NFT’s – What are they and what do they have to offer?

This article explains the good, the bad and the ugly about the thing that took the internet by storm, NFTs (Non-Fungible Tokens).

By: Kevin 11.2

You might have seen or heard the acronym NFT. What is it? An NFT is a Non-Fungible Token. A file or form of media on the internet that is tied to a receipt. Non-Fungible means that it cannot be replicated. Which simply gives the person who bought the NFT ownership. An example is the images of digitally drawn apes. Someone could screenshot that image hundreds of times, but they will never own the original piece. This is because the owner has that receipt or token to confirm that his one is the real one. NFTs have been on the obscure side of the internet since 2014, up until March 2021 when it blew up on social media.

NFT’s share the same space as cryptocurrencies. A simple rundown of cryptocurrency is a digital currency that uses advanced encryption known as cryptography. Cryptocurrencies use blockchain technology to create a decentralized (controlled by many computers) network. Normally a transaction online requires an application or website that is owned by a company. Blockchain technology removes the middleman and gives you a more direct way of doing your transactions. People use these cryptocurrencies to buy or invest in NFTs. There are multiple reasons that people buy NFTs. Some want to sell them later for a higher price. Others want to collect them like Funko Pop figures. Most of the time if you want to sell your NFTs, like most things, you need to make a portfolio look legitimate. They are used to mocking others by claiming that their NFT costs more therefore it is better. NFTs are like everyday items, Humans give things value. If something is Valuable, there will be a demand.

Now NFTs do not seem too bad. Except they take a lot of energy to maintain, to track sales and bids. As stated by Memo Akten, The Average NFT requires 340kWh of energy. That is equivalent to using a laptop for 3 years or boiling a kettle 4500 times. The Average NFT produces 211 Kg of CO2 emissions. It is almost equal to driving a car fueled by petrol. There could be over 100,000 or more at the time of writing this. In just the last 6 months of 2020, the total energy output of NFTs was 263,538 Kilowatts per hour. Which is equivalent to flying a plane for 2 months straight in carbon emissions. This is inconceivable but blockchain requires a lot of energy to function. The only simple options are to use energy sources that do not produce carbon dioxide or to stop using blockchain technology completely.

Artists are more inclined on creating NFTs because they generate significant money. Significant is even an understatement. The most expensive NFT sold at the time of writing sold for 69 million, ‘Everyday – The First 5000 days by Beeple’. NFTs bring serious cash, but due to that, there are a lot of NFTs that look elementary at best. The NFT is going to change the world. The NFT could change how movie tickets work or how art will be perceived in the future. Society will become reliant on digital-based mediums and change is happening right now. Hopefully, as the NFT improves they will require less energy. Wouldn’t you agree?