In the past few years, the craze for non-fungible tokens (NFTs) has literally exploded. Before we get into the detail, we need to understand the meaning of NFTs. An NFT is a data unit stored on a blockchain and represents audio, video, photos, and other kinds of digital assets.
The field of NFTs has grown to become a popular segment of the cryptocurrencies sphere, and its utility in providing unique identities to the digital arts is simply awesome. No Surprise, NFTs are increasingly becoming a favorite among investors, and by the day, their popularity is gaining momentum even among corporate houses.
In addition to individual investors, large corporations have also started testing the waters for NFTs. For instance, eBay Inc., which has now allowed the sale of NFTs on its platform. Giving specific details about this development, the company’s Senior Vice President confirmed that the organization is working on expanding its capabilities to accommodate sales of NFTs on its platform.
This is in line with the growing trend of selling blockchain-based collectibles that range from memes, stories, pictures, and newspaper columns. This decision has been taken keeping in mind the revenue potential of the move and its ability to draw in more prospective buyers/sellers to the platform.
As much as we admire the protection provided by NFTs to digital arts, the environmental impact of these tokens is harmful to the ecosystem. This is primarily because of the consensus mechanism of the blockchain network that NFTs are based on. One of the prominent blockchain networks globally, Ethereum works on the Proof-of-Work consensus, which requires a huge amount of electricity to operate and implement the mechanisms.
If this electricity comes from non-renewable resources, then it will have a large carbon footprint. This, in turn, will add to the pressure on the environment, and hence, NFTs functioning could lead to degradation of our ecological sphere. However, there is an alternative in the form of using blockchain networks that works on the proof-of-stake consensus mechanism. This mechanism has zero carbon footprints and can be used to propagate the NFTs and other digital assets.
NFTs are gaining popularity across the globe and in time, it is expected to become even more popular. We can minimize the negative impact of NFTs by choosing an environment-friendly blockchain network. By doing so, we can derive the best of both worlds – protection to digital assets and that too without harmful environmental impacts.