NFT's Beginners Guide
Welcome to 2022, where digital pictures can make you a millionaire overnight.
NFTs have been gaining in popularity since 2014, yet it wasn’t until 2021 that this new platform broke into the mainstream. So what is an NFT? An NFT can pretty much be anything digital. This includes drawings, music, podcasts, digital fashion, and even real estate in the Metaverse!
Now, let’s talk about what NFT stands for. NFT, or non-fungible token, means each one is irreplaceable and unique, tied to a specific receipt where you can become the owner of the digital art through the Ethereum blockchain (a secure network of computer systems that records the sale on a digital ledger). Ethereum is a cryptocurrency similar to Bitcoin that is used to buy NFTs.
So people are really paying money for this thing?
If you ask American digital artist Michael Joseph Winkelmann, known professionally as Beeple, he’d definitely say so! Especially after selling the most expensive NFT for 69 million dollars. This piece of work is called Everydays and is comprised of 5,000 individual images that Beeple created and shared daily on Instagram and Twitter for more than 13 years as a way to practice and hone his craft. “It really is a diary of technology, my life, and the world over these last 13 years,” he told The South China Morning Post. The craziest part is that Beeple didn’t choose to retire after making over $69.3 million- he still continues his passion and consistently puts out his artwork every single day.
Is it bad for the environment?
This is another hot-topic surrounding NFTs. There is a lot of electricity that goes into the blockchain and this in turn creates greenhouse gas emissions. For example, for every 1 Ethereum transaction, the amount of energy is equivalent to 100,000 VISA transactions. However, there are individuals and companies, such as CurrencyWorks, working on mitigating this issue for the future. CurrencyWorks is turning oil waste into environmentally-friendly energy that powers crypto mining.
Last but not least, can my NFT lose value in the future?
It is possible that the digital artwork will experience Bit Rot, which is when image quality deteriorates over time. Additionally, file formats are harder to open and certain websites shut down after some time so it is definitely a risk. One remedy to this problem is having a multitude of hosts (a computer or other device connected to a computer network) rather than one single domain owner to ensure the files stay online.
Photographers- Top right: Pawel Czerwinski
Bottom Right: Dan Stark
Sources:
https://www.theverge.com/2021/3/15/22328203/nft-cryptoart-ethereum-blockchain-climate-change
https://www.theverge.com/2021/3/11/22325054/beeple-christies-nft-sale-cost-everydays-69-million
https://www.nytimes.com/2021/03/11/arts/design/nft-auction-christies-beeple.html
https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq
https://www.statista.com/statistics/1265891/ethereum-energy-consumption-transaction-comparison-visa/