NFTs: The Good, the Bad, & the Ugly

1. Let's Get Started!: [MUSIC] NFT. How do you make one? Should you make one? What are they actually? Current trend? Total scam? The future of digital art? [MUSIC] Hold up. Let's rewind. I just asked several big questions. I think the most important of those questions, however, though, and the one I want to start with is, what is an NFT actually? You may have heard things like NFTs will solve verification of ownership or they solve permanence of art. It will always be on the blockchain. They are the new way to buy and sell digital art for the future. All of these statements, while they have some truth to them, are actually quite vague and therefore misleading because they talk a lot about the art. They're focused on the art when in fact an NFT is not the art, it's not the visual that you see, the audio you hear. An NFT is simply a point to the location of those digital files. It's a chunk of data that lives on the blockchain and it's telling you where you can find those files. That's it. Knowing this now, you might also understand why buying an NFT does not just immediately give the intellectual property rights to the buyer. This only unless stated really in a contract does that happen. So you may be wondering why would anybody buy a chunk of data that just tells you where a file is? That is a big question and I'm going to answer that and a lot more in this class. Welcome to create your first NFT and why you may not want to. An empowering guide for artists and creatives. [MUSIC] Hi, I'm Claire. I'm an artist, entrepreneur, and online teacher dedicated to equipping you with the knowledge you need to use business-building tools and practices to turn your artistic passions into a fulfilling career. [MUSIC] I'm calling this an empowering guide because I fully believe in that well-known saying, knowledge is power. Instead of making a simple how-to step-by-step video, make an NFT, I want to give you a lot of unbiased information that will help you formulate your opinion about an NFT and then decide do you want to make one or not? Does it fit your brand as an artist and a creative or not? Besides walking you through the process of creating an NFT from your own artwork, I'll answer common questions, including which types of artwork you can use, what to keep in mind when creating and minting your NFT, and I'll lightly touch on how to market it to your audience. I'll also address concerns surrounding NFTs like carbon emissions and vulnerabilities as well as what you can do about them. I'll discuss why some people really hate them and why you may want to watch this space, whether you make an NFT or not. This class is for you if you're an artist or creative maker who would like to understand the basics of NFTs, how they could be used to further connect with your audience and what you should be aware of as you enter this new world of blockchain technology. This class is not for you if you already know all the basics and now want to deep dive into the details of each topic. For those of you that would like to learn even more after watching this class, I have included a PDF in the resources section filled with links to further reading. This class is also not for those just looking for a way to get rich quick or fast-track fame. As with any product an artist or creative sells, I believe the focus should be on giving value and furthering community. Support those who support you and let success come naturally. This class is the perfect foundation for starting your NFT journey. I recommend that you watch it one time all the way through so you can understand all the steps and all the things that you should have in mind if you choose to create an NFT. Then if you want to make an NFT, go back and watch the section with the steps and follow the instruction. [MUSIC] 2. What Is a NFT, Really?: [MUSIC] So what is an NFT? I briefly touched upon that at the beginning of this class, but let's break it down a little bit further. NFT, the acronym N-F-T simply stands for non-fungible token and the non-fungible ironically can just be replaced, switched out for the words not interchangeable, not replaceable, not switch-outable. You can think of this like a dollar is a dollar is a dollar, or a euro is a euro is a euro. An NFT is not an NFT is an NFT. They are not interchangeable. It would be like two houses that maybe look identical, but they are obviously in different locations. One house you might look out the window and see a beautiful lake, and the other one, you look out the window and see a trash dump. The value of the houses would not be equal even though the houses look identical. It's the same with an NFT, their value is just not the same and therefore you can't switch them out. So that's the non-fungible part. Token is because it represents the ownership of the data on the blockchain and it's in the form of a token. So a few key terms have just been introduced and I want to stop and quickly go over them to make sure everyone understands what I'm talking about when I say blockchain and token. I'm going to go ahead and throw an Etherscan to help further illustrate what those two can mean for your NFT. A blockchain can be defined as a system in which a record of transactions made in cryptocurrency are kept synchronized across several computers in a peer-to-peer network. In other words, it is a way to ensure that many different computers run by many different people in many different locations all have the same record of data. To demonstrate this in a visual way, here we can see a group of blocks. Imagine that each block contains a record of transactions and to add a new block, a majority of the computers in the network need to agree that the transactions in that block are legitimate. Once that happens, the block is added to the blockchain. This is very oversimplified for the purposes of this class, and if you would like to understand more about blockchain technology, I have included a link to further reading in the PDF in the resource section. While there are several different blockchains, the Ethereum blockchain was the first to support NFTs, is the most widely used with NFTs, and therefore is the one we will be using in this class and the one I'm referring to when I talk about the blockchain. A token can be defined as a representation of a tradable asset that resides on a blockchain and using certain identifiers of that token, for example, a wallet address, you can go to a website called Etherscan and look up all the transactions that are recorded on the blockchain associated to that token. I'll explain more about wallets in the creation portion of this class. You have now this irreplaceable token that stands for the verification of the ownership of this data. The data is not the digital files you see, but it is a point to the location of where those digital files are. When you think of an NFT, you can also think of it as a collective group. You have this, what the NFT is, the data on the blockchain and then you've got the visual or the audio that is associated to that data, and you have the metadata. So those three components make up completely what we think of and what we're talking about when we say NFT. Although the actual NFT is really just the data on the blockchain and when you buy an NFT, that's all you're buying. That's why the intellectual property rights are not just immediately given to you because you bought an NFT you don't own now the art or the audio or the video clip. You can't download it and put it on t-shirts and tote bags and things, or put it as a soundtrack to your next movie. You don't own the intellectual property rights unless otherwise actually stated in a contract by the artist. For example, when we look at the terms and conditions on the website of the NFT project Bored Ape Yacht Club, we see that they have given complete ownership of the art to the buyer of the NFT, including the right to commercial use. You may wish to define the terms and conditions for your NFTs on your own website. But depending on where you live, it may be wise to first consult a lawyer to ensure you are including all the necessary elements to make it legally valid. Another thing to be aware of with NFTs is the data of the NFT lives on the blockchain. That's because it's just data, it's very small of a size. Whereas the digital files that are associated with the NFT, although we may think of them as quite small in comparison to other files, they are just normally too big to be stored on the blockchain, so they are stored off-chain. In other words, somewhere else on the Internet other than the blockchain. Because of this, there are a few concerns that I think an artist and a creative should be aware of, and I'm going to talk about them in the next section. [MUSIC]. 3. Concerns to Be Aware Of...: [MUSIC]. During the process of creating our NFT, you will see that one of the steps involves uploading the digital file associated to the NFT to a marketplace. NFT marketplaces are simply websites where users can mint NFTs, in other words, add them to a blockchain, view the digital files the NFTs are pointing to, and buy or sell NFTs. Examples of NFT marketplaces include OpenSea, Nifty Gateway, Mintable, and many others. We will be using one called Rarible, and I will go into why during the creation process. Right now though, what is important to know is that while the NFT itself, the point is kept on a blockchain, the files it points to are normally stored off-chain. In other words, hosted somewhere on the internet, not on the blockchain. Because of this fact, they are susceptible to things like any other digital file. They could be stolen, switched out for a different file, which in the NFT world is one example of something called a rug pole, or destroyed or lost, resulting in link rot. Think of dead links and 404 error pages on websites. Theoretically, if the marketplace storing your file, or the server they have chosen to store your file on stops operating, then your file goes away, and you now own or have sold, it's potentially very expensive point to a dead link. The fact that a marketplace may not ensure the availability of your file is often mentioned in the fine print of these marketplaces. One solution to this problem is to add the files associated to your NFT, the digital file of your art and the metadata file to another location other than just view the marketplace where you minted your NFT. In other words, have your files available online in more than just one location. When very popular location is the storage provider, IPFS, or interplanetary file system. The IPFS is a decentralized protocol, meaning it doesn't have just one server and one location for storing and sharing data. Rarible actually uses the IPFS to store the files you upload to its marketplace on its own node in the IPFS network. You can think of a node as a server. When a file is uploaded to the IPFS, a content identifier abbreviated CID, is generated and associated with that file. The CID is important because it is a combination of numbers and letters that uniquely identifies the content of a file, and therefore helps to validate the authenticity of that file. In the PDF in the resource section, a couple of articles are linked with step-by-step instructions to find the CID assigned to your NFTs associated files from when Rarible added them to the IPFS. With the CID, you can add those files to the IPFS again, using opinion service website like Pinata, or you could upload your data to the site NFT.Storage before maintaining your NFT, and include the CID in the form of a URL in the metadata section when creating your NFT. The URL will look something like this. I have linked all these websites in the PDF as well. Now either way, your files exist in more than one location on the internet, and you have added an extra layer of insurance to the availability of your NFTs digital file and metadata. Whether or not you want to do this is up to you, but keep in mind it is a possible selling point when marketing your NFT. A common topic of concern for artists and creative makers is copyright infringement. Unfortunately with NFT's, this is no exception. The art you've already posted online could be uploaded to an NFT marketplace by someone else without your permission and minted into a NFT. Indeed, this has happened to artists before. As you will see when we create our NFT, very little, if anything really is done to verify that I am in fact the creator, or at least the owner of the artwork I'm about to mint. Platforms like SuperRare aim to do a better job with this, and it's one of the reasons it's invite only. However, in general, this seems like a huge flaw in the marketplace. A few things you can do to protect yourself and your artwork are always remember to sign or watermark your art. Upload your files in a lower resolution when posting to social media. If you have a website, add a Terms and Conditions page, and a copyright statement and the footer. Even go so far as to physically register your work with your local Copyright Office. If you use Photoshop to create your artwork, you may also be interested in their feature called Content Credentials, which collects and adds digital provenance to your art which is then attached to the final file when exported it. We will go over art provenance a bit more in the next section. To enable Content Credentials, simply open Photoshop and go to preferences, technology previews, and check the box next to enable Content Credentials, click "Okay, " and restart the application. I've included a few links with more information on this feature in the PDF posted in the resources section below. With both the vulnerability and copyright issues in mind, the often purported idea that NFTs in their current state solve issues of digital art permanent and immutability, verification of ownership and copyright issues, is simply not true. However, since all of this technology is still in its infancy, maybe I should say not true yet. But until then I think all of this is important for you as a creative to be aware of, even if you decide not to create NFTs yourself. Now let's address one of the main criticisms and concerns of NFTs. The negative impact NFTs have on the environment. You may have heard people say, buy NFTs, they're horrible for the environment, how could someone ever make one? You may be wondering, how is this possible? It's a digital thing, what does this even mean? Well, currently the Ethereum blockchain uses a consensus mechanism called proof-of-work. A consensus mechanism is basically a way to come to an agreement and in this case, a way for computers in a decentralized network to agree that the next block about to be added to the blockchain is legitimate. You may remember the visual from the what is a NFT section of this class. With proof-of-work basically, a lot of redundant and unnecessary work is done to achieve this consensus, and it takes a lot of energy to power all of this work, which results in a lot of carbon emissions, and that's what people are referring to when they say NFT's are bad for the environment. I think it is worth mentioning that sometime in the second quarter of 2022, Ethereum should be switching to a consensus mechanism called proof-of-stake which promises to eliminate the redundant work discussed earlier, and consequently the carbon emissions that come with it. I've heard estimates ranging from 90-99 percent elimination. It may simply be a matter of waiting for the switch to proof-of-stake before maintain your NFT. But if you would rather not wait in the meantime, there are several websites and apps that help you offset your carbon footprint by donating to verify to environmental projects like bio-oil and forest conservation. One such app Aerial even allows you to know and offset the carbon emissions directly associated with your NFT project. You can also do so directly in Rarible by clicking the "Remove Carbon" button in the Details tab of your Ethereum-based NFT, and following the instructions. When we create our NFT, we will use a method called lazy minting which does not result in any carbon emissions until the NFT is purchased. I will go over this more during the creation process. [MUSIC]. 4. Class Project: [MUSIC] As this class is more of an empowering guide rather than a simple how-to, and you may choose to make an NFT and you may choose not to. You have a choice between three possible options to complete the class project. A, follow the steps to create your first NFT and then share it here in the project section by clicking the Create project button. B, share a website or app you like for offsetting carbon emissions in the discussion section. Or C, do both. I look forward to seeing your class projects. 5. Four Reasons to Create a NFT: [MUSIC] Now that we've looked into some of the concerns surrounding NFTs, you may be questioning why anyone would choose to make one. I think there are several reasons, so let's go into them. The first reason might be that you're a digital artist, and would like to stay informed about what is going on in Web3 and where the future of digital art seems to be heading in general, since the technology behind NFTs and the implementation of NFTs themselves is all still so new and in its infancy, no one can definitively say exactly what it will look like or be used for in the future. The site async.art even talks about using NFTs as a way to create changeable, livable art. As a digital artist, you may find this all very exciting and just want to be a part of it and understand what is going on, and then, in that case, learning how to make a NFT may just be a first step into that whole world. As an artist, I like to keep up to date about the art world in general. That's why I was interested and wanted to learn about NFTs. If you're a digital artist, perhaps this applies even more. Besides being a digital artist, if specifically, you're a character artist, FX animator, or in some way interested in creating environments, skins, and or accessories for online games, you may wish to learn about creating NFTs as a career, since they are quite big in online gaming. One example of this is Blankos Block Party, where the characters themselves are associated to their own NFT, and players not only play with the character but actually own them. The company who created the game has a section on their website where they are looking for artists to work with. I think NFTs, especially in the gaming world, could simply be a career path that an artist may wish to take. If you know how to make a NFT, and you're learning all about them, that would just be your first step on that path. Whether as a career or not, or even whether you want to sell your NFTs or not, another reason an artist may want to create NFTs would be to add a form of digital art provenance to their artwork. I mentioned art provenance earlier when we learned about Photoshop's feature content credentials. But to explain it a bit further in the physical world, our provenance or simply the history of the art where it came from, as well as a record of ownership, has traditionally been shown through an artist's signature on the art, a certificate of authenticity, photographs of the artwork being created, perhaps newspaper articles mentioning the art was sold, etc. It's a bit harder to show and prove provenance with digital art, and that's where NFTs may come in. Since all of the data of an NFT, like who minted it and when, who owns it now, etc, is on the blockchain and available for anyone to see via Etherscan and the NFT points to a digital file, in this case, your artwork. Anyone can see when you first uploaded your art and can verify it was your unique ID that did so. Therefore, you now have a bit of digital provenance for your artwork. We still run into the problem that arises if someone other than the artist uploads and mints artwork that doesn't belong to them. But as we all know, sadly, plagiarism can happen with physical art as well and unfortunately in their current state, NFTs are no different. Lastly, another reason you may wish to make NFTs is simply as another source of income and even passive income if you add the possibility to collect royalties, which we will learn about during the creation process. In the same way, you may have considered offering physical products with your artwork on them via print on demand or in an actual store, or prints and digital downloads in an online shop, you may consider selling NFTs pointing to your artwork. You may ask yourself if NFTs fit in with the art you make, your brand as an artist or creative, and the audience you have already grown. Would your audience be interested in purchasing NFTs from you or if you told them about NFTs and explain them, would they then be interested? If the answer is yes, then it might just be another way for you to earn a little extra income as an artist. [MUSIC] 6. Why Would Someone Buy a NFT?: [MUSIC] Now that we've discussed a few reasons to create an NFT, I think it's important to look into a few reasons someone might buy an NFT. You may remember at the beginning of this class, I promised to tell you why someone might buy a point to a digital file's location. Well, I'm going to answer that right now and I'm going to tell you before we make NFT because understanding these reasons may influence the creation process of the artwork you end up assigning to your NFT. One reason and the most often seen and talked about is status. I think we can go even further and divide what I mean by status into two types. The one type is similar to when a person buys and wears band merch, like a shirt or hoodie or they hang a cult classic movie poster on their wall. Seeing these things on a person or in their home lets you know they not only know about that band or movie, etc, but in some way identify with it. The same goes for NFTs. One One people buy them is as a way to visually show they know about support and belong to the NFT community. This is especially true with PFP or profile picture NFTs, which are one of the most popular type of NFTs and the ones you may have seen on Twitter accounts and perhaps one day on Instagram profiles as well. I think this goes towards explaining the last thing excitement around crypto pumps and why owning one is considered so valuable. Widely regarded as the first true NFT project, only one really makes a statement about being a day one fan and believing in the future of NFTs because you own a part of their history. Somebody even argue digital arts history, which brings us to the second type of status, which is associated with the type of showing off, like driving an expensive car, wearing expensive clothes with the brand labeled prominently displayed, or being able to say something like, I own a piece of digital arts history. Some people buy very expensive NFTs as a way to display their immense wealth and luxury lifestyle. Simple as that. You may pause here and say, yeah, but wait, they bought a point, not an artwork ansd even if the rights to the artwork work even to the buyer so they do own it, anyone can simply right-click and save a copy to their desktop. I've heard the explanation of why someone would still value owning the original digital file or link to the original file in two ways. First, let's say they own the original file. In the way someone who owns a very famous and expensive piece of physical artwork might lend it to a museum, and while on display in the museum, anyone can see it and take a photo of it if allowed, or at least buy a mini print in the gift shop. Only the lender actually owns the original artwork and that brings with it a bit of status. Although I think this analogy is a bit flat since a print of a painting is a no way the same as the painting itself whereas two digital files of the same content are pretty indistinguishable, it seems to get pretty close to explaining the sentiment. As for owning just the point, imagine a famous person sends you via text a picture of them having brunch at their favorite restaurant. The picture most likely isn't really the big deal. For sure, paparazzi have very similar images and it may even be on that person's Instagram feed. But the fact that this famous person sent it directly to you and you know where to find the original picture would certainly be worth the mention to your friends at your own branch. In that way, knowing where the original file is and owning that information can be viewed as rewarding. Perhaps these analogies help to explain the logic behind owning an expensive NFT and the status doing so can bring. Another reason someone might buy NFT expensive or not, whether they actually like or care about the file associated to it or not, is simply because they believe it will be worth more later. In other words, they view the purchase as an investment. This is far less emotional on a personal level than the status reason and flipping NFTs or buying low and selling high is even a wealth acquiring strategy within the NFT community itself. While they believe the NFT is an investment worth purchasing has a lot to do with the marketing of the project, the people involved, and their relation to other successful projects. Having mentioned now two reasons that revolve around money, I think this is a good time to pause and talk about why some people think NFTs in their current state are a scam. For beginners' class, you may wonder why you should know all of this, but I think it is really important to be aware of the good and the bad that circulates around NFTs so that if or when you implement them in your own business, you're not left wondering why some people form a negative opinion of you or react negatively based on your involvement with LFTs. It is also simply part of the equation and figuring out if NFTs are for you or not [MUSIC]. The idea that a digital artwork is an investment actually worth a six, seven, or even eight price tag is debatable. Even more so when a person realizes that what they've actually bought is not the artwork, but I point to the location of that artwork unless stated otherwise by the artist, but you know that very well by now. One concept that often comes up in this debate is the Greater Fool Theory, which is when an investor buys questionably price securities without much, if any, regard to their quality, hoping to be able to sell them off to another "Greater Fool", and the next "Fool" buys it for the same reason, resulting in an over-inflated price tag attached to an item that although having some interesting value, cannot explain or live up to such an amount, and eventually, it all comes crashing down. An example of this can be seen in the Tulip Mania of the 17th century in Holland, where people were actually trading their life savings for a single tulip bob. This occurrence is said to be the first time in history when the Greater Fool Theory was experimented with end. It didn't end well. NFTs and the hype culture surrounding them sometimes give off a real Tulip Mania vibe. Enthusiasts use their own lingo like WAGMI, we're all going to make it, meaning they're all going to make a lot of money. Diamond Hands, a term of endearment for a person who has high-risk tolerance for high volatility assets. In other words, praise for being someone who would participate no matter if the market was unstable and IYKYK, if you know, you know, implying some secret knowledge that not everyone is privy to. Or what I'm doing right now by discussing possible negatives, this would be considered spreading FUD, fear, uncertainty, and doubt and is very frowned upon. All of this builds an environment buzzing off of greed, the idea of becoming extremely wealthy without truly providing value and it sounds a little too familiar whether NFTs or another version of the Greater Fool Theory experiment is yet to be seen, but it is certainly something to be aware of when taking part in this digital space and listening to people talk about NFTs as an investment opportunity. Earlier when I mentioned that some may choose to make NFTs as a form of income and I said a little extra income, that wording was chosen on purpose. Another reason NFTs and the hype surrounding them can be viewed as scare me is because often huge sales numbers in the hundreds of thousands, if not millions are thrown around and the idea that you could be the next millionaire simply by creating and selling NFTs with your artwork and this beautiful image of an artist living off of royalties for years and years to come is often given by NFT supporters as the reason they love them and want to encourage artists like you and me to get involved. But when researchers looked at the numbers, these ideas just don't seem to have actual data to back them up. One study published via the scientific journal nature stated at the time of their study, the top 10 percent of traders performed 85 percent of all transactions. In other words, 85 percent of all NFT transactions were done by only 10 percent of the people creating, owning, and selling NFTs. In another article posted on art net news, a website with news concerning the international art market, the headline states that most NFTs sales at the time were for $200 or less. That is a far cry from the eye-catching numbers thrown around during the same time period. As the market fluctuates constantly when looking for the most current and probable numbers of sales and earnings, it is important to look at medians rather than averages as one very large number can throw an average in a very misleading direction. With these two points in mind, I encourage you to keep both your expectations and your prices reasonable. Again, if you choose to make them, look at entities as simply another product you offer and make sure to surround them with value for your buyers. This brings us to a much happier topic and the third reason why someone might buy or NFT, which is for unlockable content. Unlockable content is basically bonus content that only becomes available to someone when they purchase the NFT. A common example of this is a link to a high-resolution file of the NFTs associated artwork. Other examples include a discount code for your online shop and access code to an online event like a workshop, private Facebook group, or a live Q&A, an actual message telling the buyer the story of the art, a bit more about you as an artist or thanking them for their purchase, links to your website and maybe even a private page with freebies they can download or a space to add their address so you can send them a physical print of the artwork. Or to go back to art provenance, you could include a link for them to download a certificate of authenticity. Unlockable content is a great way to infuse creativity into your NFT product, offer value, foster connection, and create a fun overall experience for your buyer. I will give you some more examples during the creation process in the next section. Just like someone may buy NFT because they believe the project is an investment, someone may buy your NFT simply because they believe you as an artist or an investment. Forget Diamond Hands, this is total heart eyes. You may have heard of websites where people can help financially support an artist in exchange for little perks and surprises while buying your NFTs can also be a way someone shows you their support and that they just want you to keep making your art, try new things, and growing as an artist. This is probably the most heartwarming reason someone might buy your NFT and a sure-fire way to know you're doing a great job providing value and building a truly authentic and dedicated audience. Now that we've covered all these important topics to help you decide whether NFTs fit your artwork in business as a creative, let's see how you could go about making one if you choose to do so [MUSIC]. 7. Artwork: [MUSIC] You want to make an NFT. Well, the first step in NFT creation is, of course, creating the artwork you're going to associate with your NFT. Since the end result needs to be a digital file you can upload to a marketplace, you may think you need to limit yourself to creating the art in a digital format to begin with, but you actually don't need to. There are many examples of art being created in a more traditional tangible way that are then converted into a digital file for uploading. Take for example, Gustav Klimt's painting, The Kiss. This famous artwork was digitized and broken down into 10,000 tiles that were then sold as NFTs. Another example is the NFT project, #boiz, a series of uniquely sculpted collectible avatars created by the artist, Lirona. You can technically attach any digital file to your NFT, including video clips, music files, memes, gifts, even tweets. But if you use a marketplace to mint your NFT, as we will later in this tutorial, you'll be limited to their supported formats. Keep that in mind, when deciding what you want to create. However, no matter what medium you use to create your artwork or what type of digital file you end up uploading, it is vital for the success of your project to keep your audience in mind, when thinking of the art you eventually turn into a NFT, and then sell to them. For example, if you're an illustrator, and you keep selling out of a particular print, you may choose to create a similar print, but only make it available as an NFT. This would be very similar, if you're a painter or a photographer. Think of taking one of your top selling artworks and turning it into a mini-series, where the second part of the series is a NFT. Speaking of series, when deciding what your NFT project will be, you'll also want to decide whether it will consist of a single artwork, multiple additions of the same artwork, or a series like trading cards, where you encourage your audience to collect them all. Keeping your audience in mind will also make it much easier to come up with ideas for the unlockable content you learned about earlier. When you're done digitizing your artwork, you could export two files, one low resolution file for uploading to the marketplace, this will be the artwork everyone sees, and one high resolution file that is given as unlockable content and only available to the buyer. This also goes towards helping to retain the value and owning or having access to the original, since anyone who right-clicks to save the visual will have a file with less quality than the actual buyer of your NFT. To go back to our Illustrator, an example of unlockable content they may want to include would be a link to a secret page of their web shop, where the buyer of their NFT could download a digital file of the print or enter their address to have an actual print mailed to them. Let's say the print was of the artist's super cute puppy. Another idea for unlockable content would be to include a link to a GIF of the puppy plane or a photo of the puppy in real life. This builds a narrative or story around the NFT and fosters connection between the buyer and the artist. If you're a fashion designer and you sell clothes or bags, you may want to turn one of your patterns or swatches into a NFT, or commission an illustration of your creations and use that. This actually brings up a very important aspect of NFT creation that I hope is obvious or perhaps needs to be said, only use artwork or audio you created yourself or have the rights to use and make a NFT out of. On the topic of copyright, you may remember that just because someone buys your NFT, they do not automatically get the intellectual property rights of the art associated with the NFT, unless you, as the creator, explicitly say so in a contract. All they have the right to do is sell, trade, or transfer the NFT on the blockchain. They cannot mint a copy of the NFT, sell any derivative object incorporating the NFT, or exploit the NFT in any commercial way, unless you allow them to do so. To keep things clear for your buyers, if you have a website or social media account that gives you a space to post more permanent information, I would suggest creating a section with your terms and conditions for your NFTs. Like we saw in the example from the website of board Ape Yacht Club, and including a link to that as unlockable content, as well as telling potential buyers where they can find this information upfront. Overall, when deciding what unlockable content you want to include, consider how you would make it available to not only the first person to buy your NFT, but also any subsequent buyers. For example, if you're a painter or a photographer, and the unlockable content was the option to send you their home address, and you would mail the original artwork to them. This won't work a second time, of course. You might want to include other unlockable content, in case the buyer resells the NFT. Having picked the medium for creating the art and the type of file you want to upload, video image or audio, you've created your art and the accompanying files or web pages you'll link to as unlockable content. Then now is the time to think about whether you will add your files to the IPFS yourself, like we discussed in the concerns section of this class. If you decide to do so, and you choose to use the option with the NFT storage website, you will need the CID URL to post in the metadata section during the creation process, so get that handy as well. But before we can get to the marketplace and upload our file, we need to set up a wallet and learn a little bit about them. [MUSIC] 8. Wallets: [MUSIC] In general, crypto wallets can be divided into two categories, a hot wallet or a cold wallet. The difference between the two is that a hot wallet is connected to the Internet and ready for use by simply signing in and connecting to a website. You can think of it a bit like your online bank account. Whereas a cold wallet is offline and therefore it keeps whatever assets are on it safe from malicious digital attack. If a hot wallet is similar to your bank account then a cold wallet is similar to your actual physical wallet. We will be creating a hot wallet as we need to connect it to the Rarible site for creating our NFT. But if you are really getting into NFTs and start owning and creating many of them, you may wish to get a cold wallet as well in order to safely store them offline. I have linked to some options in the PDF in the resource section. Before NFT is actually minted or added to the blockchain, someone has to pay for that process in the form of what is called gas fee. Since we are adding our NFT to the Ethereum blockchain, this fee would be paid in the cryptocurrency called Eth or Ether. However, we will be using Rarible's free-minting option, also known as lazy minting, which means the NFT is minted, not at the moment of creation, but at the moment of purchase. This also means that the gas fee is paid by the buyer so keep that in mind when pricing your NFT. Only after they do so is that NFT actually added to the blockchain. Until then all the data is stored on the IPFS and your NFT is viewable in the Rarible marketplace but not on Etherscan. I think this free option is helpful for beginners as it keeps you from paying fees or creating and hopefully offsetting carbon emissions for NFTs that don't sell. This is a good time to note though, that if at some point you decide to delete or burn your lazy minting NFT, you will still have to pay fees associated with that action, just like with regular actually minted NFTs. Since we won't be paying gas fees to create our NFT and therefore, don't need to add any Eth to our wallet and assuming you don't have any other crypto assets like cryptocurrency or other NFTs, you may be wondering why you need a wallet at all. That is a very good question. Besides being decentralized, the blockchain is also anonymous. People are only identifiable by their wallet addresses. Just like in your physical wallet you probably have some form of ID, your wallet address acts as your digital ID. When an NFT is added to the blockchain, instead of saying this NFT was created by insert your name or social media handle, it will say a wallet address and your NFT will be assigned to your wallet address. If the NFT you create is sold, it will then be minted, assigned to your hot wallet, and then automatically be sent to the wallet of whoever bought the NFT. All of this will be recorded on the blockchain and available to be seen on Etherscan. If you didn't have a wallet then the NFT would have nowhere to be assigned to. Now that we know what a crypto wallet is and why you need one, let's set one up. The first step of setting up a wallet is choosing one. This is just a small selection and there are actually many wallets to choose from. You can see even more if you visit walletconnect.com, click on Registry and then Wallets. In this tutorial, however, I will show you how to set up a MetaMask wallet. We are using MetaMask because it has a super easy setup, connects easily via a plug-in for the Chrome web browser, and it's one of the more popular wallets for NFTs. Let's get started. You can either click on the MetaMask tab on WalletConnect or type in the URL, metamask.io directly to get to that homepage. When there, click the button "Download now." Choose whether you want to install it on your web browser, iPhone or Android. We're going to install it on a web browser. They offer a few supported browsers and we're going to use Chrome. Click the button, "Install MetaMask for Chrome." Then the button "Add to Chrome," click "Add extension." Here we are on the welcome page, welcome to MetaMask. Click the button "Get Started." Yes, we are new so let's click "Create a Wallet' "type in a password, confirm the password, read the terms of use, then click the check mark, and finally click "Create." Let's add some extra security. Watch the mini video all about security recovery phrases then click "Next." Now you're on a page with your own personal secret recovery phrase. Click to reveal the words and save them however you want. But don't share your recovery phrase with anyone and make sure whenever and however you save it, it is secure and you will be able to find it again if needed. Once you've done that click "Next." You will get a page to confirm your secret recovery phrase so do so in the order they were given and then click "Confirm." I'm not showing my page for obvious reasons. Congratulations, you now have a secret recovery phrase associated with your wallet. Read some tips on storing it safely and click "All Done." You now have a wallet. Your wallet address is at the top. If you click on the circle, you can see where to connect it to a hard wallet, get support or add another account. If you click Lock, that will log you out. When you check your browser, you can see the MetaMask extension. If you click on it, a window pops up for you to put in your password and log back in. Now let's connect to the Rarible wearable marketplace and setup our NFT. [MUSIC] 9. Marketplace : As I previously mentioned, we will be using the marketplace Rarible to create our NFT. There are a lot of marketplaces to choose from and finding your favorite is a bit like having your favorite brand of chips. They're all rather similar, but there will be just something about one that makes you favor it over the others. It's up to you to find your favorite but for the purposes of this class, we're going to use Rarible and that's because, besides being well-known and widely used, they offer lazy minting, buyers can use a credit card to purchase fixed price NFTs, and they offer multi-chain minting, which means you may not need to learn a whole new platform if you start making NFTs on other blockchains. Rarible is also compatible with Photoshop's feature, Content Credentials. With all this in mind, let's get started. If at any point you would like to hear something slower, you can do so by clicking the 1X icon next to the Play button and selecting a slower playback speed. In your web browser, type in rarible.com to get to the marketplace homepage. When there, click "Sign in". We made a MetaMask wallet so we're going to click the button "Sign-in with MetaMask". The MetaMask window will pop up. Enter your password and click "Unlock". Select the account you want to use, in our case, there should just be one, and click "Next". Then click "Connect". A little reminder to never share your secret recovery phrase will pop up, read that and click "Got it". Now back on the Rarible homepage, click the button "Create". We want our NFT to be added to the Ethereum blockchain when it's minted, so click "Ethereum". Choose whether you want to sell a single version of your NFT or if you will offer multiple additions. For this tutorial, we're going to make a single addition so click "Single". We have already chosen our wallet and connected it so you should see the wallet address and the green "Connected" symbol here. Next, we need to upload our file, paying attention to the permitted file types. If you made two versions of your file, upload the lower resolution file here and save the higher resolution file for your unlockable content. To do so, click "Choose File", select your artwork, and click "Open". Now we see our artwork has been uploaded and how it will look in the preview window. Next, make sure the "Put on marketplace" is toggled on and select how you want the price to be displayed, fixed price, open for bids, or timed auction. Remember, if you set a fixed price for your NFT, buyers can use a credit card to purchase and won't need to deal with adding cryptocurrency to their wallet, which might be a selling point for your audience and something to keep in mind when deciding which of these options is right for you. We're going to set a fixed price. The price of your NFT will be shown in ETH, but a convenient conversion is shown below so you know how much you're charging in US dollars at the time of creating your NFT. You can also see that you'll be charged a 2.5 percent service fee, so keep that in mind. Set your price and then toggle the "Unlock once purchased" section on. This is your unlockable content. Here's where you can add the link to the higher resolution file and or whatever you created as unlockable content for your buyer. Next, choose the collection. We're going to choose the Rarible default collection since right now, lazy minting is only offered for these collections. Next, we see the free minting section. This is the lazy minting option and means that the buyer will pay the associated gas fee and that your NFT will only be minted once purchased, so make sure that this is toggled on. Then add the name of your NFT and a short description if you want. Next, we can set the percentage we would like to get as royalties on any secondary purchases. If you click "Show advanced settings", you can add some metadata to your NFT like size, date of creation, the program you used, et cetera. You can also add voice-over text in the "Alternative text for NFT" section. Once you have everything filled in how you'd like, click "Create item". A window with the next steps will pop up and a blue check will appear as each step is completed. You will need to approve some authorizations from your MetaMask wallet, so log in again in the window provided, and click "Sign". You may need to do this more than once. Then, ta-da! Your NFT is now available in the Rarible marketplace. Click "View NFT" to see the listing. Here you can see all the information you added to your NFT during creation, including a "Remove from sale" button and a button to share your listing. If you sign out of Rarible, you can see how your listing looks for everyone else, that the unlockable content is locked and that the buttons have changed to allow someone to purchase or bid on your NFT. Don't forget to disconnect your wallet from Rarible and log out of MetaMask. Hooray! Your NFT is online and available for purchase. Remember to get the shareable link so you can post it in your class project for everyone to see. Now that you have one NFT for sale on the Rarible marketplace, you may wish to look into getting verified. Verification provides extra visibility on the marketplace, as currently, non-verified items do not appear in search results or the Explore feed. There's a link to the verification process in the resource PDF. If your NFT sells, you should get notified and can transfer your money from your MetaMask wallet to your online bank account using a cryptocurrency exchange. There is a link to the instructions for this as well in the PDF in the resource section. If for any reason you decide you don't want to offer your NFT anymore, simply click the "Remove from sale" button, pay the associated fee, and your NFT will be removed. [MUSIC] 10. Two Ways to Market Your NFT: [MUSIC] Now you've made your NFT and no doubt you'd like to get it out there, market it, and hopefully sell it. You may be wondering what is a good way to do so. Well, I think it is best to do two things; communicate and educate. Communicate to your audience why you made this particular artwork you are associating with your NFT. What is the story behind it and why are you offering it to them? What value does it give them? This is where your unlockable content would really shine. Some ideas would be to post on social media like TikTok, Instagram, Facebook, or any of the other platforms you may be using and show the process and story behind your NFT and how you made it. For example, show them pictures or videos of you painting it or drawing it in Procreate, share the notes and doodles you made when conceptualizing it. The tools you used to sculpt it, bring them into the process and show them the behind the scenes and do so in the way you would normally communicate with them. In other words, create an Onbrand artist experience. Then communicate the value they will get from buying your NFT. Not only is their art attached that they can enjoy looking at or listening to, but perhaps they can interact with it. Maybe some of the unlockable content that you had was a pass to your next online workshop or a private Facebook group or a Q&A with you, only available to people holding one of your NFTs. This is the time to tell your audience all of these things. To build a sense of excitement around your NFT, you could even create a timer that counts down to the launch day when it will be available for purchase or when you'll be sharing the link to the listing on Rarible. Create a sense of rarity or urgency by telling them it will be a OneOf one NFT or part of a limited edition or a series like trading cards or a collection and if it's an auction or just a flat price. If you listed it at a flat price, remember to tell them they won't even need cryptocurrency to purchase and could use a credit card because your NFT is through Rarible. The second thing I think is really important for an artist to do, especially if you are new to NFTs and haven't offered them before, is educate your audience. NFTs are still quite new, they've been around for a few years now, but there are still many people who don't know about them or fully understand them or what they are or the value they have, or why they would maybe want one. If you think that your audience is open to this idea and I hope you did that before you decided to make one and offer it to them, it could still be valuable and important for you to tell them your thoughts on NFTs. Teach them a bit about them and how they fit into your brand or business while you're offering them to your audience and what rights they get when purchasing. In other words, share your excitement about NFTs and help get them excited too. I think it's also quite important to explain this whole concept of taking care of the files we touched upon earlier in this class. Especially if you give away the intellectual property rights of the associated artwork. To illustrate this, let's first look at a more traditional product offering. Let's say for example, you sell art prints. Once someone buys it, it becomes their responsibility to take care of it perhaps put it in a picture frame, for example. If they spill coffee on it, that's it, it's damaged. You as the artist are not responsible to send them another print. It is the same with the digital files associated with your NFT. Even though they're digital and things get blurry and people may assume you, the artists are responsible for always having them online, this isn't actually true because you've sold them. Even if you only sold the point and personal use of the associated files. I think it's really important to communicate to your audience before any of them by one of your NFTs and once they buy one, the responsibility of maintaining the files transfers to them. Unless of course you are happy to maintain them and keep that responsibility for yourself. If you are transferring responsibility, make sure to share the links in the resources PDF and tell or show them how you backed up the files using the IPFS, NFT.Storage or Pinata. Whatever you decide, you can share this with your audience by adding all of this information to your terms and conditions and telling your audience via your social media posts, blog articles, etc, to read your terms and conditions before purchasing. Overall, whether communicating or educating, remember to have fun and be creative. Showing your passion for NFTs encourages your audience to get excited and passionate as well and it helps to ensure an overall better experience for everyone. [MUSIC] 11. What to Do Next!: [NOISE] Congratulations, you've finished the class. This is the part where you decide whether NFTs fit with your brand and business or not. For those of you who would like to learn even more about the topics covered in this class, I have included four pages of links in the PDF in the resources section below to hopefully save you hours of researching. Make sure to check it out. I look at each student project and answer each question I get so don't forget to upload your choice for your class project and post any questions you may have in the discussion section. If you enjoyed this class, make sure to hit that follow button so you're notified when I post a new class. Leave me a review and let me know your favorite part. It may not seem like a lot, but it really encourages me as a teacher. Thank you so much for watching and I hope to see you in my next class. [MUSIC]