So, given the little post I made previously about the booming world of Non Fungible Tokens, I figured I would investigate this nonsense for myself. I don’t like talking about things I haven’t done IRL so here we go.
My Initial introduction to this stuff was, probably like most people, on Opensea. It’s a common point of entry because of the low barrier to create an account and make an item. Note I said make and not mint. I’ll get to the minting bit in a sec. Anyway, having to set up a metamask wallet browser extension and all that threw my trust radar off and I quickly jumped ship to Rarible before bothering to upload anying.
Getting set up on Rarible was similar, you have to link a wallet to create an account. These guys gave me the option to connect to a Coinbase wallet which I trusted more than the ones I saw in metamask. With the wallet on my phone I was then able to move ETH from my other wallets to the Coinbase one, which show up in my account info on Rarible.
Now, this part is important. These NFT sites are basically a front end store to the items on the blockchain. This means that what you upload or buy from the “store” is just a middle man to help broker the exchange of goods from one account to another from the big ol blockchain. Opensea customers can access the tokens you upload from Rarible because they aren’t on a Rarible server they’re on the blockchain itself.
It took a few days for me to just set up the Rarible account and move some coin to the wallet and such because I basically only mess with this stuff at the end of the day or weekends. I knew there were tokens from artists I already knew on the site so I my plan was to move enough ETH to buy one of theirs. So I did. Then I learned about gas fees.
When you move bitcoin around you pay a fee to do so, just like paypal or credit card transfers. However, with ETH you don’t pay a % fee of the amount you’re moving you pay a shipping and handling fee to the miners who are doing the computing work on the blockchain for you. So now you have the storefront, the miners, and the artist to pay for a transaction to go through. Rarible charges around $10 to mint a piece, followed by the gas fees that are set by the miners, NOT YOUR STORE, then the rest of the money goes to the artist who is selling the piece. Seems great until you realize how much gas costs.
Holy gas prices Batman, so yeah I didn’t realize how much gas was going to be before making my first attempt at a purchase. My wallet let me set the gas price I wanted so I lowballed it to $20 expecting it to just take much longer than a few minutes to go through. Some folks claimed it would take days so I waited. And waited. Then the miners dropped the transaction. They pick which transactions to process based on the gas price paid. Too low and they drop your request and the ETH goes back to your wallet since nothing really happened. You will lose the $10’s Rarible charges to attempt the buy because that is separate from the miners transaction. So I wait for gas price to drop. For days it only went higher and higher. $70 went to $100, that went up to $200. Now it was getting to the point that a $50 NFT was going to cost $260 to buy much less attempt to mint my own.
Here are the points in which you will need to pay gas on Rarible:
1. To pay for an NFT using the Buy It Now option.
2. To mint an NFT on your account.
3. As the owner you must pay gas to accept a bid price.
4. To burn or “delete” an NFT you own. (They don’t really get deleted but moved to some deadzone on the blockchain or something.)
That’s where things get confusing. On eBay you bid under the buyout price, but for NFT’s you need to bid over the buyout price because the owner will be paying for the gas in that case on top of the gas they paid to mint the item. If you are going to buy an NFT you need to be aware of the gas price at the time of sale. Be sure your wallet has enough funds to pay the $10 to the shop, then whatever the gas price is that minute, followed by the actual cost of the item. Example: A $100 NFT while gas is $75 will cost you around $185 dollars.
So my first purchase finally goes through because I then understood how the whole thing worked. Perfect. Now, to try and mint my own from some old unused artwork I did several years ago. The gas price at that time was around $75 which was way less than it had been for the whole week prior. Here is a great site that shows how much it costs to mint the various types of tokens on the service. There you can see how much it costs to mint a 1/1 item vs a multiple X/X item. Opensea only allows for 1/1 tokens, but Rarible allows for you to set the number. Most I’ve seen are 5/5, 10/10, etc. all for the same image/item. Doing the multiple option is cheaper.
Opensea also doesn’t charge you any fees or have you pay gas when you upload because it’s not minted until someone purchases your token, which is why it’s flooded with bonkers stuff. But if you want to test your luck with the whole thing it’s a good starting point. Then there is Foundation, who does timed auctions for pieces, but requires an invite from another member to join. You’ll see tons of scams trying to sell you Foundation invites, just don’t bother. I went with Rarible because it seemed like a good middleground. I’m not verified yet on Rarible, which you need to be in order to show up in their search function (another step they take to curb spam). The wait on that is around two weeks so I’m not worried.