Demystifying NFTs and Crypto — In Plain English
By Busayo Onifade, Content Designer
As a content designer with a background in crypto, I seem to be the go-to for crypto. I get this question often—“what do you think about NFTs?”
Before I give you my 2 cents or 2 Dogecoins, let’s break down what an NFT is. In a way we can actually understand.
An NFT is a digital work of art that can be bought and owned by anyone using cryptocurrency aka digital currency. It can be anything from UEFA player cards like Lionel Messi’s to even digital concert tickets — any form of art you can think of, just digital.
Now, onto what I really think of NFTs.
When asked about this, I typically default to my knowledge and experience from when I worked for a crypto company. While I still stay in the know about crypto, I have a more neutral stance on NFTs (but more on that later).
I've heard…
They are dangerous for the environment, yet they're good for the environment (eco-friendly coins like Solana)
They're simply hype
They are an effective way for artists to shine
They help people build wealth.
For me, NFTs are cool, but there's a lot of hype culture behind it. All you hear about is people selling a useless or nostalgia-fueled NFT like Air Mags for $20,000 or farts from that one reality star. From the hype to the insta-fame, there’s no doubt that NFTs are definitely continuing to trend.
Wherever you stand, here’s some insights you need to know.
But is it really all hype?
Image source: Eternity Chain
This leads to the issue of misinformation and lack of education. NFTs in its core is not just a catchy trend, but it is part of the future of alternative economy—cryptocurrency. Even though NFTs are a niche-part of the crypto world, they still yield benefits for everyone from economic freedom and access to the underbanked and unbanked in the world to a digital gallery and business for artists of all kinds.
If you want to know more about something, you research it. Get involved, find out more about NFTs for yourself. Congrats! You’ve already started your research by reading this article. You’re welcome. :)
I always find good pieces like this and this on it via Coinbase Bytes, their newsletter.
Overall, I think there's not enough education and visibility into NFTs. I always try to share more about it and educate people on its impact/benefits when people talk about it.
I heard it was a scam.
Well, that’s where you can keep doing your research. Some people scam or game the system like any system. True, but….NFTs in its essence is a secure transaction protected by blockchain technology. Want more? You can read all about it here! It depends on the NFTs. Some are playing cards like the UEFA player ones or moments of an event or pure nostalgia. I don’t know about you, but for me, useful NFTs are ones that I can actually physically use, like concert tickets; something that's actually useful to me, not just for entertainment or ownership. Kings of Leon was the first band to use NFTs to sell tickets and merch when they launched their album last year. Now that’s something I’d buy.
Another good point to highlight is ownership. Having an NFT or multiple NFTs means you have ownership of them all. You can sit on them, allow them to increase in value and sell them or you can simply keep them. Just like anything new you invest in, there are risks. Some pay off, some don’t. What might concern others more is the environmental impact of these trendy pieces of art.
Is it really bad for the environment?
Some say that NFTs, crypto, mining are bad for the environment. Yes, that’s true. The OGs of crypto, Bitcoin and Ethereum are known to use a lot of energy. For example, Bitcoin mining or the process for creating new coins and verifying transactions can generate about 96 million tons of carbon dioxide emissions each year—equal to the amounts generated by some smaller countries. Whoa! Mind blown!
That was a crazy stat, but stay with me here. Not every cryptocurrency uses that much energy. There are some notable ones that are all about energy efficiency and environmental consciousness like Solana, Tezos, and Flow. To break it down, Bitcoin and Ethereum are like old stubborn folks that don’t want to adapt to the times and innovate, evolve while being environmentally conscious. Solana, Tezos, and Flow are the true innovators that really want to impact change and make web3, crypto a better environment.
If you’re still reading this, you’re definitely understanding NFTs and the world of crypto. I hope you’re digging it as well.
Speaking of enjoyment, who doesn’t love art?
Image source: The Hair Diary, OpenSea
Something that gets lost, overshadowed in the story of NFTs, is the art of NFTs. This is a place where artists can share stories and earn money for their work. It's another way for access if they can't show it in galleries. That's what's great about crypto, is that it helps provide economic access and freedom for people, especially underserved people.
On price point, yes, it's ridiculous how much people spend on NFTs, but it is art. People spend millions of dollars on very simple art work and art work in general. I think the key point here is that with traditional art like paintings and sculptures, you can physically have it. It's a physical, tangible object rather than NFTs which is digital. I’d say, appreciate the art of NFTs and find the beauty in it. You’d be surprised at what you learn.
An opportunity for diversity
Image source: WomenRise, OpenSea
Really, I promise, last point! I'd like to bring up that crypto/NFTs is male-dominated: mostly male developers and consumers. I wish it was geared to appeal to more women as well as more women being in the crypto space. Let’s make finance, crypto, NFTs more accessible and invite women into this amazing world! You’re missing a very important perspective here. I always strive to share my perspective as a woman in crypto and this article is one of the ways I try to get the female voice into the crypto world.
However you feel about NFTs, hopefully you learned something new and were able to take away a newfound understanding, explanation of crypto in actual English, and you can go out and discover new knowledge in crypto and in anything in life.
Go forth and discover!