NFTs Raise Economic, Environmental Questions
On February 25th, the Non-Fungible Token, or NFT, of artist Mike Winklemann’s Everydays: the first 5000 days sold for over 69 milliion dollars, making this digital token of the artwork the third most valuable piece of art by a living artist. But what are NFTs, and why did this sell for so much?
NFTs, or Non-Fungible Tokens, are a form of unique digital file which are only able to be owned by a single individual. Due to their one of a kind status, they have been used recently as ways of verifying ownership of digital assets ranging from pieces of art, to memes, or even the first tweet on Twitter.
Coinciding with this rise of economic value is an increased concern over the environmental impact of NFTs. Like the cryptocurrencies that it shares blockchain with, NFTs are estimated to draw a disproportionatly large amount of energy in their creation and verification. The result is a potentially sizeable carbon footprint which many have criticised.
But how serious are these problems? And are NFTs likely to stick around?