May 10
NFTs… What are they?
NFTs, a short term for non-fungible tokens, they do not exist physically but are extremely valuable in the digital world.
Some visual example of NFTs is the Nyan Cat meme, which was sold for $600,000 and Twitter’s founder Jack Dorsey first tweet that he auctioned for $2,5 million.
NFTs are data that is added to a file that creates a unique or distinct signature. This comes in many forms such as image file, a song, a tweet, a text posted on a website, a physical item and a lot more digital formats.
So these forms can be owned by someone and it is marked with their unique signature or coded distinctly to show authenticity as well as differentiating it from any digital replicas or fakes.
Luiz Octavio, CEO and founder of Dux Cripto worked on developing NFTs and explained that NFTs is a form of decentralized certification.
FUN FACT!
‘Everydays: The First 5000 Days,’ a collage by Beeple/ Mike Winkelmann an artist, was sold for $60 million. It’s the third most expensive artwork to be sold by a living artist and it’s digital!
There is a digital log of ownership, facilitated by Blockchain that keeps track of previous NFT owners.
Are investing in NFTs worth it?
Just like real estate, fine art and other cryptocurrencies, the issue for NFT investors is will the NFTs will keep their value. Token holders/ collectors might get stuck with NFTs if the popularity declines and people stop wanting to buy them.
Are there any environmental impact of NFTs? Just like all cryptocurrencies, it has a large impact on the environment. It must be verified through Blockchain to guarantee the encryption is valid, which consumes large amounts of energy.
Creation of an average NFT has a carbon footprint of over 200 kg which is equivalent to driving 500 miles in a typical American gasoline-powered car.
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