A new craze has broken out in the Crypto world; NFTs (non-fungible tokens) or Crypto Collectibles. NFTs are exploding in popularity by the millions, Soaring in value from $12 million in December 2020 to $340 million in February 2021 and is rapidly increasing.
In economics, a fungible asset is something with units that can be easily interchangeable; like money. With money, you can swap a $10 bill for two $5 bills and it will hold the same value. However, if something is non-fungible, there is no equal value exchange because it has its own unique properties; therefore, it cannot be interchanged with something else. NFTs aren’t digital artworks but rather digital certificates of authenticity, that are associated with unique digital artworks. The certificate is stored on an unchanging database called a blockchain, the technology associated with Bitcoin, Ethereum, etc.
NFTs are intangible one-of-one assets that can be bought and sold as any other piece of art or property, and it’s value is unpredictable.
In March, a piece of art worth $95,000 was sold to a tech company, in the same month a digital artist by the name Beeple, sold a piece of art for $69 million dollars turning the art world Upside down and just a few days ago, the viral video “Charlie Bit My Finger” was sold for $760,000. With over 880 million views since 2007 it’s safe to say, “ Everyone and their Mother knows Charlie and his brother Harry who exclaimed with the most precious British accent, “Charlie bit me”! All three are examples of how NFTs can be very profitable to those who owned them.
It can’t be that simple right? Exactly. So what are the Cons? Though our research, one of the biggest concerns with with NFTs is its affects in the environment. According to the digiconomist.net website, a single Ethereum transaction consumes more than 70.32 kWh, enough to power 1 U.S. household for 2.5 days. This is equivalent to a carbon footprint of around 34 Kg of carbon dioxide (CO2). Compared with traditional sources of consumption, this carbon footprint is equivalent to watching more than 5,700 hours of YouTube video or over 76,000 credit card transactions. Ethereum consumes more energy per year than all of Denmark and has a carbon footprint the size caused by Lithuania, according to the site. I mean.... that’s a lot! How does that make you feel? I immediately researched electricity!
So what does our community do with this information? We Educate and we Execute. Though NFTs are fairly new, there is enough information for us to apply this knowledge to our community. Some Black artists have expressed how NFTs helped them independently monetize their work as well as exposed them to an exclusive art world with artists from diverse backgrounds. There have been initiatives modeled to develop Black artists in the digital space of Crypto and creativity; Black NFT art club on the Clubhouse platform and the digital art gallery ONE/OFF, that features 33 Black crypto artists. So be sure to stay updated and informed as technology is rapidly changing .