The NFT outbreak: what’s so bad about them?

This image of an, titled Quantum, is regarded as the first legitimate NFT. It was sold in 2014, three years before the term was coined.

The Economic Times

This image of an, titled “Quantum”, is regarded as the first legitimate NFT. It was sold in 2014, three years before the term was coined.

Willem Lent, Yearbook Section Editor

As of late, Twitter has become inundated with discussion surrounding the ethics of cryptocurrency—more specifically non-fungible tokens or NFTs, the latest and most prominent iteration of cryptocurrency transactions.

NFTs, while in concept have been around as early as 2014, have only really become mainstream following their introduction on Twitter. NFTs are images or “tokens” that are designed to be entirely unique, one-of-a-kind pieces of work. Following that idea, NFT stands for “Non-Fungible Token” which entails that the token cannot be stolen or bought out with normal currency by keeping all transactions secure on a blockchain, a secure digital ledger, ideally making it truly unique in its existence—yet that’s where the issues begin.

The idea behind NFTs is to have them function like paintings in the real world, where there are original copies worth large amounts of money. They can be auctioned off but only one person owns the painting. The reality of NFTs is very different.

Cryptocurrency is not widely used for transactions online outside of crypto communities, let alone in the real world. Owning an NFT does not actually prevent anyone from using or saving the image as the blockchain platforms like Ethereum are not commonplace. Owning an NFT only gives you the rights to sell that copy of the image which, again, could simply be right-clicked and saved by anyone on the internet.

A toxic culture has engulfed Twitter especially as of late. With Twitter themselves confirming that they’re looking into integrating cryptocurrency into the platform, those opposed to the minting and sale of NFTs have lashed out in response. This, in turn, feeds into itself when those supporting NFTs fire back. NFTs can be made from any image, so artwork is frequently stolen for the sake of minting NFTs (especially in retaliation). Large accounts have been hacked and stolen as well, turned into crypto-focused profiles instead.

The online culture enveloping NFTs isn’t the only problem, though—the environment also suffers. In order to mint an NFT, a new “block” on the blockchain has to be created. In order to do this, a process called “mining” has to occur. A series of difficult computations must be completed in order to obtain a block which allows you to own cryptocurrency without putting in actual money. The transaction is then kept on the blockchain, verifying that you have that amount of cryptocurrency.

This process requires immense computing power, and the computations get progressively more intensive. In order to keep up consistent block output, more powerful and expensive computers are required, and some people even invest in multiple computers. The amount of energy consumed by this process is immense, with Ethereum estimated to use around 44.94 terawatt-hours of energy a year, a similar output to some small countries. Should cryptocurrency mining continue to grow in popularity, that energy consumption rate will only increase.

In addition to the caustic culture and harmful practices created by NFTs, cryptocurrency itself is very fickle. It fluctuates often, typically after a tweet from Elon Musk. The market is unreliable and has spawned a miasma of conflict that is bound to only spread should things continue as they are.