Oct 12, 2021
What is the Process for Selling Your NFT Artwork?
You have a piece of digital art that you think is unique, scarce, and valuable. How do you know that it is valuable? You can’t be sure because you only know it is valuable if someone is prepared to buy it. To sell the image, you need a market on which to trade. A recognised market for selling digital art is opensea.io. The process primarily uses Ethereum as the “currency” based on blockchain technology using smart contracts. Using OpenSea, you can mint an NFT attached to the artwork and a smart contract that can be traded.
You may have to first get your mind around the principle of digital art having value. Just in Time Article #91 covered this concept.
My wife is an artist. This cute doggie is an example of her artwork. It is a picture of an iced biscuit. Yes, you can eat it. Not the picture, of course, but the biscuit is made to be eaten. My wife’s client sent her a picture of their dog and asked her to make a set of biscuits depicting the dog. The glasses are artistic license. If you go to Gillie’s Biccies you can see the full array of my wife’s beautiful edible artwork.
My hypothesis is that the novelty and creativity of biscuit art have value. It has value as a biscuit, but does it have value as NFT artwork. There is only one way to find out: to create a digital image of the biscuit, mint an NFT that is attached to the image and list it on the market.
There are millions of digital images for sale on OpenSea and although everyone is unique, many don’t sell or even attract a bid. Lack of liquidity is a problem, but this market will grow and develop in time, and the winners and losers will emerge. It appears that NFT artwork is like sand on a beach. At a distance, the grains of sand all look the same. Occasionally, while walking on the beach, one stumbles across something quite special, like a beautiful shell or a smoothed piece of sand glass. That is the piece that you pick up and put in your pocket to show to someone later. The analogy here is that one needs to be adding to the beach. Many will add sand, some will add stones, others will add shells, and occasionally something completely unexpected will appear. Only time and the market will reveal the value.
There are a few pieces to the NFT puzzle. OpenSea is a platform or the market on which NFTs are bought and sold. You need to own some Ethereum and have some Ethereum in a wallet connected to OpenSea. MetaMask is the most popular wallet. Several YouTube videos will show you how to open these accounts and connect your wallet. When listing your first NFT for sale on OpenSea, you will discover “Gas Tax”. Gas Tax is a once-off fee for a first-time seller and buyer. It is not unusual to buy your first NFT for $50 (denominated in Ethereum) and pay a Gas Tax of as much as $100. The fee is variable and based on transaction speed, depending on the time of day or how busy the platform is. If you use OpenSea to do a once-off low-value transaction, the Gas Tax will exceed the transaction costs. The incentive is to create many NFTs so that ultimately the Gas Tax isn’t material when amortised across a collection of NFTs.
Remember that an NFT is subject to variance in the value of the digital artwork itself and the volatility of the USD price of Ethereum. The volatility of cryptocurrencies, in general, will impact the enthusiasm for NFTs. The winners in NFTs will be those that can play the long game and develop a reputation of quality, durability, celebrity, authority, and scarcity. All the attributes that matter in the tangible world of art will matter in the digital art world of NFTs.
Justin Spencer-Young
