Hey, Im Julin and this is FutureNow. Imaginea world in which people are buying and selling digital prowes, digital trading placards, and evendigital country. Well, youre already living in it, all of that and more is being done with NFTs.Youre either in the know and have been into NFTs for months or even times, or youve suddenlynoticed that everyones talking about them, or you have no idea what Im talking about.If youre in that last camp youre gonna want to stick around because youre going to behearing a lot more about NFTs in the near future.Okay so what does NFT even mean? It stands forNon-Fungible Token , not as catchy. Non-fungible implies something that has a unique value attributedto it, as opposed to something fungible. In most cases, a dollar bill is fungible, because if Ihave a dollar and you have a dollar and we sell, we both still have a dollar that is just asvaluable. I said in most cases, because some coin is collectible and uncommon, at which point it becomesnon-fungible. Cryptocurrencies like Bitcoin are perhaps even more fungible because unlike physicalmoney, a Bitcoin cant become a collectible. A dollar bill could have some sort of misprint orbe from a specific year that is highly valuable and collectible, but a Bitcoin is just some datain a computer and it will always be worth just as much as another Bitcoin.Thats fungibility. Morecommon examples of non-fungible entries are things like a uncommon Pokmon card, the year it was acquired, whether it is possible its holographic, the condition its in, and even previous conspicuous proprietors areall important factors in the value of the card. Okay so thats what the non-fungible partmeans, but whats a clue? That area precisely means that it represents some sort of value.Poker microchips are a great example of a token, you can turn them in at a casino forcash. The same vanishes for talent posters and even cryptocurrencies themselves likeBitcoin, and like Bitcoin, NFTs are digital. So an NFT is a digital itemthat is unique and hampers significance that you can exchange with somebody else for fund. Likewise like Bitcoin, NFTs are bought and soldon the blockchain, although on the Ethereum blockchain. Youve probably heard of blockchaintechnology and its decentralized nature. The blockchain is essentially a digital ledger thatkeeps a record of every transaction that is made and that information is held on multiple computersacross a network of computers, rather than in one single place.And because all this information isviewable publicly by anyone and its not possible to change it, it clears fraud nearly impossible.You know that the NFT youre buying is authentic, unlike say a Pokmon card that is much moredifficult to verify and easier to create forges of. Sure you can send it off to an expert thirdparty, but that takes a lot more time and money. Meanwhile this verification isdone in seconds on the blockchain. So you may be thinking that digital assets arenta novel thing, heck you certainly once own some! Most video games these days are chock fullof the stuff, most famously in the form of surfaces, like in Fortnite. Skins are basically appearancechanges for your courage that you can buy in the game. Similarly plays like Runescapelet you buy cosmetic pieces and super uncommon components that are worth a lot in video games. Othercommon digital assets are concert tickets.You buy them on Ticketmaster and pay some exorbitantconvenience costs. But you cant sell those tickets outside of Ticketmaster. And similarly you cantbuy and sell Fortnite surfaces with other musicians outside of video games and you dont ever actually ownthem, video games makes could remove them at any point. These are all unified interactionscontrolled by these individual scaffolds. And in fact one of the first, and probablymost famous implementations of NFTs was a game called CryptoKitties. The premiseof the game is pretty simple, you can buy, sell, and multiplied virtual “cat-o-nine-tails” that comein all sorts of different images. Each cat is an NFT on the blockchain, meaningeven video games developers cant take away or conversion your CryptoKitty formerly you have it.Thereare about 4 billion possible types of felines thanks to the multitude of mannerisms “thats been” coded intothem, or cattributes as they call them. Some are rarer and more coveted than others. Honestlyit reminds me a lot of when I represented Neopets. In Neopets, there were paintbrushes you could buyin the game expending Neopoints, the in-game currency, that would change the appearance of your Neopet.Some were fairly basic, like a blue-blooded paintbrush that get for a few cases thousands neopoints, butothers were some of the most expensive and rare pieces in the game like the Stealthy paintbrushwhich could go for millions of Neopoints. Well, in the CryptoKitties macrocosm, some ofthese felines have sold for over $100,000. Thats real fund , not game money. It seemstotally wild that what is essentially a digital folder of an image of a charming cat can be soldfor that much money, or even any fund at all. Were used to being able to copy any digitalfiles we want and share them with friends. If I have an image on my computer and Iwant to send it to a friend, I can exactly affect share on the file and Airdrop it to a friendor textbook it to them or share it through Google Drive or Dropbox or something.But in all of thosesituations, I still have my emulate on my computer. With CryptoKitties and other NFTs, if you givesomeone else your NFT, you no longer have it. Sure, you can send someone theimage of the “cat-o-nine-tail”, if you crave, but what actually registers ownership is the codebehind that likenes that is only on the blockchain. And so NFTs have become a way to create scarcityout of digital goods, something that simply didnt exist before. Its what performed piracy such a massiveproblem for record names and film business. Before the internet, if you bought a hard copyof an book or a movie it was much harder to make a copy and give it to a friend. If you afford afriend your prized copy of Princess Bride on VHS, they now had it and you didnt.Obviously, these days you can just send someone an MP4 file of the movie oreven a link to stream it online somewhere. This digital dearth has alloweddigital records, NFTs, to demand actually high prices just like Pokmon cards, Beanie Child, and other physical collectibles.And perhaps my favorite usage of NFTs is for artiststhat can create digital art or photographs and sell them as NFTs online as unique originals justas they might sell at a real-world art gallery. But even more awesome is that the codeof NFTs and the facts of the case that every sale is recorded on the blockchain, earmarks masters toset a royalty cost. This signifies an master can sell their digital art for $200 to someone and determined a10% royalty cost and if that person turns around and resells it for $400 to someone else, theoriginal artist still realizes $40 on that sale. This kind of thing is very difficult to replicatein real life.An master may sell an original draw for a marry hundred bucks when theyrestarting out and it could suddenly become a highly valuable work of art in the future, selling forhundreds of thousands of dollars that the original creator will never get a penny of. In this wayNFTs can create a passive income for creators. And NFTs can basically be any kind of file, a video, a photograph, a piece of music, whatever. You can check some of these out for yourself ormake your own NFTs on marts like OpenSea and Rarible, where they are bought and sold usingEther, the specify for the Ethereum cryptocoin. A game called Decentraland, which looks a lot likeMinecraft, kind of combinings the art and game uses, making kinfolks buy and selldigital plots of land, houses, and other items, and exhibition the NFTsthey buy elsewhere in these digital homes.Right now all this trash seems pretty niche andsuper weird and hard to understand for new people getting into it. But I mull as it grows andthe technology is more developed itll become more accessible to mass-market purchasers, justas Bitcoin has, except I speculate NFTs have certain advantages of being likened to collectibles andother real-world items parties previously buy, whereas most people are still unsure what exactly to dowith Bitcoin besides buy and sell it as if it were a stock. Personally, Im hesitant to actually payfor anything with Bitcoin because you might, say, buy a pizza with $20 importance of Bitcoin and thenext day Elon Musk makes a tweet and that $20 you devoted is now worth $40. Thats not going tohappen with a stable currency like the dollar. What I think is really going to make NFTs abig deal is the inevitable arrival of good AR engineering. Currently VR is becoming reallypopular through cheaper headsets like Oculus, but you cant precisely walk around with a VRheadset on. Companies like Apple have been working on bringing AR glasses to buyers for years andits very possible that in the next decade or so we will be able to walk around with glassesthat display information and objects overlayed in the real world.Suddenly, you can placeNFT art in your actual residence or maybe even wear NFT clothing around that other peoplewith AR glass can see. If AR becomes as pervasive as smartphones, AR entries you buy willbe just as valuable as real-world entries, because you no longer have to show people the cool artyou bought abusing your computer or phone. Theres a whole lot more to NFTs than some of the morebasic substance that you may start insuring at first, like Logan Paul creating his own collectible NFTs.Thats not very exciting.Another NFT use you may have heard of recently are NBA Top Shots, which is basically the NBA selling collectible spotlight videos of moments in NBA recreations, like LeBron shooting a game-winning 3 needle. NBA Top Shots have already generatedover $31 million in auctions. Wild. Unfortunately, just like Bitcoin, theres a bitof a twilight area to NFTs that I think is important to mention and that people should be aware ofbecause, in my view, it menaces the viability of the whole thing. Currently, basically anythingthat happens on the blockchain is massively wasteful of electricity, which worldwideis still principally made via fossil fuels. I feel like I dont need to explain in this videothat burning fossil fuel like coal and natural gas is the main cause of the world-threateningclimate change we seem not to think fairly about.I know that Ive likely already feelings a knot ofcrypto followers that are currently in the comments of this video. Actuality of such matters is I actuallyreally like the relevant recommendations of cryptocurrencies, I even own some Dogecoin for the memes, infact originally I was going to make a video about Dogecoin but halfway through writing thescript both MKBHD and Graham Stephan impelled videos and it seemed unnecessary for me to do so too.Anyway, the point is that while cryptocurrencies and NFTs seem like really awesome themes, itsundeniable that their underlying infrastructure is incredibly power intensiveand harmful to the environment.For those of you who arent aware, the blockchainis built on the principle of proof of work. Every time someone buys or sells NFTs or acryptocurrency or every time a brand-new NFT or coin is created, known as minting, it setsoff a series of actions for verification. Explaining exactly how this works is beyond thescope of this video, but basically computers around the world, known as miners, compete tosolve a involved math difficulty. Once they solve it accurately, theyre able to verify it againsta certain placed of conditions it needs to meet. Then the miner programs this to the networkand others can also has confirmed that the quantity is correct. Hence, proof of work. This systemmakes it nearly impossible for someone to add a fraudulent transaction to the blockchain, because it would take an incredible sum of computational use that is not only unfeasible, but also only not worth any potential reward.This system manipulates really well to keep NFT andcryptocurrency business and minting procure, but doing that computational work to solve themath difficulties takes a ton of computer power, which abuses a ton of electricity, producedby a ton of fossil fuels, that give a ton of greenhouse gases into our atmosphere andspeed up the disasters of climate change. So, how much electricity is being used when a newNFT is created, bought, or sold? Well, it varies, but as of the writing of this video, an averagesingle transaction on the Ethereum blockchain uses up 48 kWh of power.Thats more influence thanthe average US household eats in a entire epoch. And each NFT can lead to dozens of thesetransactions. Minting the NFT, bidding on the NFT, even canceling your dictation, and of course the sales.Ive keep some relates in the description to folks who have done the math on all of these thingsif youre interested in looking into it further. Its estimated that the median NFT artist isusing 3 MWh of dominance per year, releasing roughly 2 tons of CO2, equivalent to 4 transatlanticflights or about a third of the superpower being used by an American household over an part year.If youre an NFT artist or collector, you can actually check the environmental costs of aparticular piece use the website cryptoart.wtf.It seems there are some changes that can bemade going forward to significantly reduce this power consumption and I hope they areimplemented, as currently it just seems entirely nonsensical to be adding so much carboninto the air to buy and sell digital art. Let me know in the comments what youthink about NFTs. Do you own any? Are you interested in impelling or buyingsome? What are your thoughts on the environmental angle? Ill see you in thecomments and I’ll see you in the future.
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