Recently, you may have seen an increased interest in such a phenomenon as NFT. In the news there are constant headlines about huge profits from investing or selling digital values, but what is behind the NFT market? Is it a new promising direction or just a bubble that will soon burst? Let's find out!
What is NFT (in very simple words)
Imagine that you come into a store, notice a very cool sweater, go to the cash register, and buy... a tag. This tag cannot be faked and is proof that it is you who owns that particular item. However, you do not receive the item itself, only a tag that proves you are the owner.
That is, the NFT (non-fungible token) is a certificate of ownership of a digital asset (most often an image, music, meme or an object in the virtual world). This certificate is created on the basis of the blockchain, which in turn excludes the possibility of its falsification. Buying an NFT image makes you its owner, but it does not prevent other people from copying, downloading or saving it to their device.
It's about Uniqueness
The NFT token is unique, so it's best for authentication, and it can be created for anything. But why do these tokens have value? The answer is very obvious - they are one-of-a-kind. Users can infinitely copy the same image, but the owner remains the one who has ownership rights that are backed by NFT. Blockchain technology makes digital artwork (or any other object) unique and gives it real value, allowing it to be traded.
How do I make money at NFT?
And that's really where you have several options:
Be an author.
If you do any kind of creativity you can monetize it by selling digital items or even entire collections! For example, in 2021 the CryptoPunks pixel NTF collection reached a value of $106,000!
Become an Investor
You can buy various digital treasures in order to resell them later at a higher price, but it is hard to guess if a particular collection will arouse the interest of potential buyers in the future.
Create a Marketplace
This option we couldn’t exclude, because if you create a marketplace like OpenSea, you can allow artists to post their works there and take a small commission for the transactions. This way is more resource-intensive, but it plays in the long run and allows you to earn really good money on NFT.
How to create an NFT?
To create an NFT you need three things:
- The object itself (picture, music, gif, video clip, etc.)
- A cryptocurrency wallet for authorization on the marketplace
- Some cryptocurrency to pay the fee for creating and posting to the Marketplace
Yes, services take a so-called gas fee, which is deducted from your wallet the moment you mint your non-fungible token. Gas can be either a fixed amount, or a percentage of the value of the token.
There are ways to create a token for free. For example, the Treasureland platform passes all costs and commissions to the prospective buyer. They will only charge you a gas fee if you want to transfer the ownership of your token to another user for free. This is only one example of how you can create a token for free, in fact there are many more ways, here we can advise you to google and choose the one that will suit you best :)
I want to create an NFT marketplace, what to do?
Step 1: Determine your business goals.
Look at what is already on the market, what services these marketplaces provide, and what exactly your site can interest potential artists and investors. It is also worth defining at the very beginning the target audience, what token protocol you will use, monetization model and other critical things. Next, together with the development team, you should study the details of the project and make an assessment of the project's viability. Once the business goals of the project have been outlined, you can move on to the next step.
Step 2: Design of the project, technical requirements, development plan.
When all the technical requirements and the development plan are coordinated with the developers - you can start developing the project. You should pay special attention to UX / UI design, because the interface is the first thing the user encounters. A good UI is able to attract the user to you and keep his attention on your site.
Back-end development plays a key role in the creation of any site. At this stage you and your team create mechanisms for working with blockchain, smart contracts, creating an auction mechanism and generally implementing the business logic of your project. Owlab's experience shows that quality back-end development ensures not only a very long life to your project but also the ability to scale.
Quality front-end development will ensure easy user interaction with your website, its reliability and performance. In simple terms, front-end is the outer shell of your marketplace.
Step 3: Testing.
Owlab, for example, performs testing at all stages of project development, which allows you to fix critical, non-obvious bugs before they're covered in hundreds of lines of code. The QA team runs several different tests, from content checks to reliability checks under all possible and impossible scenarios.
Step 4: Deployment and Maintenance
When your platform has passed all the tests you're able to run your project. Note that this is a continuous phase! After all, you need to provide ongoing user support, update your project and prepare it for further scaling (for example creating a mobile version of your marketplace).
If you have decided to build your own marketplace - contact Owlab for a free consultation. Our specialists have years of experience in blockchain development and will be glad to help you implement your business ideas!
We hope that this article was useful to you, good luck!