Irreplaceable tokens. NFTs. What are they? Tokens representing digital property. Proof that you own something. But, like any piece of digital content on the web, what prevents the banality of “possession” when an online idler right-clicks your product? This this is a question that confuses many, many people online, along with the question “does having NFT mean that you hate the environment?”
Windows Central has tried to answer these indispensable questions with the help of experts. Spoiler: There’s more to this topic than Twitter mobs might believe.
Not so different
Source: Her Majesty’s Treasury
“NFTs are so stupid. You can just right-click,” some people say. This is quite true: if all you value in visual NFT is the image itself, not the ownership, then yes, NFT is a ridiculous and stupid investment. However, if you really need to prove ownership, then things get a little less trivial.
We already are to pay for .jpg files and the like. Getty Images? Shutterstock? They embody the same basic philosophy as NFT: any company that doesn’t want to risk going to court pays for the simple right to use a few kilobytes of images. Little people who aren’t big enough to sue, just right-click and move on. See the overlay with irreplaceable markers?
Angela Sag, senior analyst at Moor Insights & Strategy, agreed that there are similarities between existing licensing models and what we have seen regarding NFT. However, he noted the clear attributes of the new technology.
“I think the big difference is that having these transactions in a blockchain makes them easier to track and verify once the transaction has taken place, and the original creator doesn’t need to keep a local record of all transactions to verify ownership and authenticity,” he said.
More than meets eye
The thugs right-click the world’s first NFT (1899, color).Source: Rockstar Games
However, it is not only convenience that puts NFT in its category. There are aspects of technology that can uniquely benefit creators. “For example, many of these image licensing firms do not fully reward the original creator for the total revenue that the licensing organization can derive from the image,” Seg said. “The little creator has to negotiate (and be able to negotiate) a certain rate with the licensing organization, not just set their own terms on the open market and allow anyone who wants to buy their work to do so on a smart contract basis.”
Sag also stressed that the images are the tip of the iceberg and should not define NFT technology. Non-replaceable tokens are not a right-click situation, as it is harder to copy a 3D object or a specific audio file. In other words, depending on what is being sold, stealing can be difficult.
Excellent Gartner vice-analyst Aviva Litan highlighted similar points with Sag, reiterating that NFTs come in a variety of forms and provide creators with unique capabilities that are not often afforded by classic licensing models. Similarly, Litan noted that if anyone wants proper ownership of NFT, a blockchain-based contract is important (so right-clicking is prohibited for large businesses that have to work according to books). However, the duty to sue the creator if his property is stolen still rests on how existing digital content services must manually prosecute parties who use their works without permission.
Intersection of medium and savings
Source: Windows Central
In addition to the above topics, over NFT hangs another big question: are they harmful to the environment, and if so, as harmful?
“Bitcoin cannot support NFTs because they are essentially smart contracts, and bitcoin does not support smart contracts,” Litan said. “On the other hand, Ethereum does support the vast majority of NFT. Ethereum is moving to use this year’s Proof of Stake (2022) consensus algorithm, which uses a modest amount of energy, so the whole energy argument against NFT will be controversial. Further, other blockchains that support NFT (such as Solana and Ronin) do not use Proof of Work, but use Proof of Stake or Proof of Authority.
Right now, Bitcoin and Ethereum are using the Proof of Work model, which is an energy consumption algorithm that causes a lot of noise around NFT. As Litan points out, irreplaceable tokens will soon be released from this conversation as soon as Ethereum is shipped. There are many resources available if you want to learn more about Solana and blockchain technology in general.
“NFTs consume much less energy than cryptocurrencies, but there are some connections in the sense that some of these NFTs rely on crypto-blockchains, such as ETH, for their transactions, linking them to discussing energy consumption,” Sag said. before highlighting alternatives. for those concerned about the impact of their actions on the environment. “Switching blockchains to Proof of Stake from Proof of Work is another way to save on energy consumption. Palm is a very popular blockchain for NFT and claims 99.9% energy savings over Proof of Work blockchains, which alleviates concerns about NFT consuming too much energy on the back of cryptocurrencies like Ethereum. ”
If Palm seems familiar, recall that Microsoft’s M12 recently helped Palm NFT Studio in the finance department. In other words: some big parties are paying attention to Palm.
NFT Debate, p summary
Source: Android Central
To reduce the irreplaceable tremor to its essence, here’s what: many people oversimplify NFT and ignore the fact that they’re not defined by easily copied images. In many ways, they are an evolution of existing licensing services, with which large corporations are already playing with the ball, but made with new technologies and armed with more potential benefits for creators.
Although the stupider NFT projects are angering for good reason, the technology as a whole is still in its infancy. We don’t know what might happen, so directly rejecting NFTs and their wide range of usage scenarios is at least premature. Time will tell whether they will replace the existing services used for similar functions, but for now it is better to see where the dust settles than to join the battle of Twitter mobs against crypto brothers.
As noted in the Gartner 2021 Hype Cycle for Emerging Technologies report, “NFTs have not yet demonstrated robust business models and monetization for content creators, vendors and buyers, meaning that implementation is currently small.” The full implementation of this technology is still ahead, and new barriers for creators and buyers are still emerging. But under this noise lies a basic concept that may eventually be useful for the future of digital property.