NFT: Risks to Artists and the Environment

Picture: Marco Verch

Techspace - Blockchain technology introduced NFT (Non-Fungible Token) as a new digital asset. The NFT, which is currently undergoing an early stage of development, certainly still has things that need to be improved. The initial period of technological development is the most challenging phase, and this is also the case with NFT.

Plagiarism and Identity Theft

NFTs' exclusivity and rarity are valuable because there is only one in the world. NFT is often considered a solution to plagiarism. However, it is essential to note that the issue of plagiarism will always exist because the artwork uploaded and shown to the public is a finished work of art that is ready for sale. No one knows what goes on behind the process of creating a work of art. 

Picture: Token Information 

Other concerns the NFT will need to navigate to drive its adoption include public awareness and regulation. In principle, NFT is a simple mechanism for determining digital content ownership. This process revolves around smart contracts providing digital signatures to digital content. There are no mechanisms to deal with digital piracy or fraudsters posing as certain artists. In addition, the innovative contract technology in Blockchain is still in the early stages of development. Smart contracts validate the authenticity of a digital asset before it is converted into a token, as are the terms and conditions to determine whether the digital support is genuine or not. 

Anyone can create an NFT on anything and sell it on the marketplace. Therefore, people interested in buying NFT should be careful and combine NFT with the concept of decentralized finance (DeFi). Because DeFi can provide liquidity to NFTs using high-quality and widely recognized NFT assets. Soon, the government may have to revise the existing regulations to incorporate NFT into the Copyright Law. An NFT is considered genuine when it is the first to be tokenized and recorded on the Blockchain. Under the Copyright Act, a creation is automatically protected upon publication; the work does not need to be registered.

In addition, if someone buys NFT from a particular marketplace, the purchased NFT will only be stored in the wallet in that marketplace. There is no decentralized NFT storage mechanism. This creates a centralization problem, where hackers can manipulate users into giving up their credentials, then accessing our accounts.

Carbon Emissions Disrupt the Environment

Picture: Be In Crypto

The next concern is the environmental issues that plague blockchain technology. NFT relies heavily on Blockchain, while Blockchain can only run with sizeable electrical power. Carbon emissions from mining and 'printing' cryptocurrencies are already a disaster. The more computers connected to the Blockchain, the more energy it takes to complete a transaction because each computer has to verify the transaction. Electricity plays a decisive role in mining. Cities or countries with low electricity rates are ideal places to mine cryptocurrencies—extra points for a city with cold weather and a fast Internet connection. Cold weather can reduce air conditioning costs to prevent mining hardware from overheating. 

As reported by VICE, NFT artist Memo Akten revealed that the Ethereum-based NFT minting process requires 142 kWh of energy. Using 1 kWh of electricity alone has released 0.38 kilograms of carbon dioxide into the air. When multiplied by the amount of energy per NFT transaction, the CO2 produced from the manufacture of NFT reaches 54 kg. In addition, this amount is even 6.16 times higher than the CO2 emissions of burning a gallon of gasoline on a vehicle. Many environmental activists call for the system's transformation to be free of carbon emissions.

However, although NFT is considered to have many shortcomings for artists and the environment, public interest in NFT is still increasing.

What is a Smart Contract? Here's a Beginner's Guide

teknologi id bookmark icon

Leave a comment