Who is making NFTs? Where are they coming from?

July 30, 2021 11:07 PM

A lot of the cryptocurrency world I do not understand, but who is creating NFTs? Is there a subculture out there in Discord or hedge funds or some other group that controls this? I realize that the answer is an ephemeral "anyone" but Goldman and others sold Michael Burry CDSes and not me. I'm not asking about how the technology works, but if I asked how I start a venture capital firm the answer would probably be something like: have or make a lot of money in finance or technology, have deep connections and a good network in what you want to invest, be lucky.

The media seems to focus on the big pieces sold by auction houses or how memes and gifs seem to go for six figures or even five figures. I've seen enough art auctions to know that the how-did-they-sell-that factor for art is incredibly dependent on things besides who you are: did you show at the right galleries, get lucky, get noticed by the right people, were deemed cool by the right people, and a host of other factors that largely create an in-group. That's a bit of exaggeration but no one seems to talk about the culture around this except the gee-whiz factor and it is a bit annoying. It could be the reporters don't know or it is so heavy in Internet culture they aren't getting it.

posted by geoff. to Computers & Internet (10 answers total)

I think that for notable NFTs, you start with something viral. Here's one that started as a YouTube video with 800 million + views.

Making an NFT without (pre-existing) hype is unlikely to gain traction (and therefore likely to be worth less than the transaction fees.)
posted by krisjohn at 5:04 AM on July 31, 2021

I’m honestly not exactly sure what the question is here. There’s two sides to an NFT. The digital media it’s based on which could be anything and is owned by the copyright holder so for example Beeple owned the copy rights to the digital art he created. The artist or rights owner then can generate the NFT with the piece of media attached and it becomes part of whatever chain (usually Etheruem) is being used. They can do this themselves but there a few services that ease this process.

So the most basic answer to your question is the copyright holder to the content (it doesn’t have to be “media”) is creating the NFT though sometimes with some sort of marketplace as an intermediary.
posted by bitdamaged at 7:04 AM on July 31, 2021 [1 favorite]

Best answer: I’m also not quite clear what you’re asking, or what the answer is other than “anyone”. Is there some more specific angle that you’re getting at which hasn’t quite come through in your question?

Fwiw, a friend who makes (physical) art (on paper) using pen plotters has also made some NFTs using similar techniques but, obviously, as digital images. He’s just a guy who makes art, not part of some conspiracy.

I’m sure there are discords, and there are loads of people on Twitter who talk about and promote NFTs, but… you can say that for any topic really.
posted by fabius at 7:10 AM on July 31, 2021 [2 favorites]

Best answer: Just a small correction to this:

The artist or rights owner then can generate the NFT with the piece of media attached

There are no legal or technical restrictions preventing anyone from generating an NFT for any work whether or not they own the rights, or even if the exact same item has already been "sold" as an NFT. A few people have been called out for selling NFTs to work they don't own, but that's not illegal and likely in most cases they'd never get caught anyway.

Nothing is attached to the NFT, there's just a link to the media or other content to say "this is what the NFT is about". There have already been cases where the link has gone bad after the NFT has been sold, and the content is no longer there.

It's likely that most people who are successfully selling NFTs are taking advantage of existing fame and connections, as an artist, public figure, influencer, etc. Many more people are attempting to sell NFTs. So it's not that different from the physical art market, except the buyer receives an entry in a distributed ledger rather than an actual object or digital file.*

* Often the buyer does receive a digital file from the artist or previous owner, but this is just a courtesy and not technically part of the NFT sale.
posted by moonmilk at 8:01 AM on July 31, 2021 [3 favorites]

I think others covered this, but there's no real cost to creating an NFT -- unlike starting a hedge fund, you don't need a huge amount of resources to do it, you don't need to spend or even use mountains of crypto tokens to create an NFT. I could create an NFT of an audio recording of a fart, no big deal. The important bit however, is that no one would care about my audio recording of a fart, so it would be worthless.

So how to create a valuable NFT? Have a valuable thing, and then create an NFT of it. Or get lucky and hope the internet goes nuts over an audio recording of a fart, driving the price sky high for the sheer absurdity of it.

(NFTs are really dumb, for the record.)
posted by so fucking future at 10:19 AM on July 31, 2021 [1 favorite]

Response by poster: The question I guess was sort of akin to asking how to lifestyle companies like Supreme get popular. And there's no good answer. NFTs are the more expensive equivalent to buying a $500 hat. I thought perhaps there was a more centralized cabal for lack of a better phrase that were the tastemakers or sort of drove it. Or why people collect coins and don't collect old pencils. This just seems to be the modern day Beanie Babies. There's just a pseudo-financial instrument vibe to this and also people trying desperately to explain how this is like buying an original Monet.

So I was having a difficult time trying to ask this question but so would I have asking why do people line up for blocks to buy a cigarette lighter with the word Supreme on it. Or how to become a content influencer. There might not be a good answer.
posted by geoff. at 11:59 AM on July 31, 2021

Here is an example video which will talk you through how to create and try to sell an NFT. Briefly then:
1. Make your artwork (in this case, a piece of slow-mo film rendered as a gif).
2. Create a wallet to hold your funds - in this case Ehereum funds with a Coinbase wallet.
3. Choose a user name: this can be important for marketing your lovely art.
4. Back up your wallet - and don't loose the key words that are generated here.
5. Buy some ETH (Either) currency: this is so you can use your finds to cover the setling costs for your EFT. In this case we use CoinBase to buy the currency using a debit card, Paypal, etc. Coinbase will charge you about 3% for this.
6. Send some/all of the money you have bought to your Coinbase wallet. There will be a network fee to cover for this transaction.
7. Now we need somewhere for the art. He recommends OpenSea.io - sign in to this using your wallet.
8. Create your collection - giving it a logo and a name. Upload your lovely art - and give that a name and a description.. Click "Create". You are now the owner of an artwork with an associated NFT. Congrats! (Note that if your artwork is not uploadable - or if there are some other details you want to provide - then you can add all this here).
9. If you want to go on to sell your NFT for $$$ then you can share the link to this item to promote it to the world. If you are willing to part with the NFT then you can choose to sell it at a set price, for the highest bid or as part of a bundle with other NFTs. Let's say you choose a fixed price: this will be in EFT - and it makes sense to make it quite high - (he chooses a value of about $167) for reasons that come clear below.
10. OpenSea asks that you set up a test transaction before you can place your item for sale. You are going to be paying OpenSea 2.5% commission on your sale - but you also need to cover the "gas-prices" for driving the Ethereum transaction itself. Since these costs are currently high - because of demand - there is not much point in pricing your EFTs super-low - because the gas-price fee can eclipse the value of the transaction. In the example our transaction costs will be. In his example - the mining fee will be $120 on this transaction!
11. Confirm the transaction - and your NFT is up for sale.

Some notes: Not difficult to do. But little point unless you believe your NFT is worth a few hundred dollars - and if you can find a buyer. Lots of commissions and transactions costs in the way. No real verification of your artwork required.
posted by rongorongo at 12:01 PM on July 31, 2021 [1 favorite]

If you want an "in the wild" place to observe people (mostly fruitlessly) flogging their NFTs on OpenSea, there's a subreddit mostly filled with self promo posts: r/opensea

Most of them are from people whose collections hardly sell anything or have sold some for small amounts that probably haven't earned back the initial setup investment.
posted by foxfirefey at 9:00 PM on July 31, 2021

I expect there is something that can be explained by someone familiar with the NFT world to those of us who aren’t, about why some NFTs and their creators are generating high prices. e.g., I have no idea why “CryptoPunks” can command high prices.

Supreme garments or Beanie Babies can command high prices which, to outsiders, seems crazy but also, slightly comprehensible. We’re used to the idea of such crazes and how wrapped up in them people get. And we have some context in which to put “expensive clothes” and “collectible toys”.

But 10,000 algorithmically generated faces? There’s a context for their perceived value (by some people) which I don’t understand. So I guess you could look into the history of specific pieces like this to try and get an understanding of the world of pricey NFTs.
posted by fabius at 5:21 AM on August 1, 2021

I'm not sure if this is exactly what you're asking, but I know that as an artist myself, I looked into NFTs a bit, and basically concluded that they work like social media works, which is to say, not at all. Meaning, I have never been able to build a real following on social media, and therefor there is no point in me making NFTs (no-one will find them or buy them). Whereas some artist colleagues and peers who do have success on social media, do decide to make NFTs, because they are a way to leverage the audience they have built on social.

So, my answer to who is making NFTs would be "people who are popular." And then also 90 gajillion unpopular people, but you'll never see their NFTs anywhere.
posted by edlundart at 4:51 AM on August 5, 2021