Non-fungible tokens (NFTs) have been around for a while. However, their explosion in popularity was seen later in 2021. The coming of the NFTs into the limelight was after the selling of one of the most expensive NFTs ever sold. Minting NFTs also contributed to their rise in popularity since they cost much more that normal blockchain transactions like DeFi, approving and swapping tokens. NFTs, in most cases, end up making headlines when celebrities get involved. So, if you decide to venture into NFTs, we make you understand the cost of minting NFTs.
What Actually is NFT?
The NFT phenomenon has been in play since 2014. However, after Pak’s sell-off, they have grown incredibly popular. Before the introduction of social tokens and NFTs, trading was a large part of the digital world. People have been buying/selling or holding digital assets for a long time, but the security and ownership of digital asset space were hard to define.
With social tokens and NFTs being invented, it became easy to demonstrate ownership of digital assets, and its encryptions made it much safer. So, in brief, an NFT functions as a digital certificate of ownership for digital assets, which can be anything similar to real-world objects and arts, such as paintings, music, photography & videography, games, virtual real estate, etc.
NFTs have their own metadata codes stored on the digital ledgers using blockchain technology to establish uniqueness and ownership. Non-fungible tokens are one-of-a-kind, meaning a token cannot be exchanged with another. Each NFT’s value differs.
How are NFTs Created?
In blockchain terminology, creating an NFT is known as NFT minting. NFT minting includes deciding where, when, and how to build NFTs and which tools and technologies need to be used.
The first step in minting NFT is creating a unique digital asset. It can be anything from digital artwork to in-game weapons. It should be followed by selecting and setting up the crypto wallet and NFT Marketplace.
The next step is to mint and display the NFTs on NFT marketplaces. You must upload your digital asset file to the marketplace and create the metadata. Once the digital asset is uploaded, you are done with creating the NFT. Lastly, you can display or showcase the NFT in a marketplace for people to buy them, often known as listing.
The Cost of Minting NFTs
Anyone can create an NFT, and it is also easy to set up accounts on all major platforms, such as Opensea, Rarible, or Mintable. The most exciting thing about such platforms is that they offer at least two, if not more, blockchains to choose from when minting an NFT.
It is important to note that NFT creation depends on the chosen blockchain. Creating an NFT range from $0.05 to over $60. The most expensive blockchain in creating an NFT is Ethereum. On the other hand, Solana is the cheapest. However, this is not inclusive of marketplace fees, which range from 2.5% to 5%.
Therefore, some blockchains appear to be preferable to others. It is crazy to know that the Ethereum blockchain has had fees of over $500 to Mint NFTs at its busiest time.
Thus, one can choose between blockchains, choosing the cheapest between them.
We break down the cost of creating an NFT between blockchains in the table below.
The reason for the indifference between Ethereum and other blockchains is Ethereum’s network’s consensus mechanism. However, Ethereum has undergone massive updates, changing it from a Proof-of-Work (PoW) to a Proof-of-Stake model. After this update, transactions will likely go down and speed up.
We see this in a blockchain like Solana, using PoS and the proof-of-history (PoH) protocol. The double protocols make it possible for Solana to provide a more efficient experience. As a result, it is possible to carry out 65,000 TPS.
However, regardless of whatever blockchain you choose in creating your NFT, there are other transaction costs you are likely to encounter. Such are:
Minting involves publishing your token on the blockchain. As such, it is necessary to pay a fee to the miners actively working on publishing your NFT. Minting comes as the most costly process of creating an NFT.
Marketplace fees vary depending on the marketplace you use to create your NFT. It is through such fees that the compensation of the marketplace services takes place. Creating an NFT on any marketplace, regardless of the blockchain, means you are subject to its transaction fees. Each marketplace will have fees ranging from 2.5% to 5%.
Is it Possible to Mint NFTs for Free?
You can create an NFT for free using the Polygon blockchain. Utilizing the lazy minting function enables you to create an NFT free of charge until your NFT sells. Otherwise, you are best off using inexpensive blockchains like Solana, Tezos, Avalanche, or WAX to create an NFT for cheap.
Very few NFT marketplaces and even fewer blockchains allow you to create an NFT free of charge, understandably. Since one person doesn’t run blockchains, a number of people worldwide put their time and resources into maintaining each blockchain, so users have to pay a fee.
This analysis concludes that it doesn’t cost much to create an NFT. It can be completely free if you choose a popular platform such as OpenSea, Rarible, or Mintable and check the lazy minting option.
The cost of creating NFTs majorly depends on the blockchain you choose. Understand the various blockchain and choose the best one for your art, collectible, or digital assets.