Many people are curious to know how to purchase their own NFTs, or even create their own. Regardless, the term to create an NFT and sometimes purchase an NFT is generally referred to as minting.
Minting an NFT is the act of publishing your token on the blockchain. Minting can either refer to the creation process of an NFT or the purchase of an NFT on its release date. In both cases, minting is always a recorded transaction on the blockchain.
Minting an NFT might be talked about in different contexts, it really depends if you are creating an NFT, or purchasing a new NFT. Let’s talk about what minting an NFT really means.
What does minting an NFT mean?
Minting an NFT refers to publishing a unique token on the blockchain. As a creator, you mint an NFT to make it available to sell to others. As a consumer, you might actually mint an NFT from a contract, which is then revealed after you mint it. Allow me to explain the difference between the two.
Minting an NFT as a creator
Minting an NFT as a creator means that you are publishing a single, or an entire collection of NFTs onto the blockchain. From there, others will be able to purchase your NFT on your own website or on secondary marketplaces.
Minting an NFT as a consumer
Minting an NFT from a consumer standpoint means that you are buying an NFT. Some creators will make contracts that allow the consumers to mint their NFT upon purchase. Essentially allowing the consumer to become the original owner of the NFT, rather than the creator of the NFT.
In both scenarios, the NFT itself is still going through a technical process of being published to the blockchain.
Is minting the same as buying an NFT?
When you mint an NFT as a creator, you are building something completely new using smart contract technology. Minting an NFT when you buy it, on the other hand, means a contract has already been created, you are simply hitting the publish button and initiating the transfer of the NFT to your wallet.
How to mint an NFT
To mint an NFT, you need an NFT capable Web3 wallet like MetaMask, and you will also need cryptocurrency to process the transaction. The type of wallet and cryptocurrency you need ultimately depends on the blockchain you are using.
You can mint (create) your own NFT on marketplaces such as Opensea, Mintable, Rarible, and Foundation by following the steps on their site. Also, you can hire a developer to write you your own smart contract that allows consumers to mint an NFT from your own website.
To purchase your own NFT at mint, you will need to find an NFT project that hasn’t sold out yet. In general, minting an NFT as a consumer will occur on the person/brand’s own website, not a secondary marketplace like Opensea.
Should you buy an NFT at mint, or on secondary?
There is no simple answer to whether you should purchase NFTs at Mint or on the secondary market. Experts tend to advise doing a bit of both with prior research at hand. There are potential pros and cons, as well as risk factors, involved in making these decisions. As a result, it is wise to approach your decision on a case-by-case basis.
Buying at mint means you get the NFT for a set price before the market determines the value. This can save you a lot of money, and make you a big profit if done right. However, the market may determine the NFT is worthless after mint, meaning you could save money by purchasing on secondary.
Generally speaking, if an NFT is being released by a well-known person or brand that is respected, you might be better off purchasing at mint for a lower price. Likewise, if the creator is largely unknown, you could benefit from waiting to purchase on secondary to see how the market reacts to the product or service being offered.
Pros and cons of buying an NFT at mint
There are many ups and downs when it comes to buying an NFT at mint. Here are some of the main pros and cons:
- Profit from being amongst the first to buy: It can be advantageous to be among the first to mint new tokens. In fact, the earliest investors can get NFTs at the lowest possible price. As a result, you are in an excellent position to increase the return on your NFT investment.
- Gain exclusive access to DAOs and other perks of being first: Buying an NFT can give you an edge in the community aspect. For example, instances in which NFTs might provide token holders entries into the project’s DAO can culminate in investors receiving stakes in where the project might go.
- Risk of decrease in value after mint: The speculative market is one of the main reasons why minting new NFTs entails significant risk. As it happens, there is no guarantee that the value of your product will go up over time. Incidentally, you might as well face circumstances where there is a steep drop in price right after minting.
- High gas fees: There are times when the entry price could go substantially up due to increased network activity. At times, there can be too many people at once vying for a spot in the mint. As a result, it can raise the price of gas fees rapidly.
Pros and cons of buying NFTs on secondary marketplaces
Secondary marketplaces are also a popular option for people who want to invest in NFTs. Since buyers can get a peek into the demands of certain collectibles, secondary markets can also be a place of interest for investors with insights. Here is an extensive list of pros and cons of buying NFTs at secondary marketplaces.
- Record of market history: If you are a buyer looking to purchase NFTs on the secondary market, you will gain knowledge of the relevant transaction history and price changes. As a result, secondary markets allow you to evaluate how many times an individual token has changed hands. In addition, the information allows buyers to analyze when it is the right time to dive into the market.
- Decreased purchasing price: Secondary markets can be really helpful in bringing down the buyers’ overall cost of buying an NFT. Since the marketplaces allow customers to time their purchases, buyers can buy products when the network activity is relatively low. As a result, consumers can save money by only paying gas fees.
- Huge fluctuations in market price: There are instances where certain NFTs become popular overnight, resulting in a drastic price increase in the market, meaning you are stuck paying a premium to get an NFT.
- Not as great profit margins: Considering NFTs are sometimes cheapest at mint, your profit margin might be negatively affected as a result. More often than not, those who flip NFTs choose to mint multiple NFTs at the time of mint, that way they can make as much profit as possible on secondary.
Before minting NFTs or purchasing them on the secondary market, buyers must thoroughly assess their risks and investment strategies. In general, minting tends to be cheaper than buying on secondary, however, this could also bite you in the butt if you don’t do your own research before purchase.
In recent years, NFTs have become a valuable source of revenue. Creators who like to make digital art can use NFTs to reach a much wider audience than ever before. As a result, it is absolutely essential to ponder things over with the utmost consideration and sincerity before making a decision on investing in the NFTs. This goes for both creators and consumers.