Minting, whitelists and waitlists

What is minting an NFT?

Minting an NFT is simply the process of turning a digital file into a cryptocurrency collectible, storing the file on a decentralised database or distributed ledger forever, becoming impossible to edit, modify or delete. For instance, minting an NFT would be how a user’s digital art would become part of the Ethereum blockchain, a public ledger that is unchangeable and tamper-proof. 

Usually, when a user mints an NFT, this would be purchasing the NFT through a projects website through a whitelist, waitlist or presale. This is known as a primary purchase. Simply buying an NFT can be done through a secondary market such as Opensea.io. Here, on secondary markets, the NFTs are listed for sale after their mint, with the price usually decided by bidding.

What is a whitelist or waitlist?

A whitelisting is common practice in the NFT space. It is when a cryptocurrency wallet address is pre-approved for minting of NFTs on a specific date, at a specific time (usually a window of time).  Essentially, whitelisting can reward those early supporters of the NFT project with guaranteed slots for them to mint an NFT. Usually whitelisting access is gained from adhering to certain criteria that is more often than not set out in a project’s discord. 

A waitlist is simply what is inferred in its name – a list a user can sign up to to gain first access to buy, sell, and hold NFTs. For instance, a user can join a waitlist in which they are placed in a line, at random, similar to a lottery. The user has their number called and within a specified time period, will have access to purchase an NFT. 

Whitelists and waitlists can be used to minimise “gas fee wars” between purchasers of NFTs when multiple people are trying to mint NFTs at the same time. As whitelisting and waitlisting spreads out pre-approved users and their minting, transactions will not occur at the same time, thus avoiding spikes in transaction costs and gas fees. For instance, picture 20,000 people trying to mint an NFT on the Ethereum network at the same time. Users will pay more money (gas fees) in order to speed up their transaction process and gain access to the NFT. Note, this will only pertain to the Ethereum network and it’s unfortunately high gas fees, and not to different networks such as Solana’s in which transaction fees are low.