There are two ways that you can obtain an NFT. You can buy it from someone else. Or you can mint it. But what do these terms mean, and how are they different?
When you mint an NFT, you will be creating something entirely new. You can mint from a new digital online project or you can convert items you have created like art, memes, poems, or music into NFTs. On the other hand, buying one will require a pre-existing item that has already been minted into an NFT. There are a few other key differences, like the amount you need to pay and how much risk you are willing to take.
If you are planning to invest in the world of NFT, you must understand the distinction between buying and minting NFTs. This will often affect the value of the token. Keep reading to learn more about the critical differences.
What is Buying an NFT?
Often, you will be most familiar with the process of buying an NFT. To do this, you will need to go to an exchange or platform, choose the NFT you want, then pay to own them. Often, this transaction will occur in Ethereum, but other cryptocurrencies are NFT compatible.
Once you have done this, the NFT will be transferred to you. Because it is encoded within the blockchain, you will be able to prove that you own it. From there, you will be able to sell it to other people for a potential profit or a loss.
What is Minting an NFT?
Minting an NFT, on the other hand, is more complicated. In this case, you will be the first person to own the NFT. Put simply; minting is taking the item and converting it into a digital asset. From there, it can be bought and sold like any other NFT.
Mint someone else’s project
If you want to mint an NFT, you will need to turn to a new pre-minted NFT project. These are often the only ones that are available for minting. Older projects will have already entered their assets onto the blockchain.
An example of a pre-minted project is taking, for instance, an artist or architect who has created furniture or rooms for a metaverse and allows you to pick a package that you then mint and eventually own.
Here are the steps:
- Find a project that you like. The first thing is to select a project that you are passionate about or one that you think will grow more valuable over time.
- Get a wallet like Metamask and Coinbase to convert your fiat currency into the cryptocurrency that is compatible.
- Connect your wallet. This will allow you to purchase the NFTs. Before you do this, check that is an official site and a trustworthy project. There are many scams out there so do your due dilligance.
- Select the number or project you want to mint and review the details. Once you are happy, you can approve the transaction.
- Check your wallet. The NFTs should appear in your account. You will often be able to view and sell them on an exchange, like OpenSea.
Mint your own art, meme, music or games
Alternatively, if you already own the item, you should be able to turn it into an NFT. Here are the steps that you will need to follow:
- Create a Metamask account. This is what you will need to use to create your wallet. This is where you will be able to store your digital assets. You will be able to install the software from the Metamask site.
- Create your store or listing. You will need to decide which site you want to use, then link your Metamask wallet. This allows you to list the NFTs for sale. Some popular sites to this are: Openseas and Rarible.
- Upload items. You will be able to use things like digital art, motion graphics and audio. You just need to upload, set a price, and add it to your store. This should be a fairly quick process.
- Pay the gas fees. Before you can mint the token, you will need to pay the gas fees from your Metamask account. This is the transaction fee. It should be noted that some platforms, like Rarible, might waive this transaction fee.
If you want to dive in deeper and learn how to mint NFTs on the cheap you will want to check out this resource:
What are the Differences?
Hopefully, you now have a better idea of how each of these options works. Now we can dig deeper into what the differences are, so you can find the right option for you.
Risk
One of the first things that you need to consider is how much you are willing to risk. When you are buying an NFT you get more information, which lets you assess if you are making a good choice. For example, you will be able to see the previous price history. You’ll also have a better idea of the type of demand that the project will receive.
On the other hand, minting an NFT will be riskier. The project will often only be in the initial stages. Because of this, it will be difficult to predict whether they will take off or fall flat. Though you can do some research and consider previous trends, there are no guarantees in the world of NFTs…ever.
Investing in an NFT project can be a little like mining for gold. You might strike it rich, minting a hugely popular token. Or you can be left with a project that no one shows a lot of interest in and lose all the crypto you invested.
One other thing to mention is that minting an NFT comes with additional benefits. You might be able to set it up so that you get royalties from the NFT. This means that you get a small cut of any future sales. This can be hugely beneficial if you mint a popular token or become a popular and collectible NFT artist.
If you are curious about what it takes to make your NFT collectible, then this article will help:
Cost
The other thing that you need to consider is how much it will cost to mint the token. This will often depend on the option you are taking. Generally:
- Minting your own content. This will be the cheapest option. Depending on the platform, you might be able to do this for free. In other cases, you will just need to pay the gas fees, which all cryptocurrencies will attract.
- Minting from a new project. The other way of minting content is a little more expensive. Generally, though, you will be paying one set fee. This tends to be fairly low, though it will depend on the quality of the project and the platform you are minting to. On average, though, it will be around $900.
- Buying the NFT. This has the widest variation. If you are quick to identify a promising project and can get it shortly after it’s been minted, it won’t be too expensive. But if you wait, the price can jump quickly. Some have sold for millions of dollars. Then again you need to know what you are doing as the market is severly saturated with losers that end up with a value less than what it cost to mint.
Amount of Work
Buying and reselling NFTs, though still a risk, is a fairly easy prospect. All you need to do is identify which projects could increase in value over the coming months or years.
On the other hand, minting your own NFTs will be a more involved process. If you are selling your own artwork, you’ll also need to do your own marketing. You’ll need to convince people to pay attention to your project and buy your NFTs. While this will be a lot of work, it also has the potential to be highly rewarding.
Final Thoughts
There are two main ways that you can obtain an NFT. You can either make one yourself, by minting, or you can purchase a pre-existing one.
Both will come with their own set of pros and cons. For example, minting will often be cheaper…you will just need to find something you want to mint and pay the gas fees.
On the other hand, buying an NFT will be less risky, as you already have an understanding of how people will react to the project. Ultimately, though, which path you choose will depend on your investment style. As always, be cautious with what you do with your crypto. There tend to be more losers than winners.
The other cool thing is that it’s just plain fun to purchase MFTs from your favorite artists and musicians. Heck, even collecting sport NFTs has shown to be an exciting ride. If you need some more perspective on collecting NFTs, this link will help.
Just a fad?
I don’t believe NFTs are going anywhere, and this article just may show you why: 10 Reasons Why NFTs Will Change the World. Within that article, you will see how NFTs are geared up to change how commerce, banking, and art are done. Don’t sleep on this tech!