This past year, cryptocurrencies have seen a rise in popularity. As a result of this, the term “NFT” has started to float around. Although NFTs are not a cryptocurrency, it is part of the Ethereum blockchain.
An NFT can be considered a one-of-a-kind digital art form with the ability to be purchased. It is exclusive to the buyer, by certificate, which identifies the digital asset as solely the buyers.
The latest episode of Anstandig on the Future provides a further look into the NFT market, beginning with a brief assessment of the NFTs’ background, while also incorporating a current understanding of NFTs. The episode transitions into the potential benefits (and risks) the NFT market can affect our world. Specifically, this includes things such as contracts, fraud, and the environment.
While in the midst of the NFT golden age, there are various aspects to consider before getting involved in the NFT market.
There is much confusion on what an NFT can actually look like, so let’s clarify.
Let’s say there’s a musician wanting to make an NFT for their fans. One way of approaching this could be releasing a few seconds of a music video, and that would be the NFT. Or a portion of a song that hasn’t been released yet. Then the NFTs will be auctioned off, where fans would have the ability to bid.
It must be noted that there are no limitations to the digital art being sold as NFTs. The opportunities are endless. In other words, there is no definitive list of what an NFT has to be.
This is certainly one of the more exciting characteristics of the NFT, creativity is encouraged. There have already been unique NFTs that consisted of GIFs, Tweets, and even articles. As the NFT market progresses even more creative NFTs will appear.
As a result of NFTs relying on the Ethereum blockchain, large amounts of energy are required.
This is due to cryptocurrencies involving lots of computer power in order to function, which of course means massive amounts of electricity are being used. Specifically, Ethereum is mostly mined in Eastern Europe where energy costs are extremely low.
Not only are the energy costs low, but it is being sourced from non-sustainable energy. So, the energy is coming from something like coal which is more harmful to the environment, rather than a source like solar or wind.
Yes, companies are working toward solutions to shrink this energy footprint, while also supporting the NFT economy.
One example is Green NFTs, which is providing bounties for individuals who mint NFTs using green energy while powering the Ethereum blockchain.
Another current solution that’s being created is new blockchains that require less energy and still allow the NFTs to link.
As established, NFTs have a lot of potential influence regarding digital properties and creativity, although it comes with various risks including the environment.
The biggest concern of NFTs is energy consumption, now energy-reduced options are available to minimize this concern. Together, let’s do our part and make sure we’re making environmental-friendly choices when involved in the NFT market.
Whether you’re listening in the car, on a commute to your office, or while preparing lunch in your own kitchen, I hope you enjoy Anstandig on the Future.