A detail shot from a collage “EVERYDAYS: THE FIRST 5000 DAYS”, by a digital artist BEEPLE, that is on auction at Christie’s, unknown location, in this undated handout obtained by Reuters.
Beeple | Christie’s Images Ltd. | via Reuters
You’ve probably heard a lot about nonfungible tokens (NFTs) recently.
Mike Winkelmann, the artist who goes by Beeple, made headlines earlier this month when he sold an NFT for $69 million. But people are spending millions of dollars on all sorts of collector’s items, from sports trading cards and highlight reels to digital houses, augmented reality sneakers and music.
I’m going to show you how to buy and sell them.
An NFT is a new type of digital asset. Ownership is recorded on a blockchain — a digital ledger similar to the networks that underpin bitcoin and other cryptocurrencies. Each NFT is unique and can’t be duplicated. So, you can think of them as unique digital items nobody else owns. Sure, people might have an image of a piece of art you purchased as an NFT, for example, but they don’t own the original. That’s what makes them enticing. And there’s the prospect that because they can be rare, you might be able to sell one later for more money. Just like you would with fine art.
You can use various currencies to buy NFTs. NBA Top Shot, for example, lets you buy them with a credit card. But other platforms require you to buy using some form of cryptocurrency.
I’ll show you how to get in on the NFT craze using the popular platform OpenSea now. And I’ll also show you how to turn digital assets into NFTs and sell them, in case you’re an artist who wants to sell something.
OK, you’ve heard about all these artists and people selling NFTs. You want to start your own collection. Where do you begin?
You can shop for them online through various marketplaces. OpenSea is a big one, and you think of it as an online gallery where you can browse digital art, trading cards and other collectibles.
It works like an auction house, where you offer bids on items and hope you’re the winner, but some listings like you ‘Buy now” for a set price. I’m going to show you how to buy NFTs on OpenSea in this guide, but there are some things we need to do first.
Installing the MetaMask digital wallet in Chrome.
Before you begin, you need to add money to a digital wallet that you can spend from.
OpenSea uses ether, a cryptocurrency, which you’ll need to buy. Think of it as an arcade: you walk in and you want to play some games. But before you play the games, you need to buy some tokens. Same idea here, but the tokens are called ether, and instead of buying lots of tokens, you’re probably going to start small with fractions of ether. As of March 23, a single ether is worth about $1,706.
OK, so back to that digital wallet. OpenSea suggests using a plug-in for the Chrome browser called MetaMask, but supports lots of other digital wallets.
It took me about 30 seconds to install the plug-in from OpenSea and set a password. Let’s do that now.
- Tap the profile icon on the top-right of the OpenSea website.
- Click “Get MetaMask”
- Choose “Install MetaMask” for Chrome (or the supported browser of your choice.) This installs a Chrome plug-in.
- Choose “Get Started.”
- Select “Create Wallet.”
- Choose “No thanks” for sharing feedback.
- Create your password.
- Write down the secret phrase it gives you. This is super important and is your backup to access your account. Don’t lose it.
- Tap Next and confirm the secret phrase.
- Click “Next” to connect your OpenSea account with the MetaMask digital wallet you’ve just created.
- Click Connect again.
Ok, now you have a digital wallet that’s connected to OpenSea. Now you need to buy some ether you can spend on NFTs.
You’ll need a digital wallet to buy NFTs.
You can use any variety of apps to buy cryptocurrencies. Coinbase is hugely popular. So is Robinhood. But for simplicity, let’s use MetaMask to buy ether, since we’re already using that as a digital wallet and have already connected it to OpenSea.
In the last step, we installed the MetaMask plug-in for Chrome. We can use that same plug-in to buy some Ether. To do that:
- Tap the little puzzle piece icon on the top-right of Chrome at the end of your URL box.
- Click the MetaMask fox icon.
- Tap “Buy.” (Select “Directly Deposit Ether” if you already have some in another account.)
- Click “Continue to Wyre”
- Choose how much ether you’d like to buy. There’s a $5 transaction fee and a $4.88 network fee, so buy all the ether you need now to avoid additional transaction fees. Get used to those fees, there are more when you buy something.
- Click Next.
- Enter your payment information and phone number.
- Tap “Submit.”
- Enter in the payment authentication code you received on your phone.
- Authorize the purchase by entering the six-digit code for a pending Wyre transaction in your bank account.
Now you’ve purchased some ether. In a few minutes, you’ll see it available in your MetaMask account. That means you’re ready to buy NFTs.
Here’s a collectible CryptoKitties NFT.
Now you’re ready to bid on and buy NFTs. Let’s go back to OpenSea. You can browse around by tapping “Explore.” You’ll find all sorts of images for sale, whether they’re rotating objects, flashing icons or just text sayings.
Eventually, you may come across something you want. Let’s say we like this CryptoKitties image (above) called “Zuzu Meowfluff.” It’s priced at .005 ether, which is about $8.96 at the time of publication.
To buy it, I just:
- Tap “Buy Now.”
- Select “Checkout.”
- Click “Submit.”
- Next, I have to confirm a “gas fee.” This is required by the Ethereum network to process the transaction and costs me $18.18. The full transaction ends up costing $26.68.
Now I own that Zuzu Meowfluff CryptoKitties NFT.
But I don’t collect these. So let’s sell it. I’ll show you how to make and sell your own NFTs, too.
Selling an NFT for a picture of Porto, Portugal I took.
You have some cool digital art, or maybe a Zuzu Meowfluff you’re ready to sell. Let’s make that an NFT and list it for sale now. I used Rarible, since it was just a little cheaper and easier to set up, and it links into OpenSea if someone happens to search it.
- Go to Rarible.com and tap “Create” on the top-right.
- Create a single or multiple (the latter for a collection of, say, photographs or collecting cards you’ve created).
- Select “Choose File” to upload a PNG, GIF, MP3 or another file type. The max size is 30MB.
- Enter in the price you’d like, or leave “put on sale.” I’ll list this picture of Porto, Portugal, I took for 0.5 ether. After a 2.5% service fee, I’ll get the equivalent of $826.91. If this thing ever sells. Seems reasonable.
- Enter in a name for your NFT and a description.
- Set your royalties. You’ll continue to get paid if it resells on the secondary market. This is based on the current sale price.
- Choose “Connect wallet ad create.”
- Connect your wallet, which we set up in the earlier section above. So, tap “MetaMask.”
- Pay the “Gas” fee to process the listing. In this case, it’s $75.64, or 0.044091 ether.
- Click “Start” to sign the sell order using your digital wallet.
- Click “Sign” in the MetaMask pop-up.
That’s it! Now it’s listed. In this case, I can find it on Rarible or on OpenSea by searching “Porto, Portugal.” Offers will appear on the sale page. If it ever sells, the funds will transfer to my digital wallet. Then I can use them to buy other NFTs or cash out using an app like Coinbase.
CNBC’s Ryan Browne contributed to this report.