The biggest hype in the current cryptocurrency market is this concept known as a non-fungible token. While looking rather complex on the surface, the concept behind them is rather simple. One can own the digital rights to a digital product as opposed to owning the physical item. As a result of this craze, digital artworks have been bought and sold for colossal prices, making many people millionaires in the process. Nonetheless, it could be argued that this NFT craze will not last. Read on now for four key reasons why.
Environmental Impact
The environmental impact of NFTs is rather staggering. It is estimated that the average piece of NFT art uses more electricity than the average person in the EU over an entire month. While there may be a way for the environmental impact to be cut down or a similar technology that is eco-friendly to emerge, in their current form it is likely that they will be subject to hefty regulations, perhaps only existing in the most morally flexible of territories around the world.
Lack of Intrinsic Value
A digital artwork has no intrinsic value in your life. You can just download a JPG of that same image and have a copy yourself. You simply own the rights to the picture. It’s unlikely that people are buying this art for its actual merit, like a genuine painting by an old master such as Monet or Cezanne. As this intrinsic value is compromised, NFTs will have a hard time making a genuine impact within the art world.
As a result, the industry is basically a bubble, like the dot com boom. That’s why many experts predict that there may be a significant crash, with many people potentially losing a huge amount of their hard-earned savings in the process. That’s why NFTs might not be as valuable as following genuine crypto trading signals from experts in the cryptocurrency industry.
Criticism from the Art World
While it is true that auction houses have joined in on the NFT craze, there are many critics within the art world who see it a devaluing of what makes art special in the first place. It could be argued that NFTs aren’t truly about the art itself, but a way of artificially creating wealth for the very few. If this criticism persists, NFTs could end up lasting for a very short time indeed.
Lack of Broader Understanding
If you ask the average person in the street about an NFT, the chances are that they have no idea what you are talking about. This presents a difficult barrier when it comes to broader adoption. While NFTs may gain more mainstream acceptance like bitcoin, its predecessor is still yet to be accepted as a medium of exchange in most places, giving NFTs an even bigger barrier to clear. Additionally, the difficulty of getting your account registered and figuring out how to use cryptos to buy one is probably too cumbersome for the average person to achieve, making it hard to imagine further successes.
