NFT (non-fungible tokens), cryptoart and cryptocurrency are taking the world by storm, and if you’re unsure what any of these terms refer to, now is the time to learn.
Those looking to make money on digital assets should be paying attention to what’s happening in the NFT world, especially with so many celebrities and investors capitalising on the profitability of the NFT and crypto market. NFT buying and selling is said to be the future of digital profitability – perhaps now is the time to invest, or at least learn more about it!
As an NFT digital artist or owner, or even just as someone who has an interest in learning more about crypto art or NFT art, you may want to learn more about selling a digital asset for a profit.
This overview covers what NFT art is, what blockchain is, where you can sell NFT art, how to sell NFTs, how royalties work, and the top reasons why NFT art owners choose to sell NFT art.
What is an NFT (non-fungible token)?
First things first, what exactly is an NFT? NFT stands for non-fungible token.
Non-fungible means that something is unique and non-replaceable. Therefore one NFT is not equal to another NFT.
To simplify the concept further, one can think of currency in general. For instance, one dollar is equal to one dollar, and one pound is equal to one pound. Much the same, one ETH is equal to one ETH (in the case of cryptocurrency). This means that these currencies are fungible because they can be replaced or exchanged for one another.
Now, because NFTs are non-fungible, it means that no two NFTs are equal in value. Therefore, one NFT cannot be equal to or exchanged for one NFT. The uniqueness that this affords NFTs makes them highly valued.
NFTs have four main characteristics to be aware of. These include the following:
- NFTs are highly unique, making them quite sought-after. Each NFT artwork comes with a unique ID and has a unique value attached.
- NFTs are indivisible. When you purchase an NFT, you become the owner of the digital asset. NFTs only allow for one owner. Some NFTs are allowing for fractional ownership, but this is rare.
- All ll NFTs are transferable. Non-fungible tokens are hosted on a blockchain, a public ledger detailing each NFT transaction. Creators of NFTs have the privilege of transferring the NFT to any account. Owners, when buying NFTs get ownership rights of an NFT stored on a blockchain.
- All NFTs are rare. NFTs have distinct traits, and creators only create a certain limit, ensuring scarcity. Each NFT has a distinct identifier linked to one owner. Of course, scarcity depends on the NFT creator’s perception.
When you buy an NFT, you are buying an NFT trading card, which is a digital file verifying the ownership and authenticity of a digital asset. Digital artists use NFTs to sell crypto art. Crypto art is usually bought using Ethereum blockchain or Bitcoin.
Most people think of NFTs and crypto art being memes, GIFS, music, video files, but NFTs can be more than that.
Some examples of an NFT include:
- Digital collectables
- Tickets to events and organisations
- Domain names
- Fashion (usually limited run lines)
- In-game items
- Digital Icons
- Charity Donations
What does “blockchain” mean?
Blockchain plays a major role in NFTs and cryptocurrency. It is essentially the driving force behind the transparency and security of crypto transactions and ensures greater trust throughout the crypto art selling process.
When investing in NFT art or crypto art, you may be worried about security and for good reasons. Unfortunately, there are many scams and fraudulent activities in the online financial sector, and this is where blockchain comes in handy in crypto art and NFTs.
Blockchain history dates back to the early 1990s, the first concept developed by Stuart Haber and W. Scott Stornetta. They created a system consisting of a cryptographically secured chain of blocks that could store documents with timestamps that could not be tampered with.
The system was upgraded in 1992, allowing the inclusion of more documents on a single block. In 2008 however, blockchain boomed, thanks to the development of Bitcoin (the first digital ledger technology application) by an entity named Satoshi Nakamoto.
Blockchain technology makes it nearly impossible to hack the system or fraudulently recreate any of its data. In short, blockchain is a highly accurate record-keeping technology. Blockchain acts as a distributed ledger. This digital system will record transactions and data in many places simultaneously. There are many powerful computers in a blockchain network. Each of these computers keeps a copy of the ledger. All copies of data are regularly updated and verified.
Then to get more technical, blockchain is a type of database. It’s important to note that regular databases in files, tables, columns and rows. Blockchain, however, stores data in blocks that are chained together digitally, thus the name. Traditional databases are managed by a central computer, whereas blockchain is decentralised and therefore is managed by a peer-to-peer network of computers.
Blockchain stores information in digital format electronically. The transparency that it offers generates trust and security. It works by allowing accurate recording of information and distribution, therefore but disallows editing of this information. In this way, it thwarts fraud and scams as transaction records cannot be deleted, altered or destroyed.
This is a typical transaction process on a blockchain, step by step:
- A new transaction is entered into the blockchain. Transaction fees are cryptocurrency fees charged to users when performing a crypto transaction. This covers the costs of using the blockchain.
- Transaction records are sent to a network of computers located across the world.
- The validity of the transaction is confirmed by the network of computers solving complex equations.
- The transaction data is clustered in blocks once the legitimacy of the transaction is confirmed.
- A permanent record is created by chaining the blocks of information together (this creates a long history of all transactions)
- The transaction is finalised, and records cannot be deleted, altered or destroyed.
Bitcoin was the first cryptocurrency to use blockchain, but many other cryptocurrencies now use it. It is not just cryptocurrency or NFT art that use this blockchain technology. Blockchain technology is used in the following industries and scenarios too.
- Logistics companies – tracking supply chain movements and delivery of goods.
- Legal community – as a basis for smart contracts and for transferring and protecting intellectual rights.
- Traditional banks – governments are testing blockchain technology for managing digital currency exchanges.
Where can I sell my NFTs?
If you own NFT art or are a creator, you can sell your NFTs on a dedicated NFT marketplace. Some of the industry’s largest NFT platforms are listed below.
OpenSea is a New York-based non-fungible token marketplace established in 2017. It was the first and is the largest marketplace for NFTs. With 80 million+ NFTs and two million+ collections to choose from, the NFT platform has something for everyone. However, to use OpenSea to sell NFT art, you need an Ethereum wallet.
This NFT market platform supports the following cryptocurrency wallets: MetaMask, CoinBase Wallet, WalletConnect, Fortmatic, Kaikas, Bitski, Venly, Dapper, Toris and Portis. The platform also supports mobile-only crypto wallets, which are Trust and OperaTouch. You can sell various types of NFTs on the OpenSea platform, including art, collectables, music, photography, domain names and trading cards. The platform offers a great NFT selling tutorial to help you get started. OpenSea provides creators with 10% royalties.
Rarible is an NFT platform that was founded in 2019 by Alex Salnikov. Rarible is known as the best platform for creators with a focus on royalty earnings. Rarible offers three blockchain options, including Tezos, Ethereum and Flow. The platform offers creators 50% in royalties. The interface is simple to use, and the ‘minting process’ is quick and easy. There is a 2.5% transaction fee on ‘minting’.
This NFT art platform supports the following crypto wallets, including MetaMask, CoinBase, Fortmatic, Portis and Rainbow. You can sell a wide range of NFTs on Rarible, including art, games, Metaverses, photography, music, domains, DeFi, memes, punks and NSFW.
SuperRare is a unique NFT marketplace launched in 2018. Since its launch, it has managed 90 million dollars in sales. This NFT platform focuses specifically on the sale or trade of single edition or unique digital artworks. According to SuperRares’ own website trading, a SuperRare NFT is a highly lucrative endeavour as the resale value of an NFT sold on the platform typically amounts to over 5,000% profit.
SuperRare has hosted the sale of some of the world’s most expensive NFTs, including ‘Deathdip’ (value $3,500,00), ‘Some Asshole’ (value $4,626,000) and ‘All-Time High In The City’ (value over $3,500,00). All of these NFTs are from XCOPY and are devilish animated characters. SuperRare supports cryptocurrency wallets, including MetaMask, Fortmatic and Wallet Connet. On a primary sale (first sale from artist to investor), the artist gets 85%. Secondary sales (any sale from collector to a new owner) the collector gets 90%, and the original artist gets 10%. A 3% network fee is added, but this is to the buyer’s account.
- Nifty Gateway
Nifty Gateway is the digital art auction platform that forms part of Gemini. The platform sells popular NFT artworks by well-known artists such as Pac, Beeple and Refik Anadol. In addition, this NFT platform provides access to various art and collectable NFT artworks made available as ‘Curated Drops’, which are hand-selected artworks by Nifty Gateway.
What’s unique about Nifty Gateway is that it is a custodial platform. Being a custodial platform means that NFTs are stored utilising Gemini’s state of the art custody technology (in a secure wallet). One of the perks of this wallet (and platform) is that if you forget your password or lose your data, the platform will happily help you retrieve them.
When you sell an NFT or multiple NFTs on Nifty Gateway, the platform takes 5% of the sale price plus 30 cents. A further 10% goes to the original artist to cover secondary sale costs. Popular NFTs sold on Nifty Gateway include music, sports murals, digital art and collectables. Nifty Gateway is a fully-featured wallet in its own right. The only other external wallet that they support is MetaMask.
- Bored Ape Yacht Club
Bored Ape Yacht Club, or Bored Ape (as people often refer to it), is a marketplace offering a collection of 10 thousand unique digital collectables. Owning a Bored Ape NFT will give you access to the exclusive social club. The club’s founders are listed as Emperor Tomato Ketchup, No Sass, Gordon Goner and Gargamel.
Seven traits make up a Bored Ape NFT; these include the background colour, clothing, earrings, mouth, eyes, fur and hat. In less than a year, the Bored Ape mint price rose from 0.08 ETH (April 2021) to 99 ETH (Feb 2022). This price point places some of the cheapest Bored Ape NFTs at over $300,000. Some famous Bored Ape Yacht Club NFT token owners include Jimmy Fallon, Eminem and Justin Bieber. Bored Ape NFTs can be bought and sold on Rarible and OpenSea.
Beeple is the name or term given to an American graphic designer, animator and digital artist called Michael Joseph Winkelmann. Michale Winkelmann is well known for his ability to convey social and political points using pop culture figures. Beeple has worked on concert visuals for celebrity entertainers including Katie Perry, One Direction, Justine Bieber and Nicki Minaj.
While you can’t sell your own artwork on Beeple, you can resell Beeple NFTs that you have bought in the past. Christie’s has hosted several Beeple auctions. Along with other leading platforms such as Nifty Gateway, OpenSea and Makersplace. The supported crypto wallets and the fees incurred will depend on which NFT platform you choose to resell your Beeple NFT.
How to sell NFTs
Selling NFT art for the first time may seem overwhelming, but it’s actually not. With the correct NFT marketplace quality digital artwork and a crypto wallet of your own, you can start selling NFT art today. For the sake of illustration, we have included an NFT marketplace step-by-step guide using OpenSea and MetaMask Wallet below to help you get started. You can, of course, use other platforms such as CoinBase and other digital wallet options too.
- Visit the MetaMask website and download the application for your browser. Once the MetaMask extension appears in your browser, click on ‘Get Started.” You can import an existing wallet using your unique seed phrase or create a new one at this stage. Select create a wallet and follow the prompts. You will be provided with a 12-word seed phrase for your unique wallet. Make sure you save this seed phrase as if you lose it, you will lose access to your wallet forever.
- Visit the OpenSea website. On the top right-hand side of your screen, click on the profile icon. A screen will appear advising you that you need an Ethereum wallet to use OpenSea. You can select your existing crypto wallet from the list of options and follow the prompts to link your crypto wallet to your OpenSea account.
- Once you have set up your account, log into your account and click on ‘sell’ on the top right-hand side of the screen. This will open up a listing page. You can use this page to select the type of sale and the price. If you select a fixed price sale, the price will stay fixed for that particular NFT. You can also select the duration of the sale. The OpenSea service fee is usually 2.5%, and creator earnings are 10%. If you select a timed auction sale, there are two ways that you can sell your NFTs. One is to sell to the highest bidder, and the other is to sell with a declining price where the price keeps reducing until an investor purchases.
- You will need to sign a transaction to confirm your sale. If this is your first NFT sale on OpenSea, you must initialise your wallet first. Suppose you are a digital artist that ‘minted’ your digital files for a custom contract on another platform. In that case, further authorisation may be required to allow OpenSea to sell your digital art.
- On finalising your listing, OpenSea will present confirmation in the form of a pop-up window. This window is shareable on social media to increase sale potential.
Gas fees may apply when selling NFT art on OpenSea and other crypto art platforms. These fees are transaction fees, and often a portion is paid by the buyer and the seller. Gas fees are applied when ordering or cancelling NFTs and when cryptocurrency is transferred from a buyer to a seller’s wallet. Gas fees are also needed to ‘mint’ an NFT.
How do royalties work in NFTs?
For NFT artists, NFT royalties can be quite lucrative. Once an NFT artwork is created and sold on the marketplace, it can be resold numerous times and generate royalties for the creator. Royalty payments are executed by smart contracts automatically. Most NFT marketplaces offer a standard royalty of 5-10% of the sale price. NFT royalties are coded into a smart contract on the blockchain that is linked to the unique ID of the NFT artwork. Every time a secondary sale occurs, the coded smart contract ensures the terms of that particular NFTs royalties are automatically applied and paid out. No intermediary is required.
Of course, not all NFTs offer royalties; this needs to be specifically incorporated into the NFT’s original sale terms because once the smart contract terms are stored on the blockchain, they cannot be altered. However, NFT royalties are highly attractive to content creators and NFT artists because digital artwork sold today at a low value and sold at a ridiculously high value in the future ensures ongoing royalties in the future for life.
Not all NFT marketplaces are geared towards royalties, but if you opt for a marketplace like Rarible, you can enter ‘require royalties’ during the minting process. Smart contracts and blockchain technology work hand in hand to ensure the original creator is identified and royalties are paid over as the transaction occurs.
Why are people selling NFTs?
As a creator, investor or collector of digital art memes and video games, you may wonder why people are selling NFTs in the first place. This YouTube video by The Verge’s Russell Brandom explains the intricacies of NFT selling hype quite nicely.
Below we have pieced together several reasons why people are selling NFTs and crypto art is trending:
- NFTs offer transparency and a verifiable way to prove ownership. As an NFT owner, your physical or digital asset has a proven record of ownership that can not be altered, deleted or destroyed. With NFTs, you can tell the exact day and time the NFT was sold or purchased which was not the case in the past.
- Businesses and corporations are investing in NFTs every day, proving them to be a viable investment option. NFTs are undoubtedly changing the business landscape as big brands such as NIKE and VISA are directly large sums of money into NFT technology.
- NFTs provide digital artists and resellers with access to a broader market and allow them to eliminate the middleman, which usually incurs extra costs. When both artist (seller) and collector can save on costs, it’s a win-win situation.
- NFT royalties are alluring for creators and digital artists as they can set their required royalties and earn a percentage of the sale price on their artwork for the rest of their lives.
Many people learn about NFT opportunities on social or on channels hosted on Discord that are specifically dedicated to cryptocurrency and NFT news and advice.