Why Everyone Is Wrong About NFTs
NFTs are ‘Finally — Totally Worthless’, according to a recent RollingStone article. Everyone outside the world of crypto and NFTs, probably agreed with the headline and, without thinking twice, moved on to the next article. Many other news outlets took the opportunity to get some clicks and joined in on the fun, citing numbers about energy consumption and drawing peculiar conclusions. The articles were written after a report came out from dappGambl, which analyzed the current state of the NFT market. Let’s take a look at some of the observations and conclusions from that article.Reading ‘2048 homes’ immediately makes you think of a massive amount of energy. Because houses are big and 2048 is a big number. Upon closer examination, it becomes evident that the energy requirement is, in fact, rather modest. This is because the comparison is uneven: the energy needed to mint all 195,699 NFT collections is a one-time occurrence, whereas the emissions from houses are ongoing and annual. Convert ‘yearly’ to ‘decade’ and we would be talking about 205 homes instead of 2048. Feels very different, doesn’t it? As each year goes by, the NFT collections continue to exist, and the “yearly emissions” decrease. Picture this: if these 195,699 NFT collections were to exist for 100 years, and then, a catastrophic asteroid struck our planet, causing a mass extinction. During the entire lifespan of all NFT collections created up to this point, the annual emissions would be equivalent to that of just 21 homes. Where I’m from, 21 homes wouldn’t even form a proper street.NFTs are bought using ETH, not dollars. ETH traded around $3.200 at the end of August compared to $1.800 in July. This alone is a 44% drop in price, which has nothing to do with NFTs. Comparing the trading volume in ETH would paint a more honest picture. But more importantly, evaluating the situation by comparing the lowest with the highest performing week doesn’t provide an accurate representation. It is misleading.
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