November 27, 2022

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Nft: A speculative bubble with a significant environmental impact | Melina Gabanelli

Nft, standing for a non-fungible token, is all the rage. The commodity can be easily exchanged for something else: 100 euro banknotes are equal to the value of all other banknotes of the same type, and they can be exchanged for 50 and 10 coins without losing their value. On the other hand, non-fungible, a commodity that cannot be exchanged for something else. Irreplaceable Token is the deed of ownership and certification of cryptographic authenticity of a single asset in digital form, with a guarantee blockchain, which performs the function of the digital public record. It can be sold or bought through a the shop (equivalent to a commerce site) that uses cryptocurrency only for transactions. usuallyEthereum.


The idea was born in the art world

Nft was born in 2014 into the art world to bypass gallery owners and auction houses and sell directly, making sure that the artist gets a commission from each transfer of ownership (generally around 10%). Thus the higher the value, the higher the commission. The first work ever written in Nft . format Every day: the first 5,000 days. digital artist PebbleEvery day for 13 years, he’d create a digital photo and then compile a file 5 thousand pieces in maxi jpg Which was auctioned by Christie’s in 2021 (on the market open sea) Good $69 million.

Those who paid this amount did not receive a hard copy, but a digital certificate proving ownership of the original work

NFTs have become a source of income for museums or collectors. For example the company cinil has been associated with a Digital reproduction of Doni Tondo by Michelangelo Buonarroti, in a limited series. The standard and unique original work of the Uffizi is always on display in Florence, which was able to bring in some useful money for the museum itself.


… and then spread to everything

From the world of art, NFT has spread to all fields. The genius is to animate a mechanism that creates rarity and guarantees properties uniqueness of an assetphysical, digital, technical or non-technical. In the non-digital world there is a natural scarcity and every iteration of any non-digital object costs and does not exactly match the original. However, in the digital world, the original and copy cannot be distinguishedIt is, therefore, available to everyone, without natural costs. Artificial scarcity had to be introduced where natural abundance exists instead.

Steps to create, sell or buy an NFT

To create an account in the Market, you must have a wallet (Digital wallet) and buy cryptocurrency in a file exchangea service that allows you to change an official currency into a cryptocurrency and vice versa. Metamsk One of the most widely used cryptocurrency wallets, for example open sea The most popular market platform. At every stage you pay commissions, even very high ones. The most used cryptocurrency for NFT trading isEthereum.

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When Nike and Adidas produce a new shoe model they associate the NFT with. You buy physical and virtual shoes. With physical things that go for a walk in the real world, with virtual ones in the Metaverse and only you (and the few others who have paid a fortune for those NFTs) can do that. In short, new frontiers entice young people, collectors and artists. Everyone is attracted to the possibility of doing business without intermediaries in the way. In fact Mediation just turned From traditional brokers (auction houses and gallery owners) to platforms and a long list of new players. We see.

De-mediation and data retention

Cryptocurrency bypasses countries that issue moneyand the banks through which transactions pass. Warranty assures you blockchain, and possession of the cryptocurrency identified by a long cryptographic chain that the holder must keep in a safe place. If he loses it, no one will be able in any way to get it back on the blockchain, so the availability of the cryptocurrency in his digital wallet is lost forever. It is estimated that more than 20% of the current cryptocurrency is no longer due for payment Because the owner has lost his credentials, or if he takes them with him to move on to a better life.

new brokers

New brokers have emerged around NFTs: telecom companies, consulting or experts who advise those who want to conduct an NFT ul on how to do it, what to do, and how to launch it. Good to know that Nft was launched first (Drops), and only when someone buys it will it be minted and end up in the blockchain. Since there is a real frenzy about buying NFTs, some sites even provide avatars Tips on how to act while jumpingFor example: avoid launches that don’t fit your budget, or: avoid buying launches just because they are cheap.

If an unknown artist, without appropriate image noise, his NFT will remain dead and not be purchased from the market where he created it, just as it happens to a painting by an unknown artist. And then someone has to do the digital files to associate Nft with. Pfeiffer A service agency that recruited artists to create some works which were then associated with NFT selling them astrological characters; In fact, these artists were paid a few euros to make some parts, and they would pay nothing from the sales. Who buys what’s in hand instead? Nothing physical, but digital ownership of a digital copy. And how long does an NFT last over time? Because the digital world consists of rapidly aging software and hardware.
Copyrights

Anyone can do NFT on anything and anyone, but to give up the rights to something, you have to keep them. Orthopedic specialist in hospital Georges Pompidou Paris put up for sale the NFT of an X-ray of a woman infected with Al Bataclan. Report it directly to the person concernedthe hospital refers the doctor to court, and the platform that I put up for sale for $2,700 in Ethereum pull it off. Hermes Instead sue the digital artist Mason Rothschild for creating a file Unbeknownst to Hermes and NFT on Birkin bags. The legal path is very long and lawsuits are very difficult to win because the world of international NFTs and the legal framework that regulates them is not defined. Meanwhile, who bought the digital version of Birkin e Spend from 4 to 40 thousand dollars (Depending on the model) He certainly can’t hope to resell it.


Fraud drowns out deception

The largest Nft platform with thousands of users, OpenSeahad to suspend all sales for a while, after the owner of a group of monkeys NFT . got bored I reported the theft: the value $2.2 million. The issue of the security of these platforms is exploding. Stolen, fake or unwanted NFTs are so many that even the platform Cent was forced to press the pause button for a while. The On the other hand, the British tax authorities confiscated three NFTs for the first time As part of the VAT fraud case for 1.4 million pounds With fake accounts and identities, the alarm has sounded: the huge publicity circulating around this online trading attracts a large number of inexperienced investors. Investors who are only fooled by NFTs: From the Chainalysis report in 2021 Stolen counterfeit platforms selling cryptocurrency 14 billion dollars. Again according to the research firm decomposition In 2021, the NFT market was swirling around 44 billion dollars.

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A market that feeds on mass madness, and few know its mechanisms. In this regard, the story of Flavio Beni on Republic. The only thing that is certain is that it is a speculative tool where one person becomes very wealthy and many other people with matching will still be on hand. In the meantime, there is a cost we all pay: the environmental cost.

Environmental impact of NFT from birth to sale

I noticed that producing cryptocurrency consumes a lot of electricity (Thousands of maxi computers working day and night). But it also consumes the blockchain on which the NFTs are located. ribbed One of the block chains on which NFTs are issued EthereumIt is considered the most sustainable. February 3, 2022 – Calculated by digital world – which he realizes Ethereum consumption indicator – that 3.7 million deals You have selected the polygon 1,598 tons of carbon dioxidethis means 430 grams per transaction2100 times more than expected. So much so that the WWF has suspended its founding campaign on Polygon. in a year Ethereum consume more than 50TWh of electricity (eg Portugal) and production 32 million tons of carbon dioxide Equivalent.


So the question arises: With the energy crisis we are going through and the drama of climate change, should we produce cryptocurrency to pay the ransom, boost recycling and burst the speculative NFT bubble?

It is interesting to know how mining worksThat is, the entire process of creating new cryptocurrency units and validating transactions on the blockchain has changed in the past year.


Previously, the bulk of business was done in ChinaWhere the electricity used was that produced by coal and at the lowest cost. Then China banned them. in Global mining map updated in January 2022 It is clear that the activities have shifted from China to Kazakhstan And from May 2021 in Uses.

Giovanna Sessa – Professor at the STIET Doctoral School at the University of Genoa collaborated

July 13, 2022 | 07:33

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