What is an NFT?
An NFT, which stands for “non-fungible token,” is a way to digitally own content, including digital art, viral videos and even tweets. According to Forbes, “NFTs are like a physical collector’s item, only digital.”
Ethereum blockchains, which are digital databases, keep a log of every transaction of a particular NFT. It is on these blockchains that it records who owns the NFT, making it a one-of-a-kind collectible.
When were NFTs first created?
In 2014, Kevin McCoy, a digital artist, minted the first-known NFT, “Quantum.” This was the first unique, digital work of art to be put on the blockchain. While NFTs have been around since 2014 and experienced a boom in 2017 and 2018, they exploded into mainstream popularity in 2021.
Why are NFTs so popular now?
According to CNBC, “The increased momentum for these tokens comes as bitcoin and other cryptocurrencies have rallied significantly in recent months, and at a time when people are spending more of their time indoors due to coronavirus restrictions.”
What is the difference between NFTs and cryptocurrency?
While both NFTs and cryptocurrency use blockchains, cryptocurrency is “fungible,” whereas NFTs are “non-fungible.” This means that one crypto token has the same value as the next and can be traded or exchanged. NFTs are not equal in value to one another, and therefore cannot be exchanged in the same way as a cryptocurrency.
How do NFTs affect the environment?
NFTs are harmful to the environment as blockchain technology uses a large amount of energy and generates a sizable carbon footprint. Ethereum blockchains consume the same amount of energy annually as entire countries, like Qatar and Hungary, and produce the same carbon emissions as Sudan, according to CBS News.