#nftfordummies

What's an NFT? 

An NFT is a Non-Fungible Token, and exists purely online. Each NFT is unique and unable to be replaced by anything else. For example, a £5 note is fungible, as you can trade it for another £5 note and have exactly the same thing. An autographed one-of-a-kind painting, however, is non-fungible. If you traded it for another painting, you'd have something completely different: your one-of-a-kind signed Van Gogh has been replaced by the neighbour's kid's drawing of their dog which, fantastic, but it's not the same.

What's an NFT used for?

Having such a unique token means it can act as a serial number. It can then be attached to anything digital such as artwork, music, a video, or the plans to 3D print a car in defiance of those 'you wouldn't download a car' VHS adverts from the 90s. It's in the news right now for being used to sell digital art: limited edition runs of NFTs are being issued, so even though every picture of that cat with the melon on its head looks the same, a small number of people can claim they 'own' it because they have an NFT saying that they do. Why? Largely as a collectors item, since there is no set monetary value other than what people are willing to pay.

Why does this concern me, who lives on this planet and wants it to keep existing?

The problem is that the way people keep track of NFTs uses a huge amount of energy.

How?

A master list of NFTs are stored on blockchain, which is a specific kind of database, and it's decentralised with no one owner and there are many copies. Blockchain is mostly used as a ledger for transactions, because once information has been entered it cannot be deleted. The blockchain we care about is the Ethereum blockchain, which is not the only way to do it, but it’s the current popular standard. Each transaction uses 48.14 kWh. To put that into context, 1 kWh boils a kettle 10 times. The average British household uses just over 10 kWh per day. The Ethereum blockchain has thousands of submissions daily.