Fans go ape for non-fungible tokens


Fair Use Image: Bored Ape Yacht Club

FUNKY MONKEY. Bored ape #8585 sold for $2.7 million or 696.969 ETH. The popularity of Yacht Club’s apes has only grown since the release of the first one in April 2021, with an average sale price of $300,000.

What does a Bored Ape Yacht Club Monkey and global warming have in common? NFTs.

Sophomore Rowan Hoffman said, “If you can make money off of that, good for you, but at the same time, mining crypto and that whole world is horrible for the environment.”

Hoffman has spent a great deal of time researching and discussing NFTs.

There is substantial confusion surrounding NFTs or non-fungible tokens because they require people to understand a complex system of cryptocurrencies and terms.

In the simplest definition, an NFT is the ownership of online information in the shape of an image, video, or audio recording.

The point of an NFT is not necessarily having access to it, though; it is the ownership rights. This is where blockchain comes into play. It works similarly to a bank, holding cryptocurrencies.

NFTs work as a cryptocurrency and the blockchain as a public record showing every exchange of money. The blockchain holds the proof that someone owns the token.

But this is the point where NFTs get more complicated because once someone owns an NFT, they can make back the money they invested and more by selling it under new conditions. For example, someone could put royalties on an NFT, which would mean that every time the NFT is sold in the future, the original owner would receive a small percent of the money.

NFTs become even more confusing when their negative impact on the environment comes into the equation. This is because the blockchain that keeps track of all of these transactions uses massive amounts of energy to store data.

If you can make money off of that, good for you, but at the same time, mining crypto and that whole world is horrible for the environment.”

— Rowan Hoffman

According to the Digiconomist’s Bitcoin Energy Consumption Index, Bitcoin’s energy consumption is estimated at just over 200 terawatt-hours. One TWh is equivalent to the output of one trillion watts for one hour.

While this specific data is for bitcoin, NFTs often use bitcoin or similar forms of online currency for the transactions. The energy used to buy, create, track and sell NFTs has to come from somewhere and greatly contributes to pollution because most of the energy comes from non-renewable energy sources.

Specifically because of this environmental impact, NFTs and their future have become widely polarizing.

While some see NFTs as a new form of cryptocurrency that could vastly change how money is perceived, others see NFTs as a step in the wrong direction, towards further harm to the environment.

“It’s like owning something, but everyone else uses it,” junior Ryan Spangler said.

While Spangler does not claim to be an expert, he does have a solid understanding of the debate on what NFTs are and what environmental implications they can have.

Both Hoffman and Spangler think that while there is a possibility to make money off of NFTs, they aren’t sure how sustainable the market will be in the long run.

While the future of NFTs is unknown and unpredictable, for the time being, they are a new and creative way to use cryptocurrency and make money on the internet.

Given the current state of the art industry due to the pandemic, NFTs have become a new venue for artists to sell and showcase art virtually. And while this could be an important benefit to NFTs, the way people view them because of their environmental impacts will greatly contribute to the future success or demise of the industry of NFTs.