What are non-consumable (NFT) tokens?

What are non-consumable (NFT) tokens?

Non-consumable tokens (NFTs) are codes that demonstrate the authenticity of digital art and can be marketed for thousands of dollars.

NFT o Non-expendable tokens (Non-fungible file) are codes that are linked to some digital art, identifying it as the original and exclusive art. This artwork can be an image, a gif, a song, or some other type of digital file.

This term has gained increasing popularity and has affected various markets, such as the visual arts and music. For artists, NFTs are a new way to ensure the authorship and exclusivity of their works, as well as to monetize them and engage the public. For investors, the tokens they are digital assets that can be valued over time and with collective perception. For the environment, it is another source of impact with high energy costs and greenhouse gas emissions.

What is non-fungible testimony (NFT)?

Token is an electronic key, a physical device that generates a temporary password so that an individual can perform something, such as financial transactions, more securely. In the context of NFTs, “token” refers to the digital art record name. In turn, “non-expendable” means that the goods are unique and irreplaceable.

Therefore, the non-expendable tokens It works as a cryptographic seal and can be used to demonstrate the authenticity of assets in virtual environments. Some people define NFT as a kind of contract in the blockchain that guarantees that a certain file is original and that a certain person is officially its owner.

Many compare the non-expendable tokens to collectible cards, such as those collections from the sports stop or cartoons. Once you have a card, you can pick it up, sell it, or exchange it. All this depends on its rarity and the value that society attributed to it at the time.

At first glance, it is a somewhat abstract and complicated concept, so we must also understand its technological basis: the blockchain.

Blockchain

NFT is based on blockchain, the same technology that makes cryptocurrencies (like bitcoin) secure. The blockchain was described in 1991 as a way to validate digital documents over time, preventing them from being altered later and freeing them from counterfeiting. It was first used in 2009 by Satoshi Nakamoto, who created the digital cryptocurrency called bitcoin.

Blockchain works like a non-traditional database that can be accessed from any computer. Each new piece of information is stored in a new block that is linked to other existing blocks. This forms a blockchain with data called a blockchain.

The data is stored linearly and chronologically, always directed to the end of the chain. Each block has a code called a hash and also presents the hash of the block before it. The hash is created from a mathematical function that transforms digital information into a sequence of numbers and letters. Therefore, if a block is edited, the hash changes and the other blocks later become invalid.

This hash change is what makes technology harder to steal, but not impossible, so much so that cryptocurrencies have already been stolen. For a hacker to change a block, he has to change all the other blocks that come in sequence and he would need a more powerful computer than blockchain technology.

Most NFTs run from the so-called blockchain Ethereuma platform in which the cryptocurrency (Ether) equals BRL 11,944.04.

cryptoart

Jason Bailey, creator of the Artnome blog, says that the blogging chain affects the art market in four ways:

  • Boosting digital art sales through scarcity;
  • Democratize investment in the arts;
  • Reduction of counterfeiting;
  • Create a more ethical way to pay artists.

You non-expendable tokens it also gave rise to a new universe: that of cryptographic art, which are rare digital works of art associated with unique NFTs.

This leads us to question the real value of an image in the digital environment, as we can reproduce it countless times even through a screenshot. NFT is based on the idea of ​​digital scarcity, which allows you to buy and sell goods as if they were physical objects. The non-fungible testimony places the person as the owner of the digital asset. And this “property” cannot be copied, as it is protected by blockchain technology.

In the world of physical objects, such as works of art, this would be like having the original of a work or the artist’s signature. Everyone can have a copy or a replica, but only one person has the original of the work.

Various markets have sprung up for people to market NFT, such as OpenSea, Rarible, Grimes, and DADA, which functions as an online art gallery that allows works to be marketed.

Song

NFTs have expanded to other types of marketing and not just visual art. Music artists, for example, have also started using non-expendable tabs for their songs, albums, releases, and many other possibilities.

In Brazil, the musician André Abujamra sold one of the first Brazilian musical NFTs and is an ambassador for the Phonogram.me platform. It allows anyone to buy the NFT phonograms that the musicians will make available.

By purchasing an NFT from a particular phonogram, the person begins to have their pass, earning in addition to what is part of it. In other words, it works like an investment in music. If the phonogram is played on an online platform or on the radio, the owner of the NFT gets a share of the profits.

the era of memes

Non-consumable tokens are also used for memes. The famous Gat Nyanfor example, his gif was sold for 300 ETH, which equates to almost $ 450,000.

Other memes are being exchanged for thousands of dollars, which has become the creator of the Gat Nyan create the event called “Memeconomy” which is basically a meme auction.

In short, NFTs have spread through the innumerable possibilities of the digital universe and various markets have taken advantage of the tokens. Games have not been left out either and the possibility of collectible objects that can be valued over time is already being tested.

CryptoKitties is a game that has already been quite successful and has caused controversy. In it, users can buy unique digital cats and raise them in the blockchain. One of the most expensive cats cost about $ 170,000.

You non-expendable tokens bring a reflection on the real value of a digital good, after all, what makes us want to have something that can be easily reproduced? Everything indicates that the value of an NFT is defined according to the collective perception of its authenticity. It is the logic of scarcity and the need to possess something authentic and exclusive.

While pointing out benefits for artists, a new risk was also born: someone could create an NFT for the work even before the artist or even impersonate him. And the downside is not only that, there are also serious environmental impacts non-expendable tokens.

NFTs negatively impact the environment

NFTs consume a lot of energy. Major markets, such as Nifty Gateway and Superare, use cryptocurrency Ethereum which keeps a secure record of transactions through a process called mining, similar to the system that verifies bitcoins. This involves a network of computers and a lot of energy.

Several artists have put the debate first. Architect Precht created three digital works of art with the aim of selling them using blockchain technology, but gave up when he calculated what he would consume in electricity and found that it would be the equivalent of the energy he would use. in 20 years.

An article in Quartz highlighted the carbon footprint, showing that over its life cycle, an NFT can accumulate a footprint of 211 pounds of carbon dioxide, the equivalent of driving about 825 miles in a U.S. car. with engine to gasoline.

In an event promoted by Valérie Lemercier, filmmaker and singer, in which six non-expendable tokens8.7 megawatt-hours of power were consumed, equivalent to two years of power consumption from his study.

A friend of Lemercier’s, who helped her investigate the impacts of NFTs, created Cryptowart.WTF, which selects a piece of cryptographic art and provides a rough estimate of energy use and associated emissions.

Despite receiving a lot of criticism for blaming artists, in a way, the platform has made the debate over the impacts of NFTs stronger. As a result, many artists have increasingly sought and encouraged an eco-friendly way to negotiate and sell. non-expendable tokensthere is even a guide that describes and suggests processes and platforms to make NFTs less unsustainable.

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