The NFT has infiltrated the art world as a way of preserving original works and their value.
NFTs have been a trending topic in media and online over the last couple of months, infiltrating the art world and social media. But what are NFTs? And is this complex and currently lucrative art trend here to stay?
To start, NFT stands for nonfungible token. These are units of data that appear on blockchains, a list of records and transactions linked together using cryptographic codes.
Because digital art can so easily be replicated and reproduced, digital artists have begun using NFTs to mark their original works, a tech-heavy definition that boils down to something similar in concept to a coded digital trademark, and preserve its value.
The market for NFTs is currently valued at $1 billion.
Sina Estavi, chief executive officer of Malaysian blockchain service Bridge Oracle, bought the NFT of Twitter CEO Jack Dorsey’s first tweet, which reads, “just setting up my twttr,” for $2.9 million. Estavi later compared his acquisition to that of owning Leonardo da Vinci’s Mona Lisa.
Christie’s, a British auction house with a flagship in New York, made history as the first major auction house to sell an NFT last month. The NFT, “Everydays – The First 5000 Days” by the artist Beeple, is a digital compilation of 5,000 images, with Beeple creating one per day for 5,000 days. It was sold for $69.3 million.
Media is also jumping on the new trend. Playboy is in the process of launching an NFT gallery and auction through Nifty Gateway, giving fans a chance to view and own images from their archive and original works, Rachel Webber, Playboy’s chief brand officer and president of corporate strategy, recently told Insider.
The digital landscape largely harmed artists, making it easy for people to reproduce and share their works, demonetizing them in the process.
NFTs offer digital artists a way to better monetize their works at an even higher and more profitable rate. Some versions of NFTs even extend the artist’s ownership beyond the original sale and to resales, which allows artists to continue to make a profit, regardless of if and how many times the NFT is resold.
However, the environmental price of NFTs are in question. Creating and minting NFTs require a high level of computing power and energy, similar to that of cryptocurrencies such as Bitcoin and Ethereum. For example, the energy utilized to mine bitcoin has hit the equivalent of Argentina’s annual carbon footprint.
And as fellow Changing America reporter Austa Somvichian-Clausen explained,“Creating the NFTs they are now profiting from required an enormous amount of raw computing power. Ethereum mining consumes about 26.5 terawatt-hours of electricity a year. To put that into perspective — that is nearly as much energy used annually by the entire country of Ireland.”
Some platforms are already trying to turn to eco-friendly ways to mint NFTs, such as by using hydroelectricity in areas like Sweden and Norway. The platform GitHub went as far as having published its own memo on how and where to sustainably create and curate NFTs. But the sustainability and lengths of these measures are not fully known as of yet.
The market for NFTs is also young and volatile. Prices of NFTs have crashed, already down 70 percent from February, leaving the business savvy questioning the trend’s longevity and worth.
But as for now, the NFT is in its infancy and only has time to grow.