NFTs in plain English:
You know what a certificate of authenticity is for a physical piece of art? Like, a chain of documented ownership that can be used to prove your art is the original and not a copy?
NFTs are like that, except for digital assets. They use cryptographic wizardry to provide a means of proof that a copy of a digital file that you have on your computer was issued to you by an authorised holder, who was in turn issued their copy by an authorised holder, all the way back to the file’s original author.
To be clear, there’s absolutely nothing stopping you from making unauthorised copies of an NFT, in the same way that there’s nothing stopping you from printing out a photo of the Mona Lisa. All this system does is provide proof of authorised ownership.
This actually has some practical applications; for example, in online gaming, it can be used to create a relatively foolproof means of detecting item duping, and of figuring out who has the legit item and who has the dupe when such exploits occur.
For digital art it’s 100% a bragging rights thing and has no real, practical value.
There are several problems with this.
First, the terms of service for most existing NFT exchanges are deeply exploitative for both the artist and the buyer, and there’s a fairly solid argument to be made that their main goal is to provide money laundering services rather than to exchange digital art.
(This is not, of course, a new thing; there’s a fairly solid argument to be made that that all high-end art collecting is a money laundering scheme.)
Second, most NFT exchanges make absolutely no effort to verify that the person attaching an NFT to a particular digital file is actually that file’s author.
This means that NFT exchanges have a rampant problem with uncredited or falsely credited art being circulated as high-value collectibles. Again, there’s an argument to be made that this is by design.
Finally, there’s the environmental impact to consider.
NFTs require cryptography.
Cryptography is math.
Doing math with a computer takes processing power.
Processing power consumes electricity.
The math that produces the particular kind of NFTs that all the hubbub is about has deliberately been made very, very inefficient to carry out. In theory, this makes them harder to counterfeit.
(Whether this is actually true, and what other, less energy intensive mechanisms could be used to achieve the same result, is a whole other post!)
The amount of processing involved in issuing these particular NFTs is so brain-fuckingly huge that it’s effectively impossible to do it using a home computer – it has to be contracted out to specialised server farms.
The upshot is that every NFT that’s issued causes the server farms that produce them to consume vast amounts of electricity, with the associated environmental costs.
It’s only a slight exaggeration to say that the present NFT art craze provides a means for private individuals to have the kind of environmental impact normally associated with large corporations.
If this whole business is starting to sound like a scheme a Captain Planet villain would come up with, now you’re catching on!
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