NFTs are also known as non-fungible tokens and are a buzzword these days. They are the hype in the cryptocurrency industry and are a niche market in the blockchain industry. However, other than the term NFT here, what else do we know about this trend in the crypto world.
Many people are buying crypto-currencies and NFTs because they are more valuable than actual money and are safer in some ways, even though they can lose their value quite quickly. So, without further ado, let’s dive into this blog and learn some of the reasons why you should invest in NFTs.
1. What is an NFT?
As mentioned above, NFTs stand for non-fungible tokens. If you don’t have an English degree or are in the crypto world, you probably have no idea what fungible means. Non-fungible means that the thing is unique or cannot be replaced by anything else. For example, your traditional bitcoin is fungible and can be exchanged for another bitcoin or cash value. It is like a white dragon card with blue eyes, but rarer, and it is one of a kind.
You can exchange something else for non-fungible tokens, but there’s nothing like it on the market. NFTs can take the form of anything, be it a drawing, a VR bar, or even music. They are part of the Ethereum blockchain and are a blockchain that stores additional information, which makes them work differently than an ETH coin.
2. Ethics
Everyone knows that NFTs and crypto, in general, are bad for the environment, and this means that the industries and people who are into NFTs have iffy ethics. Some companies are profiting from the bad luck and suffering of others. One such example is the Associated Press which thought it was a bright idea to see an NFT, a video of a rubber boat full of migrants.
Because people escaping war and persecution is something to profit off these days, and this looks like an NFT race on who can sell the most gruesome one. Ethically speaking, this is gross to me, and you can’t cash in on someone’s suffering. Some companies are selling historical and contemporary photojournalism of war, famine, refugees, and natural disasters.
Though these images have been bought and sold in the past, NFTs are turning them into highly distilled levels of hypercapitalism. They are passing these catastrophes as art and something that everyone should own, and the ethic there is questionable, to say the least. It is an added layer of speculation and commodification of war, pain, and human tragedy.
3. Environmental impact
Ethics aside, NFTs are bad for the environment and have a great unnecessary carbon footprint. Mining crypto demands a large amount of energy, and this is mostly done using fossil fuels. The mining of one cryptocurrency can create up to 102.38 kilograms of CO2, which equate to watching 17 063 hours (approximately 2 years or 710 days) of YouTube or 226 910 visa transactions.
Crypto is said to be the money of the future and is supposed to get rid of centralized financial institutions. As someone who studied linguistics, this reads as pure gobbledygook, which is a speech that appears to be using specialized jargon to sound smart when in reality, it is a whole bunch of nothing.
If it was the money of the future, then mining, one should plant a tree and not consume thousands of electricity-hungry CPUs. If you ask me, this is not a revolution; this is a joke meant to make the rich richer and keep the poor where they are. This is classic Marx’s definition of capitalism, if you ask us.
4. Monetary value
Because they are collectibles, means they are rather rare, and there are not many NFTs on the market today. Because for an item to be considered a collectible, it must be rare. Since there is a limited amount of non-fungible tokens on the market, this means that they are in high demand.
Basic economics dictates that the more in demand an item is and the less of it on the market, the higher its price will be. In other words, having a limited amount of non-fungible tokens in high demand on the market means that their value will automatically increase. This is one of the main reasons they are such a popular and safe investment.
Because they are non-fungible, each one is unique and cannot be exchanged or traded for a similar item. However, they gain an increase in value as fast as they depreciate. And with the addition of blockchains, they can now be verified as unique and real, and their rarity alone makes them a sound and solid investment.
Personally, I’m not on the crypto-currencies hype train because they are bad for the environment, and mining a single coin has a huge carbon footprint. Let us know what you think in the comments section below and what you want to read next, and if you want to know more about non-fungible tokens.