NFT Marketplaces for Artists and Selling Digital Art
A couple of years ago, crypto art has exploded on the internet. By now, paintings by artists have been selling for hundreds of thousands dollars, people have been turning memes and songs into tokens, and NFT marketplaces have been springing up like mushrooms. Some money makers have managed to profit greatly from this trend by selling digital art.
In this article, we will discuss what crypto art is, how to buy it on NFT marketplaces, and whether it is possible to predict in advance which lot will be profitable in the future. We have compiled answers to questions that interest web users and prepared a list of NFT marketplaces for trading crypto art.
First of all, what is an NFT?
The abbreviation NFT stands for non-fungible token. It exists in the blockchain environment, which is the foundation for all well-known cryptocurrencies, from Bitcoin to thousands of altcoins.
Blockchain is a vast database stored on remote computers around the world. The blockchain has no central authority, so it cannot be completely eliminated. All nodes serve as key storage points, similar to checkpoints in games, so disabling one node does not affect the state of others.
A non-fungible token is created based on the blockchain and represents a digital certificate that confirms ownership rights to crypto art. For people who are unfamiliar with the world of cryptocurrencies and do not even have a basic understanding of how blockchain works, understanding this technology can be quite challenging.
Let’s break down NFT with a simple example so that even beginners can roughly understand how it works:
Imagine you have the very first Pokémon trading card, which is 50 years old and exists in a single copy. Collectors constantly battle for it and offer impressive sums, but you don’t want to sell the artifact.
Here comes the NFT – with this technology, you can turn a physical object into a virtual asset and sell it on any platform or find a buyer independently. You can take a photo of the trading card, create an NFT token, and list it for sale.
If there is no interest in the artifact and you want to squeeze more money out of it, you can destroy the trading card. Then, the photo becomes the only original, and its source will exist in a single copy. In this case, the value of the crypto art will increase significantly.
A similar approach was taken by an American company – they bought a painting by the digital artist Banksy for $95k, digitized it, then burned the original and recorded the process on video. After some time, they sold the artwork for $100k. Meanwhile, the artwork is one of 500 copies.
Returning to the Pokémon trading card story, even if the owner did not destroy the physical copy, they can still sell the original photo in the form of an NFT. This is the essence of non-fungible tokens.
The photo of the trading card can be saved on a computer, printed in any quantity, and even turned into an NFT. In essence, it will not differ from a similar token, except that the original author has evidence of uniqueness.
Blockchain confirms ownership rights to digital assets, but the physical copy can still be held by the original owner. The uniqueness of NFT lies in the fact that the new owner of crypto art can resell it, and the author will receive a percentage from each sale.
Actually, it doesn’t make sense for money makers to delve into the technical details of virtual tokens because there are many technicalities. They only need to know that there is a good opportunity to make money in this field. Digital artists are currently selling copies of their works for millions of dollars and coming up with new ways to increase the value of their art.
NFT tokens are sold on specialized platforms – crypto art marketplaces, in other words NFT marketplaces. They can be compared to familiar e-commerce platforms like Amazon or Ebay. The service acts as an intermediary, and the buyer and seller conduct transactions with minimal interaction with each other.
The NFT technology was actually launched in 2017, but it gained significant attention only after 3 years. It is no longer just another cryptocurrency-based tool; it has become a hype train racing at high speed across the internet.
For example, DJ 3LAU sold his music album for $11.6 million, and the singer Grimes earned $5.8 million from the sale of tokens created from four ordinary drawings. Over the years 2020-2021, many well-known personalities were able to profit from tokens and earn millions with minimal effort.
Another interesting lot that was sold for an astronomical sum was a token of the original rainbow cat GIF. The author received $590k for the NFT, even though a similar image can be downloaded for free.
From a technical point of view, any NFT is a set of lines of code. However, the certificate contains unique information for each digital artwork. That is why people from all over the world are spending a lot of money to build their personal collections and sell them for millions in the future, or at least recoup their expenses.
What can be sold as a token?
In fact, almost anything can be turned into a token. Take a dollar bill, write a Latin phrase on it, digitize the “work of art,” pay a commission, and list it on an NFT marketplace. Perhaps someone will even buy the lot and allow the author to earn a few hundred bucks.
On NFT marketplaces, thousands of collectors search for unique lots among the monotonous junk for hours. However, each person has their own criteria for uniqueness. Therefore, it is impossible to predict in advance the profit from buying a digital asset.
Here are some things that can be turned into tokens and sold:
- 3D models;
- Digital illustrations;
- In-game items;
- Real estate.
Practically any object can be converted into an NFT; it all depends on the author’s imagination. According to publicly available sources, tokens have recently been actively used for real estate transactions, and one artist was even able to sell a 3D model of a house for $500k.
Famous Russian artist Pokras Lampas sold a photograph of his work for almost $30k. Collectors are buying everything indiscriminately, without worrying that countless similar tokens can be created. True, the original will be with the first owner, but from the perspective of an ordinary user, there is no difference.
Digital characters are particularly popular among NFT enthusiasts. Collections of crypto punks and crypto kittens are being auctioned off for huge sums. In May of 2021, one of the most prestigious auction houses, Christie’s, sold 9 rare NFTs featuring CryptoPunks characters for $17 million.
Thousands of artists from around the world have joined the distribution of digital collections. For example, right now on the Binance exchange, a token tied to a cat illustration is being sold for 505,000 ₽.
The lot description states that it is one illustration from a collection of 5,000 drawings. The activity is not very high at the moment, but the author has every chance of selling their artwork for the specified amount. It is impossible to predict the successful completion of the auction, but the tremendous demand is doing its work.
Special attention should be paid to domains. Lately, sellers have been actively listing lots in the form of NFTs. Regular sellers are not doing very well, but the organization that manages the TOR project sold the first .onion domain for $1.7 million in May 2021.
By the way, the sale of the domain nft.com was recently completed. It was purchased for $2 million. The domain was first registered in 1995 and has been idle ever since. The 26-year investment has paid off well enough.
Why are NFTs being sold, bought, and how much do they cost?
It is difficult to answer why NTFs are sold, because many people think that the niche is not worth attention. Skeptics can be agreed with – NFT is a digital certificate that has no legal force.
There is no point in seeking an answer to this question. It’s like asking why affiliates generate traffic. The answer is simple – to make money. The same goes for NFTs – the more hype surrounding the topic, the more opportunities to profit.
If you’re already planning to open a wallet in an NFT marketplace and have prepared money to buy tokens, don’t rush. You can buy cheap lots in the hope that one of them will increase in price over time, but this tactic can be a failure.
Diving into a new topic needs to be done right. First of all, understand the criteria by which potential buyers evaluate NFTs and spend time analyzing trends. It is enough to look at popular NFT marketplaces and follow the course of trading.
For example, on one of the top NFT platforms, OpenSea, millions of lots are sold, but cryptopunks attract special interest. Some time ago, a digital character was sold for 4200 ETH or $8,1 million at the current exchange rate.
The cost of NFTs varies depending on the uniqueness of the digital asset tied to the token, the reputation of the author, and the popularity of their profile on the NFT marketplace. Newcomers can also quickly sell their lots, but the transaction amount is unlikely to be significant.
Things are going well primarily for opinion leaders who attract public attention to their activities on crypto NFT marketplaces and top sellers regularly making it to the top ranks of marketplaces.
If you set the filter for ending auctions in the OpenSea settings, it becomes clear that entering the niche is not that easy. Buying artifacts for a few thousand dollars is not a problem, but reselling them can be problematic.
Most transactions close with minimal bids ranging from $1-2k, and some end without a sale. It is impossible to predict in advance how active buyers will be unless it involves another cryptopunk.
NFTs are purchased for several reasons:
- The topic is currently hyped. Interest in it is growing, and the volume of financial investments is increasing at a rapid pace.
- There is a chance to make quick profits. An optimistic scenario can allow you to resell a lot with a x1000 multiplier.
- There’s nowhere else to put the money. Sometimes it’s better to buy NFTs than to spend a few hundred bucks on affiliate marketing.
If we consider crypto art from an investment standpoint, the idea is as risky as investing in bitcoins. Cryptocurrency has been declared dead for many years in a row, but its price dynamics prove otherwise.
Therefore, it is possible to invest in NFTs, but only an amount that can be lost without potential harm. Selling a car or giving away all your savings for another illustration is not the best idea.
NFT marketplaces for artists
There are a huge number of NFT marketplaces on the internet where you can buy and sell tokens. Every day, thousands of sellers from around the world list lots from their collections.
Many marketplaces act as converters, allowing the issuance of tokens tied to digital assets, but they charge a commission for it. Some platforms allow listing a lot for sale, and the NFT is generated during the transaction.
In the short period of the NFT marketplaces’ existence, a list of top platforms has been formed among token sellers. We will briefly describe each of them and highlight key features that will help make a choice in favor of a specific service.
This NFT marketplace is focused on selling digital paintings, illustrations, and videos. To buy a token, it is necessary to authenticate through the MetaMask or WalletConnect crypto wallets, and not everyone can sell lots.
To list artworks, an invitation is required, which can be obtained through activity on the official Discord channel. The platform positions itself as a community for artists, so all decisions are made by them. Profile verification can be done through an Instagram or Twitter account.
For publishing the first artwork, the system charges a commission that depends on the current situation in the blockchain. This NFT platform takes 15% of the lot’s value, and for each NFT resale, the author receives 10%. Only ETH is used as the currency.
One of the most popular crypto exchanges, Binance, also hase its own NFT marketplace. Despite its huge user base, there is not much activity on the platform yet, possibly because the niche was already divided by the time of its release.
Registration is open, but a verification procedure is implemented. The service stands out with its low commission, up to 3.5% of the transaction amount. The main difference is that you can buy or sell NFTs using 161 cryptocurrencies of your choice.
To complete the verification process, you will be asked to fill out a detailed questionnaire, upload a scanned passport, and take a selfie. The identity verification process takes about 10 days, but it is usually faster in most cases.
This NFT marketplace is known for selling expensive lots dedicated to crypto art. Sellers can create multiple NFTs from a single digital asset or issue a token in a unique edition.
To register a profile, you will need an address from one of the cryptocurrency wallets. The system offers three types of transactions: fixed price, time-limited auction, and open auction.
The service charges a 2.5% fee for publishing a lot with a fixed price. A 10% commission is deducted from the transactions. It supports five cryptocurrencies and has a smartphone application.
It is the first and largest NFT marketplace, holding a leading position in the niche. It operates on the principle of eBay, but exclusively for NFTs. In this platform, you can sell any type of lot without being restricted to specific categories.
The commission for publishing the first artwork cannot be determined in advance. For each transaction, the NFT marketplace charges a 2.5% fee. It supports three cryptocurrencies. Registration is open without the need for invitations or verification.
This NFT marketplace is often compared to Rarible, but all the top lots are concentrated here. It positions itself as a premium service in the niche, making it quite challenging to become a seller. Registration is open, but an interview is required to list a lot.
The platform’s unique feature is the ability to list artworks that change depending on the date or other events. Registration is open, and there is no fee for publishing, but the service retains 10% of the lot’s value after the transaction is completed.
To create a profile, you will need a username and email. Digital artworks are divided into layers and change according to rules set by the artist. To publish works, you need to fill out a small form and provide a portfolio.
How to Sell NFT Art
To sell a token, you’ll need a MetaMask wallet and registration on any marketplace you like. You can list your artworks on multiple NFT marketplaces simultaneously, but in each case, you’ll have to pay a commission for minting the tokens.
If necessary, you can create a profile on the Binance exchange and buy any cryptocurrency. However, most NFT platforms are geared towards ETH, so it’s advisable to choose it.
Novices should be aware that there is a fee, called “gas fee,” for transforming a digital asset into an NFT. Its cost is determined by the network congestion of Ethereum. For example, the current gas fee can be around $10, but it can increase to $100 over time.
We recommend tracking the size of the gas fee using the EtherDrops Tracking Bot. In the bot’s settings, you can set a threshold for receiving notifications and create NFTs with minimal fees.
If you decide to earn money with tokens through resale, you won’t have to mint them again, but it’s important to pay attention to the conditions of purchasing lots. For example, if the author receives a 20% royalty, and the NFT marketplaces takes an additional 10%, the commission fees will be quite high.
Practically all advice on selling NFTs is useless because the value of each token depends on a multitude of factors. Perhaps it’s easier to make an accurate forecast about the price dynamics of Bitcoin than confidently say how much crypto art will sell for.
Future Forecast for Crypto Art Sales
The NFT market is currently at the peak of its popularity, and experts predict that sales volume will only increase in the coming years. Best NFT marketplaces are already conducting transactions worth hundreds of millions of dollars each month, and investor interest continues to grow.
For non-artistic individuals, it’s advisable to adopt a passive investment strategy. If desired, one can purchase tokens for a small amount and try to resell them.
Creative individuals should definitely take a closer look at NFTs because it’s not only celebrities who can earn money from tokens. Of course, they have a higher chance of successful lot sales, but collectors evaluate artworks not only based on the fame of the artist.
In the next few years, the crypto art market will continue to grow, and one can take advantage of it to earn money. It’s not the right time to buy crypto punks now, but there are many other lots available on marketplaces that can bring profits with relatively small investments.
NFTs are an interesting option for investment. Some people manage to earn thousands of dollars by selling digital tokens. However, it’s impossible to predict in advance whether the purchased art object will be profitable or not.
NFTs can be considered one of the most significant achievements in the tech market in recent times. If interest in them had formed back in 2017, the number of transactions would have been much higher today.
What is NFT Art in simple terms?
Digital objects that exist only in digital form.
What is the most expensive NFT art?
The artwork by artist Beeple, which sold for $69.3 million.
Who buys NFT tokens?
The target audience of the NFT market consists of collectors and private investors.
How does the NFT market work?
The value of a token is determined by its owner or through an auction. Therefore, there is no average price in the market, but unique digital objects from influential figures are highly valued.
What can be turned into an NFT?
Any object that can be digitized: music, videos, GIFs.
What is the value of NFT?
The value lies in the fact that each token is unique, and it is impossible to obtain a copy of it for any amount of money.
What does an NFT token look like?
The token is like a certificate that confirms ownership rights to a digital object. In practice, it appears as a few lines of code.