In 2021, the artist Mike Winklemann, known as Beeple, made history with the auction of Everydays: The First 5,000 Days. But the buyer didn’t receive a physical piece of art—they got an encrypted JPEG file, transferred to their wallet on the Ethereum blockchain. The $69.3 million price tag made this image the most expensive non-fungible token (NFT) ever sold, and the third most-expensive work sold by a living artist at auction.
Creating an NFT doesn’t guarantee millions in revenue, but with the right strategy, selling digital art could be a fruitful venture. Here’s how NFTs are made, the different types, and how to create and sell NFTs.
Table of contents
What is an NFT?
A non-fungible token (NFT) is a unique digital asset verified on a blockchain. Think of an NFT as a certificate of ownership for digital files. A blockchain is a distributed digital record of transactions, maintained across multiple computers that are linked in a peer-to-peer network, making the records difficult to alter.
Each NFT has a unique cryptographic identity, partly stored on the blockchain and partly in the file’s metadata. This contains a token ID, the asset’s and owner’s blockchain addresses, a chain ID (or network ID) specifying which blockchain hosts the NFT, and a smart contract that contains and executes terms of use or sale. These identifiers establish ownership and verify authenticity. The process of creating an NFT is called minting.
Proponents argue that NFTs have inherent value because each token is unique, non-fungible (not replaceable), and cryptographically secure. In their view, owning an NFT is like owning an original oil painting: Many can buy a print of a melting clock, but only one original Persistence of Memory exists.
Almost any type of digital asset can be made into an NFT. Common types include:
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Image files. JPGs, PNGs, and GIFs can all be sold as NFT artwork.
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Collectibles. Digital trading cards or NFT collections can add exclusive appeal. Examples include the Bored Ape Yacht Club, an NFT collection of profile pictures of cartoon apes generated by an algorithm.
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Music files. Songs and other audio files can be sold as NFTs. With verifiable ownership, owners may be able to earn income by licensing the file for commercial use.
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Video game elements. Video games can use blockchain and NFT smart contracts to sell unique in-game items, like tools, weapons, or character accessories. Once purchased, these assets can be traded or sold between players. The trading game Gods Unchained, for example, uses NFT-based digital cards.
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Utility tokens. Utility or security tokens are like digital membership cards, providing access to websites, events, or experiences.
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Domain names. With an NFT domain, a website’s address and content are hosted on the blockchain. Unlike traditional DNS domains, blockchain domains don’t require renewal.
Where to buy and sell NFTs
Most NFT sales happen on NFT marketplaces—digital exchange platforms similar to ecommerce marketplaces. NFT creators upload files to the platform and create product listings, and shoppers can search, browse the product catalog, or sort assets by type, artist, price, or currency.
Popular marketplaces include OpenSea, Foundation, and SuperRare. Your marketplace choice affects your fees, audience size, and which blockchains you can use. Other sales options include private peer-to-peer sales, in which one user transfers an NFT directly to another’s wallet, and auction house sales, such as the Christie’s auction of Everydays: The First 5,000 Days.
Most NFT marketplace transactions run on cryptocurrency, meaning shoppers typically need a crypto wallet to make a purchase. After a purchase, most platforms will automatically transfer ownership of the NFT to the buyer’s secure wallet. Popular marketplaces support NFTs across several blockchains, including Ethereum, Solana, and Polygon, and accept multiple types of cryptocurrency.
NFT marketplaces charge a transaction fee and earn a small percentage of each sale. Charges depend on the platform. OpenSea, for example, charges a 2.5% fee.
How NFT royalties work
Many NFT markets support secondary sales. Some marketplaces pay a royalty fee, a small percentage of each sale, to the original creator if the asset is resold. This means you can earn passive income every time your NFT changes hands.
Creators select a royalty percentage during the minting process and it’s written into the NFT’s smart contract. Platforms like OpenSea and Foundation allow fees up to 10%.
How to sell an NFT
- Create an asset
- Select a blockchain
- Create a crypto wallet
- Choose a marketplace and mint your asset
- Select a sales method and promote your product
You don’t need to know how to code to start selling NFTs. Cryptocurrency exchanges and NFT marketplaces handle the technical work for you. Here’s how to upload and sell NFTs:
1. Create an asset
Create, compose, design, or select the digital asset you would like to sell. NFTs must be original content, so ensure that you own the rights to all of the creative intellectual property included in your file.
Various file types, including JPGs, MP4s, MP3s, and GIFs, can be minted as NFTs, but not every marketplace accepts every type of file. For example, OpenSea does not accept MP3s. If you have a preferred NFT marketplace in mind, review the platform’s asset requirements to ensure compatibility.
2. Select a blockchain
Your blockchain choice affects your profit margin and buyer reach. Choose a blockchain to store your NFT based on minting costs, buyer trust, and which marketplaces can list your NFT.
Prices vary depending on platform popularity and traffic patterns. For instance, uploading during high-traffic times leads to higher costs.
More established networks, such as Ethereum, tend to have higher initial fees, sometimes known as gas fees. If you plan to sell directly to consumers, a well-known blockchain supported by most NFT marketplaces can inspire confidence.
Smaller blockchains may be more affordable and well-suited to niche use cases. Solana, for example, is often associated with anime—the network is home to a memecoin called Ghiblification, inspired by Ghibli-style animation. This connection might make it a good choice for anime-related assets.
3. Create a crypto wallet
Create a crypto wallet—a digital account that lets you hold cryptocurrency—which you’ll link to your chosen NFT marketplace to buy, sell, or manage your NFTs. It authenticates and enables transactions.
Wallets are typically built on specific blockchains, such as Ethereum or Solana, so your wallet needs to be compatible with the blockchain where your NFT is stored. To simplify setup, use a cryptocurrency exchange like Coinbase or Kraken to create a secure account. You’ll need to transfer funds to your wallet to cover any initial listing fees or gas fees.
4. Choose a marketplace and mint your asset
Select an NFT marketplace, follow the steps to connect your crypto wallet, and upload your asset. The platform creates a smart contract and a unique token ID during the uploading process. This officially mints the asset and connects your newly formed NFT to the blockchain.
At this point, you can add a title, create a digital signature, write a description, and include any terms, such as resale conditions. Including a detailed asset description in your product listing may help shoppers discover your product via search.
5. Select a sales method and promote your product
Create a listing on your chosen NFT marketplace or select an alternative approach like peer-to-peer sales, private auctions, and ecommerce listings. Selling NFTs through Shopify Payments requires preapproval.
Marketplaces offer two listing approaches:
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Fixed price sale. Items are listed for a specific price and available until sold. Creators select a set price, confirm listing details via their wallet, and publish listings.
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Timed auction sale. Items are made available for bidding during a specific time frame. At the end of the time period, the highest bidder wins the NFT. Platforms like OpenSea, Rarible, and Foundation let creators set a minimum sale price.
NFT sales are heavily dependent on community presence. Use your personal or professional network to promote your sale by posting on your social media profiles or teasing product details on relevant community platforms.
