Both of the images below have been minted as NFTs on the Ethereum Blockchain and they represent my digital artefact.
By clicking on the images you will be brought directly to the OpenSea marketplace…
where you can see them in the wild, and even buy them.
After doing the Pecha-Kucha I was intrigued about the process of creating an NFT (Non-Fungible Token). Doing the presentation was very thought-provoking and left me with a number of questions. I decided the best way to understand the process, and to identify areas where there were gaps in my theoretical knowledge, was by creating my own NFT. In particular I wanted to get a better understanding of how the process might be for digital artists by asking:
- What are the technical knowledge requirements ?
- What are the associated costs ?
- To what extent would the artist feel ‘ownership’ of the process ?
My primary considerations when designing the artefact were:
- The ability to make the NFT visible in the context of my website.
- The accepted upload formats of the NFT.
- The ability to manage the NFT, once minted.
As an NFT is an entity that only exists in the context of a blockchain, I had to find a way of ensuring that my NFT would be visible. There are a ~800 blockchains in existence (TechJury, 2021) and I selected one of the best known, Ethereum, which is a smart-contract platform that allows multiple projects to run on it. It has its own marketplace, but it wasn’t as user-friendly as the one provided by OpenSea, which also runs on the Ethereum blockchain and allows users to create, display and store their own NFT collections in a really straightforward and user-friendly way. OpenSea also uses the Ethereum cryptocurrency, although transactions can also be made using dollars and Bitcoin.
There are 11 accepted formats on OpenSea including .jpg, .png, .mp3 and .wav, with a max recommended file size for upload of 40MB (although it will accept up to 100MB). The underlying Etherum blockchain supports smart contracts, meaning I could collect royalties if the artefact were to be sold on after its initial purchase.
I have no experience of creating digital art, so for that reason I decided to choose one of my own photographs, which I did some work on in Photoshop. I selected a jpg file of a dandelion clock that I had recently taken as my digital artefact – the jpg was the right format, within the maximum file size limit, of relatively high resolution and, most importantly, I owned the copyright. I decided to create two versions of the same jpg, and mint each as an individual (1/1) NFT, one that I would ask a friend to buy, and another to leave out in the ether to see if anyone ever finds it !
The actual creation of the NFT would be a straightforward process in OpenSea but there were a number of prerequisites, such as having available funds in crypto currency – this required me to open an account with Coinbase and to purchase ETH (Ethereum coins). Then I needed to open an account with OpenSea, the marketplace where I would mint, display and transact the NFT. Then I needed to link my crypto currency to my OpenSea account – this is done by means of linking a crypto wallet to that account (I chose the MetaMask wallet as it was the most popular).
I was now finally able to create my NFT. This was a surprisingly easy process which I document step-by-step on my NFT Create page.
It was only at this point that I could get any sense of the monetary costs associated with the minting process, so-called ‘gas’ fees – this is where it gets slightly more complicated…
The creation of an NFT is a data-mining transaction with two variables a) the complexity of the task (i.e. number of computational units) and b) the market rate charged by the miner who undertakes the task (i.e. cost per unit, which fluctuates depending on the time of day, the volume of traffic on the network and other market forces). By multiplying the two, the ‘gas’ fee is calculated. Traditionally this is how most blockchains have charged for the creation of NFTs. However, the OpenSea marketplace has recently turned this model on its head and introduced the concept of “Lazy” minting, whereby the NFTs are minted upon sale, not on creation/listing. So it’s now free to create NFTs and have them hosted on OpenSea but in order to list the NFT for sale you must pay a one-off fee to ‘initialise’ your account. The initialisation process is in itself a blockchain transaction and again this price fluctuates, according to the value of the markets. Assuming you’re happy to pay this initialisation fee (in my case it was 0.042184 ETH or $177.58) you can go ahead and sell your NFT. Once an NFT does sell, OpenSea takes a sales commission (currently 2.5%), plus the purchaser of the NFT pays ‘gas’ fees for the processing of the transfer of ownership i.e. the creation of another block on the chain.
It took a fair bit of time to complete the task, but now that I understand the process and have all the structures in place it means that I can create NFTs very easily. I did a lot of initial research to find out the best way to approach the minting process, as I initially had no idea how to go about creating an NFT. My goal to create an NFT and make it available for purchase was met, but I didn’t manage to sell an NFT as I wasn’t prepared to pay the initialisation fee to OpenSea. In summary I am able to answer the three questions I posed at the start of this page:
What are the technical knowledge requirements ? I think if I had attempted this even 12 months ago, the technology would not have been developed enough to allow for a novice like me to be successful. I would say that it required very few technical skills, once accounts have been set up, apart from an ability to drag’n’drop to upload the jpg file.
What are the associated costs ? Once I got in to the weeds of the process I realised just how costly and complicated NFT sales can be. There are three main areas of cost – gas fees (the variable computational transaction cost), initialisation fees (akin to a membership fee for the OpenSea platform), and commission (on each sale). But again, now that I have completed the task, I would be comfortable telling artist friends that it would cost in the region of $200 to set out their stall on the marketplace.
To what extent would the artist feel ‘ownership’ of the process ? I think NFTs give the artist tremendous agency with regard to the display and sale of their works. The requirement for very basic technical knowledge and a relatively low entry cost (compared to the 50% commission most traditional galleries charge), coupled with smart contracts (which provide residuals for the artist each time the work is sold) gives the creator a huge amount of agency in the process.
I found this to be a fascinating assignment – it has given me a much greater understanding of NFTs than I ever thought possible, and I don’t think I would change the way I approached the task, as I ended up learning so much from any of the mistakes that I made.
91+ Blockchain Statistics, Facts, and Trends For 2021 (2021) TechJury. Available at: https://techjury.net/blog/blockchain-statistics/ (Accessed: 10 December 2021).
Dale, B. (2021) It’s an NFT Boom. Do You Know Where Your Digital Art Lives? Available at: https://www.coindesk.com/tech/2021/02/23/its-an-nft-boom-do-you-know-where-your-digital-art-lives/ (Accessed: 30 November 2021).
Johnny Harris (2021) NFTs, Explained. Available at: https://www.youtube.com/watch?v=Oz9zw7-_vhM (Accessed: 25 November 2021).
Non-fungible tokens (NFT) (no date) ethereum.org. Available at: https://ethereum.org (Accessed: 25 November 2021).
OpenSea (no date) OpenSea, the largest NFT marketplace, OpenSea. Available at: https://opensea.io/ (Accessed: 29 November 2021).