NFTs spur new age of digital millionaires

Launched in 2015, Ethereum was created by Vitalik Buterin and Joe Lubin as a blockchain technology. As of March 7, Ethereum is currently priced at $2,597.44 and is the most common cryptocurrency used to purchase NFTs.

Yasmin Dominguez

Launched in 2015, Ethereum was created by Vitalik Buterin and Joe Lubin as a blockchain technology. As of March 7, Ethereum is currently priced at $2,597.44 and is the most common cryptocurrency used to purchase NFTs.

Sara Price, Staff Writer

Funny monkey images are now officially owned by techies, gurus, and Jimmy Fallon. 

Non-fungible tokens (NFTs) is a phrase that many have heard about in the past few months, yet very few people understand what they are. What once started as a way to share digital art has exploded into a marketplace that has opened up a new frontier of digital ownership.

“NFT stands for non-fungible token, which basically means that it’s a one-of-a-kind digital asset that belongs to you and only you,” explained an article by Fortune magazine. “The most popular NFTs right now include artwork and music, but can also include videos and even tweets.”

NFTs are bought, sold, and stored in blockchain,  which is a system of computers used to record information. Blockchains can almost never be stolen or hacked, meaning that you cannot claim ownership of NFT’s without a digital certificate. 

“I think as a world we are moving towards a more digital currency,” remarked personal finance teacher Mr. Blaszczyk. “Once the government realizes how much money is being traded back and forth and their ability to tax that money, it will put an end to a lot of under-the-table jobs, especially for teenagers that get paid cash.”

NFTs are most commonly traded on a website called Opensea.io and are bought with Ethereum, a cryptocurrency similar to Bitcoin. NFTs vary heavily in price, with some going for as low as 0.01 Ethereum ($25) and others from the more popular collections like Bored Ape Yacht Club NFTs recently reaching a floor price of 100 Ethereum ($276,000). 

“[NFTs] are expensive,” said junior Josh Charles. “I can get rich and Logan Paul buys a lot of them. My favorite is the Bored Ape.” 

While collections of colorful ape drawings bought by celebrities ranging from Stephen Curry to Jimmy Fallon may make some doubt the value of NFTs, many others see the potential that NFTs and cryptocurrency technology has to make lives better. For instance, NFTs can be used to keep track of things such as medical records, documentation, land deeds, and any proof of ownership through smart contracts that are stored on blockchain. 

Even with all these benefits and with the popularity of NFTs many people still do not fully grasp the concept of what it really is. 

“NFTs are a form of cryptocurrency, they are not a form of liquid currency,” explained 11th grader Jackson Wilder. “And they are valued in Ethereum.”

Although some individuals understand the purpose of NFTs, many know what they were but do not fully understand the concept. This lack of understanding has led to many misconceptions surrounding them. 

One misconception is that the digital photos sold as NFTs are worthless since people can simply “save” these photos onto their devices. NFTs have a value that is set by the market and many other factors. People cannot falsely claim NFTs as their own because when they do they are only saving the image or video in question, not the metadata or digital certificate that is used to prove your ownership of said NFTs. 

Another misconception is that all NFTs are a scam, which is not necessarily true. NFT projects themselves are not a scam; however, the ease of access and hype around them has made it easier for sketchy groups to try and swindle customers. 

Blockverse was an NFT project depicting different characters from the video game Minecraft. The collection included 10,000 NFTs at a floor price of 0.5 Ethereum ($124) each and they all sold out in a matter of 8 minutes. A few days later, the creators vanished and deleted their discord and website, stealing over 1.2 million dollars of Ethereum. 

This is not the only negative thing to come out of the crypto world. NFTs have been shown to be detrimental to the real-world environment. With thousands upon thousands of transactions made on the blockchain every day, just one computer mining cryptocurrency uses an exorbitant level of electricity, which leads to negative global impacts.

According to the New York Times, in August of 2021, the digital currency Bitcoin’s electricity usage reached higher than Chile and Finland. Even though the currency could once be easily mined with a simple home computer, it now takes warehouses of thousand dollar computers powered by fossil fuels to mine a single Bitcoin. 

 “Creating the 300 items of digital art that he had planned to sell, 100 each of three art pieces, would have burned through the same amount of electricity that an average European would otherwise use in two decades,” said Chris Precht, co-founder of architectural studios Precht and Pend.

According to Earth.org, “Digiconomist estimates a single Ethereum transaction’s carbon footprint at 33.4kg CO2, while artist programmer Memo Akten estimates that an average transaction specifically for NFTs has a carbon footprint of 48 kg CO2.” These gas emissions coming from NFTs are contributing to the already ongoing climate change crisis on our planet.

Whether used for bad or good, NFTs seem to be making a massive impact on society. This technology has a lot of potential; however, the scams, negative press, and decentralized nature of NFTs make it difficult for genuine investors to find interest in this new technology. The future of this technology may be in jeopardy if they do not make new advancements in the technology and are more environmentally friendly.