Some may have gotten the idea from a previous post that I’m anti-platform. That couldn’t be further from the truth, I think platforms play an important role in this ecosystem in the same way that galleries play an important role in the traditional art world. But actively playing that role is important, and platforms that do nothing except take a portion of an artists sales are as worthless as galleries that do the same. So I wanted to spend a little time detailing a bit more what I want to see from platforms, and where they can add value as opposed to just taking it.
First and foremost let me direct you to a detailed comparison chart a few friends and I made between the top 30 or so platforms that are live right now, that can be found at NFTART.LOL. At the bottom of that page are links to several more comparisons that other people have put together some of which include platforms I didn’t. I also didn’t include at least 20 platforms that haven’t launched yet, or another 30 or so that I was promised are “in the works.” My point is that there are a lot, A LOT, of platforms and people making platform plays. In most cases each one is a little different, in one or two cases people couldn’t tell me why their idea was any different. And in most of these cases the platform plans to take a % of the sale (often between 2% and 30%), so understanding what the platforms are and aren’t doing is important before you decide to cut them in to your sales.
Now, if there was only one or two platforms and they were doing something no one else could do that would be enough, but that’s clearly not the case. And as you see from dumplingpets.com and fake.sale there’s no need to even have a platform – those aren’t white labeled solutions, they are writing the contracts themselves which I’ll talk more about later – but lets talk about where the value add with platforms is.
Discoverability. If you are an artist putting things out into the world, chances are you want people to see them and if you don’t have an audience already then posting things on a platform can help. This is the default benefit across all the platforms right now, though obviously it’s better with some than others. OpenSea for example has a massive user base, but also a fairly dysfunctional search and classification system so the chances of someone who wasn’t already looking for your art stumbling across it on OpenSea is fairly slim. Other sites like MakersPlace and Foundation don’t have a search per se, but instead have many different ways they sort and classify both artists and artworks so a collector looking for something similar to what you are doing has a better chance of finding you. Again, this varies from site to site, so be sure to spend time on the site you plan to list on. It’s helpful to go to a site without a plan, and just click around and see what you find and where it leads you – if you end up seeing work you like, that’s a good sign. If you end up scrolling through lots of work that isn’t really you thing, that’s probably the experience others are having too.
Promotion. While discoverability is largely passive, this more likely requires the conscious involvement of someone at the platform. This would be anything the platform is actively doing to promote the art or artist. Obviously it would be unrealistic for any platform to do everything for everyone, so this is largely a tiered situation where more is going to be done for one person and less for someone else. Those “more” situations are probably happening thanks to a prior agreement or arrangement. On the low end this could be retweeting announcement posts to the platform’s main twitter account. It could be something like pushing the art up to a “featured” position on the website for some period of time, or including it in a weekly emails or announcements. On the higher end, some platforms are taking an even bigger step and cultivating relationships with collectors who they are then introducing to artists via group video calls or even 1 on 1 chats. This gets into the kind of thing that artists would often hope galleries would do for them, and it demonstrates a desire to actually help out the artist (because even if the artist sells something elsewhere, if the collector they have a relationship with is interested they will likely follow), where as platforms who intentionally try to stay in between artists and collectors are probably more looking out for themselves. It should go without saying that in the long run looking out for artists is a much better plan, it should – but there are no shortage of short sighted plays being attempted in this ballpark.
Advice. This gets overlooked a lot, even by platforms themselves who often try to shuffle artists off to discord servers or clubhouse rooms hoping for “the community” to manage it which isn’t bad but also isn’t great. As people who are dealing with this market every single day, the platforms have an incredible amount of information that can be useful for artists planning next steps. And while best practices and things to avoid can be universal, thinking of artists in a one size fits all manor is also a mistake. The platforms that have people who can spend time with individual artists talking about their work, their goals, and their future plans are incredibly valuable and I personally think this is an area were most should spent a little more money on bringing in a few more people to really help develop those relationships. And relating to the previous point, developing a trusted relationship with an artist is a much better approach to retention than playing gatekeeper with collectors.
Community.I hope I didn’t give the impression in that last point that community isn’t worthwhile – far from it! Especially for early career artists, finding a supportive community can be life changing. This is one of the things I’ve been most excited about in lurking around the NFT space over the last few months, the community support, generosity and encouragement is unparalleled. And the platforms that are working to help foster that get big ups. Compare OpenSea to Foundation for example – Foundation has recurring “happy hour” clubhouse rooms where anyone can come and just hang out, the staff is super responsive to emails and messages on social media, while OpenSea just directs everyone to their Discord server which is nearing 45k members, many of who are begging for help or asking questions and there’s rarely a useful reply from anyone at OpenSea, and the team is unresponsive to emails and social media inquiries. (Granted this is just my observation and experience – I have accounts on both sites and I think there are pros and cons to what each is doing, but on this community issue it’s very clearly something Foundation has prioritized and seems to be something OpenSea has ignored.) Big picture – if you care about people who are using your site and work to find ways to help them work together with each other, that’s a good direction to aim for.
Support. Since I mentioned it, this is big. If you as an artist have a problem with something on the site, is there a way for you to get it addressed? A problem could be a technical issue, it could a conflict with another user or a case of infringement. It could be a mixup with a payment or a question about how something is being promoted or future plans. If there is a contact available to you that is responsive that is very good, if there’s just some help docs or a “community forum” that’s not so good. If I have a problem on a site and I can’t get anyone to help me, I have to seriously ask myself what value they are offering me to justify the money I’m giving them from my sales.
And that’s the crux of it really – when we are talking about justifying a % of sales these things are important. These are a very clear value add and if done correctly can provide a lot of benefit to artists using those platforms. Conversely, for the platforms that are not prioritizing these things I would suggest they should reconsider their model and perhaps move to a flat monthly subscription fee or something. I’d rather pay $5 or $10 a month and get no services than give a % of every sale I make in exchange for no services. But that’s just me.
To circle back to the issue I brought up earlier, there is no need for platforms. They are not required. But depending on what you are trying to do, they can be very useful and working together with the right platform can be mutually beneficial. But knowing what the “right” platform for you is requires thinking about what you are trying to do, and identifying which issues are important to you and then finding the platform that aligns with those needs. I write posts like this with the genuine hope that it inspires platforms to be better, to reflect on what they are doing (or not doing) and take steps to improve the weak spots. And if not, at least it gives artists better questions to ask. Platforms being better is good for everyone, so I hope this helps push things in that direction.
I’ve said this publicly a few times recently but there is an absolute flood of platforms right now and I don’t expect all the ones we are seeing today to still be standing in a year. Maybe not even in 6 months. Take a look at this post my friend Jonathan Mann wrote just 3 years ago where he compares the 4 major NFT platforms at the time, only one of those still exists. I think we’re going to see some platforms absorb/buy others, some pivot away to a more niche area they can focus on with less competition, and some simply collapse. Which ones remains be seen, but anyone who has seen these cycles play out time and time again can see the direction this is going. It’s going to be a fun ride, grab the popcorn and buckle up.
When I started visiting Japan I made it a habit of keeping track of the yen to dollar and was always doing the math in my head every time I bought anything so that I knew how many dollars I was spending. That made sense because while I was “visiting” in yen, I “lived” in dollars. After I moved to Japan I quickly realized that stressing out that the ramen I paid $5 for last week costing $5.25 this week was pointless and I should instead just enjoy my 500 yen ramen and stop worrying how much it was costing me in dollars. I was getting paid in yen, and paying for things in yen. I needed to get comfortable with yen and stop pining for dollars.
6 months ago 1 Ethereum (Ξ) converted to about $400, today it’s over $2100. In that time I’ve seen artists price their works in Eth matched against the dollar conversion they think is reasonable, only to lower the Eth price weeks later when Eth went up in value. I kind of cringed when I saw it happen several times but I couldn’t put my finger on why exactly. I mean, I get it – if you think your work is worth $500 one week it stands to reason you would think it’s worth $500 the next week and the value of some cryptocurrency shouldn’t impact that. Right? Earlier today I was looking at the value of Eth and thought about some work that I minted last week and thought I should probably lower the asking price since Eth has going up significantly since I listed them. So I did. And then I felt sick. And I knew exactly why.
Back when I used to have an art gallery how artists should price their work was a constant topic of discussion. The rule of thumb is simple, you can always increase a price but you can never decrease it. The logic being, if collectors see you lower a price they will never think your work is worth the listed price, and will always think they can get a discount or if they just wait a little longer the price will come down further. Conversely, if you only raise prices an interested party will quickly realize that if they are leaning towards something they should jump now because if they wait it will cost them more.
I keep saying that NFTs are a new medium and artists and creators should think of them that way, and embrace it. And the native currency of this medium is Eth. Sure some marketplaces take credit cards or other cryptocurrency but the dominant payment is Eth. And adjusting the Eth price to keep it matched to the dollar price still looks and feels like lowering the price. Because it is. We might have been “visiting” Eth before while “living” in dollars, but it doesn’t take more than a few weeks to start feeling like a local, and if you now “live” in Eth, then you should stop pining for dollars. An artwork valued at Ξ1 should remain valued at Ξ1 no matter what value Eth has to dollars. That’s a bold position and I get that, but in a way this is walking the walk. NFTs are crypto native, and if we’ve moved from tourist to resident, then we should embrace all that comes with that. That’s going to be a hard sell for many people, and realistically I know we’re not there yet. But we should see it on the horizon, and know what direction we’re heading.
On a personal level I’ve always been terrible at taking my own advice and can be firm with others but often second guess myself. In part because I can be sure of other people’s talents but I struggle recognizing my own. Call it imposter syndrome or insecurity or whatever but I know I’m not alone in that and many artists wrestle with what value to put on their own work. That said, I feel like I fucked up adjusting my pricing to compensate for Eth appreciating. I feel like I devalued my work. It’s not something I’m going to do again.
This is an incomplete list of things which keep coming up in discussions about what NFTs do, don’t do, and pain points. I’m posting them here largely just as a reference so I can send people here rather than repeating myself repeatedly, as well as in hopes that some time in the future when they are all addressed and resolved we can look back and remember the good old days. Warning, the following is nerdy as shit.
Persistent Royalties – I’ve discussed artist royalties in secondary sales in previous essays because this is single thing is incredibly important and game changing, but right now this happens at the platform layer not within the token itself. There’s already an Ethereum Improvement Proposal (EIP) that begins to address this, EIP-2981. That said, it’s almost like a bate and switch right now that artists are being told they get a cut of secondary sales and then only later finding out if whoever buys their are moves it to a different platform then they lose that recurring royalty which sucks. This needs to be built in so that no mater where the token is moved to or sold, the creator royalty is respected.
Unlimited Wallet Splits – Depending on the platform there’s 1, 2, or maybe 3 people who can potentially receive a % of the sale and on many platforms that split is predetermined. If it’s just one artist selling something they worked on themselves and they want to keep all the proceeds to themselves that’s fine, but if there’s any kind of collaboration going on, or a charity that the artist wants to give a donation from the sales to, or if it’s a band with several people, then this becomes really problematic. The beauty of these trustless systems is that you set it and then forget it and everyone involved knows it works, but if the trustless system relies on everyone involved trusting one person to divide up the money later on, then the system fails. Essentially every platform I’ve been talking to is already thinking about this so I suspect that solutions will start popping up soon but those will likely be at the platform layer which has the same problems I just mentioned relating to persistent royalties so it would be much better for this to be addressed within the contract. What I’d like to see is basically the exact way that Distrokid handles royalties for streaming: For each individual token (that is, not applied to an entire “collection” or “batch” but each NFT managed on its own.) the ability to add as many wallets and specify the % of the initial sale that each should receive. Ideally this would allow you to mint an NFT and designate 5 different wallets to each receive 20% of the sale, and then mint another NFT where one wallet gets 50% and two other wallets get 25% each.
Sunset Clause for Royalties – Related to the issue above, it would be ideal to be able to specify terms or expiration dates for the royalties – for example, say this wallet should get 10% of secondary sales for the first year, but after that the royalty should revert to the creator. Or the ability to include some kind of dead man switch so that if the person or organization receiving the royalty dies or goes out of business or something, then the original creator could specify a new recipient or just have that royalty revert back to them. This is one of those things that seems pointless and excessive today, but 10, 20, 50 years from now everyone is going to be kicking themselves that it wasn’t built in from day one.
Merging Wallets – I understand this is more of a Web3 issue than an NFT issue but it’s related and it’s another problem that needs to be solved fast before it gets insane. In theory tying your identity to a wallet is great for many reasons, but with different sites supporting different wallets and people not understanding how to import wallets from one thing to another, a lot of people are ending up with several, sometimes dozens of wallets. And if I’ve jumped through the hoops to get invited and verified as “seanbonner” on platform A and B, but I unknowingly used 2 different wallets for those accounts, then I end up with two unrelated accounts and half my listing & collection on one wallet and half on another, which is fine if I want to keep them separate but is a nightmare if I want them all together. This gets much worse if I’ve done something like, attached “seanbonner.eth” to one of them and “seanbonner.crypto” to another. We’re going to need some kind of smart protocol where I, as someone who has dozens of wallets, can say “all these wallets are mine, display the assets for all of them.” Again, there may be wallets and identities that I want to keep separate and that’s fine, but people need to be able to, at least in some visual way, display NFT collections that live in more than one wallet as part of their collections rather than be forced to send NFTs from one wallet to another which incurs gas fees and potentially breaks the contracts by moving the tokens off platforms. Update: It looks like TryShowtime is the first site to allow you to create an account and then connect several different wallets to it rather than use the wallet as the identifier, which is a great step here. With this one account you can see everything that I’ve created & collected across several wallets. (worth noting you can choose not to display certain items if you want)
Right now, in the world of NFTs, artists have all the power. All of it. This is a battlecry. And when I say “artist” I’m generally referring to any kind of creator. I’ve already seen painters, writers, dancers, musicians, photographers, etc. all do fantastic and delightful things with NFTs. This is wonderful because in most industries where these artists usually live they are forced to compromise, be subordinate or end up beholden to any number of entrenched middle men. That’s a hard truth, but one we all know to be real.
By and large the current NFT marketplaces desperately want to assume that role. They are embracing the archetype of the established curator king in hopes that artist will assume the role of subject. And many artists are happy to do that as it’s all they’ve ever known. But at this moment we have the opportunity to flip that table and build a new castle with better kitchen appliances installed from day one. Artists rightly get excited about the prospect of attention from the Gagosians and Saatchis of the world not because they arrived on the scene yesterday and put up a cool sign outside, but because they have decades and decades of history, and story, that an artist might hope to become part of. The blockchain is a decade old, NFTs have been around for a few years, the really old NFT marketplaces are only 2 years old, most have not been live for even a full year. Almost every artist minting NFTs has an art career which predates these sites launching.
To be clear, I’m not trying to universally knock the platforms or the people working with them. However here are certainly people who see all of this as just a short term play with a hugh upside which they are hoping to cash in on, like they did with the last thing, before they move onto the next thing. And there’s nothing wrong with that, more power to them, but as artists we all should be aware of what is happening and take care not to fall victim. Right now, in almost all cases, artists minting work on Platform X does more to benefit Platform X than it does the artists, which is important to consider when Platform X is asking for 20% of the sale price as their fee. (Currently the platforms I’ve assessed are taking between 0% and 30% so it’s quite a range) Artists can and should be asking what Platform X is doing to earn that cut. If the answer is “we let you in” that really is not good enough. By minting on Platform X we are giving our attention, marketing potential and money to that platform, so it’s worthwhile to ask questions ahead of time.
Conversely there are certainly people at platforms that are thinking about the artists first, and thinking of long term mutually beneficial partnerships. I’ve talked to several of them myself, but I’d be lying if I said those people weren’t in the minority. This is why I say that artists have all the power. We can vote with our dollars, vote with our time, vote with our attention. We can demand that things be different. There is absolutely a value in curation, but there is also a very well known problem with arbitrary middlemen. The promise of all this decentralized technology is that it puts power and agency back into the hands of the people rather than keeping it locked away in the vaults of the companies. It would be a shame to embrace this new world only to hand that power back over to a handful of randos who showed up yesterday. All Power To The Artists.
(As an aside, if you read this and take offense you should ask yourself why? You chose to see your reflection in the picture I’ve painted. If you don’t want to be accused of doing shitty things, don’t do shitty things. Don’t be one of the randos, think about what value you have to offer and realize you are lucky to have artists paying attention to you. Keep trying to do the right thing, and in a few weeks/months/years when all the dust settles maybe you’ll still be standing. Artists were here before this and will be here long after, we have support systems that we’ve built for ourselves. You are welcome to join us. I am an unapologetic artist advocate and equally happy to work with people who want to see artists prosper, or crush those who see artists as just another stepping stone.)
(for easy reference this post can be found at the domain: wtfnft.art )
Last week I wrote a quick intro to NFT’s entitled NFT WTF which, if you haven’t read yet you should go read now. Since then I’ve had a lot of conversations with a lot of people and have seen recurring questions and patterns emerge which have sharpened my thinking on a few things and I thought it would be useful to keep passing that info on.
“There are decades where nothing happens; and there are weeks where decades happen.”
Vladimir Ilyich Lenin
Earlier today when I was speaking with Nick Philip he astutely noted that this has been one Lenin’s weeks. There was a shift in the force and it’s been really fun to step back and watch the shock wave ripple across the landscape, though if I’m honest there hasn’t been a lot of time for that kind of quiet reflection because my phone has been blowing up all day long.
One thing I didn’t mention in my previous article is why you should trust me. The simple answer is that you shouldn’t. Not because I tell you to anyway. What you should do is look at my experience and decide for yourself if what I’ve done for the last 30 years gives you enough reason to hear me out. I don’t know how many other ex-art gallery owners have spent the last decade building an environmental nonprofit and studying the blockchain but I suspect it’s a very small number. Related, I’d love to meet them. While I believe my art+tech background usually gives me a somewhat unique vantage point, cryptoart is a rare combination of all the above.
My last article was more of an explainer/how-to kind of thing but with this I want to hit a few more specifics.
Gas Fees This is probably one of the most confusing aspects of buying & selling NFT art, largely because the platforms aren’t exceptionally transparent about it. First of all, what is gas? Think if email and how much spam you get? Spammers keep spamming because if they send 10 million emails and 100 people fall for it, they make a profit. Now imagine if you had to pay $1 to send every email – you’d probably send fewer emails, but so would the spammers. That “send as much as you can” business model would disappear – and that’s what happening here to some extent. To prevent people spamming up the blockchain there’s a cost involved with every transaction. Technically, this cost is associated with the miners who are confirming the transaction. But this isn’t a fixed fee, when the network is very busy gas fees are higher – the exact same transaction might incur the equivalent of $30 in gas fees one day or $80 another. This is because you are effectively paying to push your transaction to the front of the line. Some platforms allow you to pay less gas and stay at the end of the line, but that means your transaction could be pending for weeks so it’s not really advisable to try and cut corners there. Here’s a dashboard where you can see what current gas prices are on different networks and platforms, and here’s one that looks at trends and helps predict when gas prices might be lower or higher so you can plan ahead and mint things on the down cycle.
Additionally, the fees are handled slightly differently by each platform so it’s worth it to spend some time looking into whatever platform you are using to see how fees are handled. Some examples of differing policies: Makersplace will pay gas fees for you unless gas is very high, then they will give you the option of paying it or waiting and trying to list your item some other time. Most platforms charge gas to the creator on minting and listing, but OpenSea defers that to the buyer of a successful fixed price listing, however for auctions that end with a price less than 1ETH then the seller has to cover the gas. Policies differ, so do your homework here.
Secondary Sales I talked about how absolutely important this is in my last article but I need to clarify an important detail. This royalty paid from secondary sales is platform specific, it’s not baked into the token itself. What this means is that if you mint something on Makersplace and sell it and whoever buys it from you sells it on Makerspace then you get the royalty as expected, however if they transfer it to OpenSea (or somewhere else) and then sell it there that royalty is no longer in effect, and I believe (though I could be wrong here) that on that new sale a new royalty is set up so long as future sales take place on OpenSea. I do think this is a problem, but I don’t think lock in is the solution. Hopefully this is something that continues to evolve in the favor of the artists. That said, very few people are moving NFTs from one platform to another right now and many don’t allow you to bring them in, even if they do allow you to transfer them out. So we’ll see how this goes.
Another super important question to be asking here is what happens to these NFTs in the future if the platform doesn’t survive? One one hand these platforms are all counting on surviving forever, on the other hand this is the internet and we all know that companies (and platforms) come and go like the tides. What happens if Google buys one of these platforms? What happens if one of these platforms absorbs one of the others? What happens if in 5 years after Google buys one they decide to shut it down because it’s conflicting with their other NFT site or just isn’t profitable? There’s no clear answers to these questions, and with real money changing hands it’s something we’ll need to get answers to soon.
Hidden /Unlockable Content This is another platform specific function (meaning it’s implemented differently from one platform to another) but generally the point here is that people can see something before buying the NFT, but gain access to further materials only after buying it. This is commonly being used by bands, where you can see the album cover and the songs are the unlockable content, but I’ve also seen people do lottery things with 10 NFTs, one of which has a ton of extra stuff included, or where the unlockable content is a download code to get something else. I saw one artist list 10 plain white squares, and you only got to see which art piece you’d bought after buying it. There are a lot of fun things that can be done here.
Physical / Digital This is something that a lot of people seem to be asking about. Does an NFT need to have a physical counterpart? No. Can you make an NFT of a physical piece of art? Yes. Does that mean the NFT and the physical piece are connected or joined somehow? No. If someone buys the NFT do they automatically own the physical piece too? Not unless that was part of the offering. It’s easiest to think of the NFT as it’s own thing entirely. So an NFT can be the only representation of a piece of art, or it can be just the digital representation.
Environmental Concerns I received a hilarious amount of criticism about my last post for “glossing over how bad NFTs are for the environment” with the recommendation that “do some research” with links to various hot takes on Medium. Get it? Hot takes? “HOT” takes? Honestly I crack myself up sometimes. Anyway, as noted earlier in this piece (and in my bio) I’ve spent the last decade running an environmental non-profit in which we’ve done a lot of work with Blockchain, so yeah, I’ve done research and I didn’t “gloss over it” I simply didn’t mention it because it doesn’t exist. Creating NFTs doesn’t use any more energy than not creating NFTs, just like sitting on your front yard reading a book doesn’t use any more sunlight than not reading a book. The sunlight is there if you read the book or not, and the Ethereum blockchain uses the same amount of power if NFTs are being made or not. Now, you could argue that “cryptocurrency uses a lot of energy” and you’d be right, but NFTs don’t add anything to that and you could make an even more accurate statement by simply saying “currency uses a lot of energy” because our existing banking/currency systems use a shit ton more energy than cryptocurrency does. That’s not whataboutism, it’s realistically looking at the situation – and it’s part of the reason that there are already steps being taken to improve the energy usage of cryptocurrency. Anyway, point is there is a lot of well intentioned but misplaced criticism being thrown around by people who simply misunderstand how the blockchain works and are pulling various scary numbers out of context to justify prior bias. Also, angry rants catch on and spread much faster than boring truths. We’ve seen this time and time again at Safecast over the last 10 years. Jacqueline Choe has written the most comprehensive debunking of the environmental criticisms I’ve seen yet. If you still think artists minting NFTs are destroying the world it’s an absolute must read.
The Man I continue to be skeptical but cautiously optimistic about the various NFT marketplace platforms. I’ll have more research to publish soon, and more opinions to throw around. I’m disappointed how most of them are handing the surge in traffic they are seeing and that they claim they weren’t prepared for, when that’s literally the thing most of them raised money promising. I also think it would be a shame to move from one middleman ruled centrally controlled system (galleries, art fairs, traditional art world stuff) to a decentralized utopia (ok maybe it’s not quite that) which promises no need for centralized middlemen, only to attach our collective hitches to some centralized middlemen. I think open standards, transparency, and artist driven initiatives will be the best course of action however those aren’t always the most profitable for venture backed companies. So as a community, we’re going to have to push for the tools that work for us.
I’m going to wrap it up on that note, but I assume this semi-series will continue. I’ve been hosting a few “office hours” things on zoom explaining NFT’s to artists and artist advocates and recently started doing some on Clubhouse as well. If you want to keep up with this discussion follow me on twitter and clubhouse.
Again, if you’ve found this useful and want to say thanks and see how this works, NFT’s I’ve minted are available for sale here.This is part of an ongoing series of posts about art & NFTs.
(for easy reference this post can be found at the domain: nftwtf.art If you want just the spreadsheet platform comparison go to nftart.lol If you want to see newer posts I’ve written on the subject, start here)
If you’ve been anywhere on the internet in the last few weeks or months you’ve probably been hearing about NFTs. Like scores of others, you’ve probably been wondering just what an NFT is and if you should bother caring about them or not. Valid questions. I’d argue that you should, especially if you are involved in any kind of arts or creative work.
The Basics: NFT means Non-Fungible Token. Fungibility essentially means interchangeability and in economics that means that all dollars are basically the same. If I take $10 to my bank and deposit it, and then wire transfer it to you and you go to your bank and withdraw $10 you technically have a different $10 in your hand, but because “a dollar” is fungible that doesn’t matter, because $10 is $10. The “value” changed hands, even if the actual physical representation of it didn’t. Now lets say I drew a little sketch of my cat and wanted to give it to you but you live on the other side of the world. I can’t just give that sketch to someone who then tells someone else near you to draw a sketch of a cat and say it’s the same thing, because the sketch is non fungible. You need the actual sketch I drew for it to have value (financial or emotional). Now, if you think of digital items then they are basically all fungible. If I send you an email with a photo attached, you aren’t reading the exact thing I wrote or seeing the exact photo I sent, you are reading a copy of it. But what even is original in terms of digital? That’s where NFTs come in, using the blockchain (which is the technology behind things like Bitcoin) this is a way to ensure that a digital file is the original and not a copy.
One of the hesitations towards and criticisms of digital art has always been that it has no rarity, as anyone can make a copy of it as many times as they want and it’s no different than the original. The same argument is used to denigrate photography and video art, though usually there’s some physical element (a signed and numbered print for example) that specifies the uniqueness. That isn’t typically a concern with a painting or sculpture which is obviously one of a kind. Of course there are forgeries, but they take a lot of effort and experts can usually spot them quite easily. An NFT is a cryptographical way to create that rarity and uniqueness in a digital item and prove that something isn’t a copy.
An artist can “tokenize” a piece of work and then sell it, and the buyer can prove that what they just bought is the original thing sold by the artist. And because the blockchain is public, every time that artwork changes hands it’s recorded in a public ledger and at any point someone can verify the piece is legitimate and trace the chain of custody all the way back to the artist who originally released it. (Or the impersonator, as the case may be) Like an old library check out card, the blockchain records who owned it for how long, and if it was given to them or if they bought it, and if they did how much they paid. Which is a fascinating way to track value fluctuation (hopefully appreciation) over time. In this example of the library book, the stamped library card is the NFT – it’s something that accompanies digital file (often an image or a piece of media) to verify the provenance of that file.
I think this is one of the biggest and most important details – whoever originally creates the NFT is hard coded into the ledger and can specify a royalty that they should receive anytime the work is sold in the future. Traditionally secondary market sales happen like this: Andy makes a painting and asks Larry to sell it for him. Larry has a gallery and sells Andy’s painting to Kirk. Andy typically gets 50% of that sale. So if Kirk bought it for $1000, Andy just made $500. Larry did too, but that’s a different story. Anyway, say 10 years later Andy has become a much more popular artist and Kirk decides to sell that painting and asks Christie to sell it for him, Christie will take a 20% fee for doing that and 80% will go to Kirk. Andy gets nothing. So if Christie sells that painting for $1M, Kirk makes $799,500, Christie makes $200,000, but Andy gets nothing. He’s still only got that original $500 from Larry. However if that painting was an NFT, and Andy is the one who made it Andy could specify that anytime that work is ever sold in the future, he gets a % of that sale. (Make sure to read part 2 for important clarification of this point)
Artists! This is important. If a gallery or curator or someone has approached you about making NFTs of your work and hasn’t told you about this, chances are they are putting themselves in that royalty seat so they, not you, get paid off every sale.
Think of an NFT like your domain name or your email address. Some of you might know first hand the problems that can come from letting a business partner own or manage your domain or email. Or your bank account. This has the potential to be a million times worse, and it’s one of those problems that you won’t realize is a problem until it’s too late. Take steps to avoid it now by making and publishing your own NFTs. It’s really not that hard, and the effort is worth it.
One final thing: Like iPhones vs Androids, there are two common standards at play here though in this case they were both made by the same people. ERC-721 and ERC-1155. ERC-721 is the older standard used by everyone and is for absolutely positively one of a kind items. ERC-1155 is a newer standard (and thus still gaining adoption) and is more flexible as it allows you to make one of a kind items, or an edition (only 25 ever made). If you want to understand more on that, read this.
With that out of the way, let’s move on.
So how do you make (or “mint” as it’s called) an NFT? Actually how you mint, list, and sell an NFT are closely related. For the purpose of this I’m going to be talking about minting and selling on OpenSea which is the currently the largest marketplace for such things, and is the service I used to easily mint my first NFTs.
There are several sites that will help you make NFTs and also several sites where you can sell NFTs. As long as they are using ERC-721 or ERC-1155 standards the NFTs you create in one place can be transferred or sold in another place. But in the same way you can’t take one painting and sell it to 5 different art galleries at the same time, one of a kind items can only be sold on one marketplace at a time.
Some friends andI created a comprehensive spreadsheet comparing the top 30 platforms. Each site has different policies, practices, and fees. Some have strict curation and you have to apply and prove yourself worthy to sell things there, some require buyers use their own in house cryptocurrency rather than something more widely exchangeable and some have pretty high fees for that convenience so caveat emptor. Again, to keep things simple I’m only talking about OpenSea.
OpenSea also offers “free NFT minting” which is a little misleading in that you still have to pay to initiate your account (technical limitation that you have to pay anywhere) but while other sites will charge you a “gas” fee every time you mint a new NFT, OpenSea won’t. (Gas is an important thing to understand, I spend more time talking about it in part 2 )
You will also need a wallet to accept all the crypto you will be making from your sales. You might ask why you can’t just use paypal or something? Because paypal deals in FIAT currency not cryptocurrency which is central to this entire thing. On OpenSea most sales are done using Ethereum (which is the second most popular cryptocurrency next to Bitcoin) though you can choose to accept a different type of cryptocurrency if you want. Think of OpenSea like ebay, they handle the transaction but they don’t hold money for you because they aren’t a bank. And neither is OpenSea, which is why you need a wallet. Most people use MetaMask which is simple browser extension, others prefer Coinbase Wallet or Rainbow which is an app you install on your phone. There are other options which you’ll be prompted to choose from when you first go to OpenSea, but you need one to go any further. Any money you make on the site from sales will go directly to that wallet, and if you choose that wallet when you decide where future royalties are sent then will go there too. But keep in mind that isn’t something you can change later, so make sure to write down all your wallet recovery details. If you lose your wallet, you lose your wallet. Literally.
Once you’ve connected your wallet your account on OpenSea exists. Keep in mind the two are linked, so if you go to OpenSea and use a different wallet, you’ll end up with a new (different) account. The little circle icon in the upper left corer is your avatar, and that dropdown will allow you to set all the basic profile stuff you would set on any site. Next to it is CREATE and you guessed it, this is where you go to create NFTs. Choose “My Collections” on that dropdown and on the next page you’ll be given an option to create a new collection which you have to do first as your NFTs will be part of the collection. You’ll get a popup asking for a name, description and logo.
One thing I didn’t realize, the collection is independent from the user. I guess because you can invite other people to help you manage collections. But point being, the URL will be based on the collection, not the user. For example when I created a collection called “D5Kglitches” I assumed that would be nested under the user “seanbonner” but it’s not, and creating that collection resulted in a URL that looks like this:
And as you can see on this page showing one of the NFTs in the collection, the attribution is to D5Kglitches, not Sean Bonner. In this context that’s not a big deal, but it’s worth noting. I plan to make NFTs of some of my photography and I’ll be making a new collection properly named when I do. (Update: I did.)
Once you’ve made a collection you can click into it and “Add New Item” which is the option you’ll use to mint an NFT. Before that you should click the “edit” button though and you’ll have a chance fill in more information including any links or credits you want to add, as well as that royalty thing I mentioned earlier. All NFTs in this collection will conform to this, so decide what % of future sales you want and put in your wallet address.
Once you’ve saved that, go back and hit that “Add New Item” button. This is where you choose the digital file you want to tokenize. Files can be a JPG, PNG, GIF, SVG, MP4, WEBM, MP3, WAV, OGG, GLB, or GLTF. Max size is: 100 MB. Add a name, a link to any external information about it (like your website) and a description. You can also add “lockable content” which is basically things that are hidden until it’s bought. I’ve seen people sell a collection of 10 blank white squares, with the actual image being locked content, so people didn’t know what they were buying until after they bought it. I’ve also see people sell a visual object and provide audio as the locked. Of course there’s no requirement to do this, it’s just an option if you want it.
Next is “Supply” and at the moment this is greyed out and limited to 1. However, if you paste “?enable_supply=true” into the URL and reload the page you’ll be able to edit that. BUT, you’ll lose anything you already added on the page, so don’t do that yet. Just go ahead with 1 copy and remember that for next time.
The next step is “create” which is where you’ll need to initiate your account with a transaction if you haven’t already, and then you can set the price/type of sale. Options are for a fixed price, auction, or declining price. Most people will want to just start off with a fixed price. If you have a following who is waiting on baited breath for your NFTs to drop then you could choose auction and see how much they are willing to pay. Declining price took me a minute to understand but this is a tactic to use FOMO as a marketing tool. You set a high price and a time period, and over that time the price gradually decreases until someone buys it or the deadline is hit – the idea being people will watch it and buy it before it gets too cheap and someone else gets it before them. I don’t know how this works in practice, but in theory maybe someone who only wanted to pay $100 might buy it at $120 because they are scared someone else will buy it at $105? Sort of a reverse auction or something.
Click sell, and you are rolling. You can tell people about your NFTs and people can buy them if you send them the link. They won’t be able to find them on their own though because there is one final step where someone at OpenSea has to manually “verify” that the collection is real and works and legal, once they do that then you are in search results on the site too. They say if you sell things you get noticed, but also just tweeting to them and asking for verification seems to work really well too.
If you have any questions let me know and I’ll see if I can help.
In the past decade I’ve spent many years living in Tokyo and Los Angeles, and have recently relocated to Vancouver. I’ve run hackerspaces and blog networks, an art gallery, a design firm and a record label. I’m one of the co-founders of the environmental non-profit Safecast, a Shuttleworth Fellow and have been an Associate Professor at Keio University. I take photos and make noisy ambient music under the name Delay 5000 (D5K).