#6 NFTs: the good, the bad and the ugly
#6 NFTs: the good, the bad and the ugly
On crypto art, digital assets and environmental implications.
How much would you pay to own a … tweet? Twitter CEO, Jack Dorsey, sold his first-ever tweet as an NFT for $2.9m.
Hmm. Okay, let’s try again. Do you like cats? Probably not as much as the person who decided to buy a CryptoKitties digital cat for $172,000. Then I guess it wouldn’t surprise you if I’d told you the Nyan Cat meme, the animated flying cat with a pop-tart body leaving a rainbow trail, was sold for roughly $600,000.
In March this year, Christie’s auctioned a jpg digital file made by Mike Winkelmann, better known as Beeple, for the historic price of $69m!
After this week’s latest NFT craze about the woman in the Disaster Girl meme who has sold the original photo as NFT for nearly $500,000, I thought it’s finally time to wrap my head around cryptocurrency - or at least, give it a go.
Here’s what I’ve learned:
NFTs (non-fungible tokens) = a way to prove ownership of an asset
A token is an asset - digital or physical, ranging from video games, music, digital art and sports memorabilia. Non-fungible means, more or less, unique, irreplaceable and non-interchangeable. Ex: Da Vinci’s Mona Lisa. Plenty of copies, yet only one original piece in the Louvre Museum. On the other hand, fungible refers to the ability to be divided into equal bits, with each unit having the same value. All bills and notes are fungible items, as well as Bitcoins because they carry the same value.
Blockchains ditch the middleman
Blockchain technology relies on the idea of eliminating the centralised middleman for payments - the bank - by containing transactions in a verifiable and authenticated way that occurs between parties. NFTs utilise the blockchain too. This allows anyone to view the current owner of an NFT, as well as all previous ones. An NFT has a unique ID on the blockchain meaning it cannot be forged nor duplicated by any means.
Cryptocurrencies and Ethereum
A cryptocurrency is a digital asset used as a medium of exchange that gets recorded in the blockchain. Ethereum is the second biggest cryptocurrency and the main currency used for purchasing Crypto Art and NFTs.
The psychology of collection versus art theft
The first question that pops up in everyone’s minds is ‘why on earth would I spend X amount of money when I can just screenshot and save the thing on my computer for free?’ The value proposition of NFTs actually comes from owning the piece, ‘the original’ - after all, that’s why they’re ‘collectibiles.’
And if you as a collector are lucky for your digital asset to go viral, this will naturally drive up the value of your asset.
Whilst this is theoretically a fantastic opportunity for artists to monetise digital pieces and even receive a percentage of the secondary sales, there have already been cases of people copying digital art, sharing it on a different marketplace with a different token and selling it.
The environmental cost
People are talking about NFTs and cryptocurrency as the technology that may revolutionise society without realising that it is, at the same time, the one that accelerates the climate disaster. Environmental negligence is by far the most common criticism due to the electricity it takes to mine Bitcoin and Ethereum, which translates into carbon emissions. According to the Ethereum Energy Consumption Index, a single Ethereum transaction is equivalent to the power consumption of an average U.S. household over 2.65 days!
There are, indeed, more eco-friendly options available to buy and sell NFTs (they use different blockchains) such as KodaDot, Viv3, hic et nunc, Kalamint, SIGN Art or Atomic, yet thorough innovation is needed. This kind of innovation involves money and time, and so far, there is no evidence of embracing green NFTs anytime soon.
Technical challenges
If you’re determined to invest in NFTs, maybe set a spending limit and only buy what you can afford to lose. Apart from the high speculative risk involved, investors can also see their digital asset *literally* disappear into cyberspace if, for instance, the URL breaks or something happens to the website hosting company.
NFTs today
Regardless of the hype and novelty of it all, this feels exclusive, territory for the mega-rich, and lacking transparency.
There’s so much more to say but if you want to really get your teeth into this topic, start collecting or minting NFTs, I found this curated list of readings and resources that contains all things NFTs (from their applications and ecosystem to metadata, NFT subculture and earlier forms of crypto art and collectibles).
A final note before we dive into the weekly recommendations: please act responsibly, do your own research, and seek professional financial advice if need be.
Until next Friday…
Happy reading, happy learning,
Teodora x
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🥁 📚 The latest in the literary world
Initially, this was going to be about Meghan Markle and her latest venture, now in the literary world. 👀 Her soon-to-be-published children’s book, “The Bench,” is said to be inspired by a poem she wrote for Prince Harry on Father’s Day following the birth of their first child, Archie. Former GMB presenter Piers Morgan “laughed out loud” when the news broke and went on writing in his Daily Mail column, calling it an “act of gargantuan hypocrisy, beyond parody.” But there’s more! The Duchess of Sussex was even accused of plagiarism, however, the claims have quickly been dismissed. She now has to deal with accusations on how her book “may put an entire generation off reading,” according to the Telegraph. 🤯
Let’s leave poor Meghan rest in her humble abode with Archie’s Chick Inn 🐓, whilst we turn to Gordon Ramsay’s upcoming cookbook inspired by his YouTube series, #RamsayIn10. The superstar chef will bring 100 new and delicious recipes that are done in just …10 minutes?! 👩🍳 👨🍳 Have you pre-ordered your copy yet? 🍳
Phoebe Morgan, Editorial Director at Harper Collins, has launched a charity auction - “Books for Vaccine” - aiming to raise funds for the vaccine roll-out in the countries hardest hit by Covid. 🦠 💉 The auction will run until May 21, so share and support, as much as you can! 🙌
🎧 📰 👀 My media diet this week
I knew that podcasts can be about anything but this is just really cool! “What the Denmark” is on a mission to help anyone understand how people in the happiest country in the world think and behave! First off, why is Danish humour so confusing? Why listen? An insight into “the campfire mentality,” humour as a tool in enabling and perpetuating freedom of speech, and how being sarcastic is, in fact, a sign of affection. 💜
How it is to be the world’s youngest editor-in-chief at only 21? Tom Faber from Kinfolk Magazine interviewed Elise By Olsen on being a Gen-Z multi-hyphenate, the conversations fashion isn’t having around politics, money and power, and why Anna Wintour should stop being on the helm of Vogue. 😱 💁♀️
Borderline is one of my new favourite independent media platforms exploring geopolitics, immigration, identity and belonging run by Isabelle Roughol, once international editor of LinkedIn (she quit her job to start this community for “defiant global citizens”). Apart from her newsletter (to which you should all subscribe!), she has a podcast too. Check out her latest episode on how borders are an extension of the colonial project. Why listen? You’ll learn from Leah Cowan, author of Border Nation, about the case for abolishing borders, and how the border breeds crime and violence.
📌 Random news in brief
Degree Inclusive has created the world’s first deodorant for people with visual impairments as well as upper limb disabilities. This really makes you rethink your able-bodied privilege!
In an H&M store in Stockholm, customers can watch as a machine, called Looop, shreds their old clothes and knits them into something new. ♻️
BONUS: Let’s start the weekend on a high note with pictures of dogs at polling stations from yesterday’s elections! 🐶
Before we say goodbye… 🥺
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so I see you took an interest in trying to understand NFTs. That kind of help me understand it a bit better. But yeah that stuff I's confusing. This was an informative always a pleasure to start my Friday with. Keep up the great work always :) 😀