set the price for your NFT or determine what kind of auction you want to hold. The auction options are as follows:
“English” auctions, where the highest bid wins
“Dutch” auctions, where the price will fall until you have a buyer.
OpenSea automatically completes the transaction if the final price in the auction is above 1 ETH, but if the auction ends below 1 ETH, it is up to you as the seller to accept the highest offer.
Note that any bid made in the last 10 minutes of an auction will extend it by 10 more minutes, and you as the seller can cancel the auction at any point – although this will incur a gas fee. Additionally, you can choose to accept any given bid at any point in time that suits you.
Also, if this is your first time selling an NFT on OpenSea, there are 2 transactions you need to carry out that are for “free” but incur gas fees:
One transaction to activate your account
Another to allow OpenSea access to your NFT or NFTs whenever they are sold.
Every transaction on the Ethereum network incurs a gas fee, which is paying for the computational costs of executing a smart contract. This can be difficult to avoid, but as NFT marketplaces become more mainstream, more options for fee-less NFT creations are popping up. Two such platforms that offer zero gas fees are Mintable and Immutable X.
One very important thing to remember: OpenSea charges a commission of 2.5% on every sale you make through their platform.
What to consider when making an NFT
Minting an NFT can be an exciting process, whether you’re an artist looking to expand your revenue or you just want to immortalise a meme for your friends and family.
Check the platform fees. We’ve used OpenSea in this example as it is user-friendly, but there are many platforms available that have their own strengths and weaknesses. It’s a good idea to shop around and make sure any given service is the right one for what you want to do – make sure you especially look at fees charged on sales by the platforms, these can range as high as almost 10%.
Know the vetting processes. Are you trying to sell your art or do you want a laugh? Both are valid, but make sure that you’re using the right service for each one.
Consider platforms that use verified identities. This guards against plagiarism and fraud. NFTs are unique, but the creative work that goes into them doesn’t have to be, and creators can face uphill struggles preventing cynical or malicious actors from profiting off their work.
Volatility. In the spring of 2021, NFTs appeared to be a licence to print money, but as with any crypto market, extreme levels of volatility are frequent. Relying on selling NFTs as a path to fame, fortune and comfort to the neglect of anything else is not wise. As always, it’s about a cool-headed balance of risk and reward – although this applies more to NFT trading than specifically creating and selling them.
Frequently asked questions
Yes and no. They are tokens – but they are unique and cannot be divided or duplicated.
If you want to look at them through a crypto lens, each one is basically a cryptocurrency that only ever has one in existence.
It helps if you’re already a creator with some profile, but NFTs are like any other unique asset – the value lies in their exclusivity.
Also, in embedding royalties for artists into re-sales on the secondary market, they are a potential new revenue stream for creative industries that saw revenues decimated by the easy duplication of the early digital era. Many people want these industries to continue and are excited by the potential of leveraging blockchain technology to reward their favourite artists.
The nature of blockchain technology means that they are reliable as verifiers of authenticity. That said, it’s worth investigating sellers’ profiles to ensure they are trusted users, as scams have been performed in the past where users sell “stolen” digital artwork from other creators.
In general, NFTs are considered a part of the broader DeFi ecosystem. Although a lot of NFT exchanges themselves aren’t fully decentralised, many are putting roadmaps in place to hand over governance to the community.
Not really – you may remember the CryptoKitties phenomenon a few years ago when during the first wave of mainstream attention on blockchain, its enthusiasts traded virtual cats with one another. These were NFTs.
We can go even further back and trace their origins back to 2012, but the concept and its application have both undergone significant evolution since then.
Yes. NFTs cannot be divided, but “shares” in them can be created and sold just like stocks in mainstream financial markets.
Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly
volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of
future performance. Consider your own circumstances, and obtain your own advice, before relying on this information.
You should also verify the nature of any product or service (including its legal status and relevant regulatory
requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may
have holdings in the cryptocurrencies discussed.
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