The ‘T’ on NFTs

Have you ever heard of NFT (Non-Fungible Token)? Recently, as interest in bitcoin has expanded, NFT, called the ‘second cryptocurrency,’ has also been in the spotlight. Let’s learn more about NFT, which has drawn significant attention from the art industry as a new type of currency. .................................Ed

  Recently, interest in digital art has reached an all-time high. However, pieces of digital artwork created with techniques, such as mixed media, 3D modeling, and digital painting, have proved difficult to trade so far. How does one trade art that can be copied indefinitely, and consists of formless data? This is why NFTs, which appeared under the name of “a way to make digital art tradable,” has begun drawing attention from collector circles.

  NFT is a system that uses blockchain technology in assigning digital art to unique numbers, and makes it possible to maintain uniqueness by doing so. In other words, if you buy an NFT of a certain artwork, you can claim ownership during the timeframe in which you have acquired the token. You can think of it as providing proof of originality by easily gaining access to copiable digital ‘tags’ that cannot be copied. Also, just as Bitcoin can be bought and sold, NFTs can be traded. Art collectors are interested in buying NFTs for this reason.

  This may be the reason record-breaking NFT transactions began to emerge in 2021. Twitter CEO Jack Dorsey’s first tweet was converted into NFT, and was sold for 3.3 billion won, while a collection of image content by digital artist Beeple was traded for 78.2 billion won. This amount is the third-most valuable auction of all time among living artists. Recently, companies and brands have also been participating in the NFT rage, with TIME magazine creating three special magazine covers as NFTs, or Pringles selling 50 digital artworks named ‘Cryptocrisp’ for $600 each.

  However, NFTs are not purely ideal forms of investment. Digital art theft used in creating NFTs has occurred frequently. A JeanMichel Basquiat’s piece, posted on an NFT exchange platform, was deleted on April 28 because the seller had no right to sell. Instances of unauthorized NFT conversions of indie artists also seem a recurring problem.

  There is also criticism that blockchain technology itself has a negative impact on global warming. Blockchain technology preserves the transaction records of unique numbers, which results in a huge amount of energy consumption for each transaction. To put this in scale, the virtual currency called Ethereum annually consumes roughly as much electricity as the entire country of New Zealand does every year, and leaves the same amount of carbon footprints left by all of Ghana within the same timeframe.

  With the advent of NFT technology, digital art may enter a new era. However, there are currently many roadblocks. For a healthier market, digital artists’ rights should be protected by clear standards of ownership, and methods that help cut down energy consumption must be implemented.

Lee Tae-ran (ST Reporter)

leafpool@soongsil.ac.kr