WhatTareTNFTsTandTcan theyThelpTwildlifeTconservation?
Some
NTSs are raising cash for conversion but What on earth is digital Craze? And
what are the downsides for investors wild life charities and the environment?
TheTworldTwasn’tTcryingToutTforTaTturtle-catThybrid.TButTtheTarrivalTofT‘Turtle-cat’TinT2018TprovedTsuchTaThitTthatTsomeoneTforkedToutTUS$25,000TforTit.TWhatTtheyTpaidTforTwasn’tTaTnew-to-scienceTdiscovery,TaTgeneticTexperiment,TaTtoy,TorTevenTanTastoundingTworkTofTart,TbutTwhatTisTratherTcatchilyTknownTasTaT‘non-fungibleTtoken’T(NFT).
IfTyou’reTlostTatTtheTwordsT‘fungible’TorT‘token’,Tyou’reTnotTalone.TNFTsTare
TaTbewilderingTsubject.TEssentially,Tthey’reTaTdigitalTtradingTsystem.
“Non-fungibleTtokensTareTsimilarTtoTcryptocurrencies,TlikeTBitcoin,”TexplainsTPeterTHowson,TseniorTlecturerTinTinternationalTdevelopmentTatNorthumbriaTUniversity
“TheTbigTdifferenceTisTthat,TwhereasTindividualTBitcoinsTallThaveTtheTsameTvalueTandTareTinterchangeable,TNFTsTareTmoreTlikeTantiqueTbaseballTcards:TeachThasTaTdifferentTvalue.TFungibleTmeansT‘mutuallyTinterchangeable’TandT‘ofTidenticalTvalue’.TAnythingTdigitalTcanTbeTrepresentedTasTanTNFT.TThey’reTcrypto-collectiblesTratherTthanTcryptocurrency.TYouTcollectTandTtradeTthemTwithTotherT
peopleTwhoTshareTyourTinterest.
TheTNFTTartworkT"UntitledT(SelfPortrait)"TbyTAndyTWarholTonTdisplayTatTtheTDigitalTArtTFairTAsiaTshowcasingTdigitalTandTNFTTartTinTHongTKong,TChina.T©TLamTYik/Bloomberg/Getty
PeteTHowsonTexplainsTtheTkeyTtermsTofTNFTsTbelow,TbutTforTmoreTdetailedT
information,TourTcolleaguesTonTBBCTScienceTFocusThaveTputTtogetherTanTguideTonTeverythingTyouTneedTtoTknowTaboutTNFTs.
WhatTareTNFTs?
Non-FungibleTTokensTareTsimilarTtoTcryptocurrencies,TsuchTasTBitcoin,TbutTwhereasTiiiindividualTBitcoinsTallThaveTtheTsameTvalueTandTareTinterchangeable,TeachTNFTThasTaTdifferentTvalue.TNFTsTexistTonTyourTcomputerTasTdigitalTrepresentationsTofTartworks,Tsongs,Tfilms,TeventTtickets,TandTgames.
WhatTisTaTblockchain?
ATblockchainTisTaTsharedTelectronicTdatabase,TlikeTaTDropBoxTfolder,Texcept
youTcanTonlyTaddTfilesTtoTit.TYouTcan’tTchangeTorTdeleteTanythingTalreadyTthere.TThereTareTloadsTofTdifferentTblockchains.TButTmostTNFTTcreatorsTuseT
Ethereum,TwhichTusesTanTenergyintensiveTcomputerTfunctionTcalledT‘mining’.TIt’sTcalledTminingTbecause,Tlike digitalTgoldTcoins,Tthat’sThowTnewTcryptocurrenciesTareTcreated.
WhatTisTmining?
WithTDropBoxTyourTsharedTfolderTisTlookedTafterTbyTaTcompanyTforTaTfee.TWithTaTblockchain,Tthere’sTnoTcompany.TInstead,TtheTblockchainTusesTaTglobalT
networkTofTmillionsTofT‘mining’TcomputersTthatTcompeteTtoTprocessTyourTdataforTaTfee.TTheyTplayTaTgameTtoTguessTtheTcombinationTtoTaTlongTstringTofTdigits,TwithTtheTmostTpowerfulTwinningTaTfewTthousandTpoundsTworthTofT
cryptocurrency.TTheTcombinationTchangesTeveryT15TsecondsTandTtheTcontest continuesTforever.
HowTdoTNFTsTworkTforTwildlifeTphotographes?
“TheTcollectorTofTanTNFTTownsTonlyTaTtokenT–TaTtypeTofTdigitalTcertificateTofTownership.TItsTvalueTisTdeterminedTbyTwhat
someoneTisTwillingTtoTpayTforTit,TbasedTonTexclusivityTandTtheTphotographer.T
TheTphotographerTownsTtheToriginalTimageTcopyrightTandTtheTcollectorTcan’tTreproduceTtheTimage,”TwildlifeTphotographerTRichardTBernabe.
“SometimesTtheTphotographerTwillTincludeTaTprintTasTaTniceTgesture,TorTmaybeT
theTcollectorTwouldTwantTtoTpossessTtheTimageTfileT(ieTJPEG)TtheTtokenT
represents.TThat’sTfine,TbutTneitherTisTwhereTtheTNFTTgetsTitsTvalue.TImagineTaTManchesterTUnitedTjerseyTsignedTbyTRonaldo.TIfTheTwereTtoTsignTitTandTthenTprovideTaTcertificateTstatingTitTisTtheTonlyToneTheThasTeverTsigned,TitTwouldTbeTtheTcertificate,TnotTtheTjerseyTitself,TthatTisTofTmostTvalue.TIt’sTtheTsameTwithTNFTs.”
Turtle-cat,TalsoTknownTasTHonu,TwasTcreatedTbyTonlineTblockchainTgameTCryptoKitties,TandTwasTauctionedTtoTraiseTmoneyTforTmarineTconservation.TItTwasTaTsignTofT
thingsTtoTcomeTNFTsTnowTsellTforTludicrousTsumsTofTmoney,TandTareTprovingTaTsignificantT
sourceTofTrevenueTforTcharities.
“WhenTthisTprettyTrubbishTpictureTofTaTturtlecatTsoldTforTUS$25,000,TpeopleTwereTlike:T‘What’sTgoingTon?’TItTwasTaTmind-blowingTsumTofTmoney,”TsaysTHowson.T“ButTthatTcryptocurrencyTwentTtoToceanTconservationTcharities.TAsTlongTasTthereThaveTbeenTNFTs,TthereThaveTbeenTwildlifeTcharitiesTmakingTmoneyTfromTpeopleTdonatingTthemTorTgivingTthemTtheTproceeds.TCartoonTapesThaveTsoldTforT£700,000,TwithTtheTmoneyTgoingTtoTanTorangutanTcharity.T£500,000TfromTNFTsTalsoTwentTtoTVirungaTNationalTPark.”
EmergingTinT2015,TNFTsThaveTrangedTfromTcollectionsTofTanimalTdrawings,TlikeTPepeTtheTFrog,TtoTaThouseTonTMarsT(digital,TnotTreal)TthatTsoldTforTUS$500,000.TTheTvalueTofTanTNFTTisn’tTconnectedTtoTitsTbrilliance,TbeautyTorTphysicalvalue,TsoTanTNFTTofTaTphotographicTmasterpieceTisn’tTnecessarilyTofThigherTvalueT
thanTaTquirkyTcartoon.TCryptoPunkT7804,TforTexample,TaTpixelatedTfigureTsmokingTaTpipe,TsoldTforTUS$7.5Tmillion.
ATgalleryTassistantTholdsTupTaTsmartphoneTdisplayingTtheTgallery'sTonlineT
marketplaceTnearTanTNFTTandTsignedTlithographT"SealedTCryptopunkT#3036"TbyTLarvaTLabsTarranged,TduringTtheTpressTpreviewTofTtheTPortraitTofTanTEraT
exhiition,TatTtheTHouseTofTFineTArtT(HOFA)TGalleryTinTLondon,TU.K.T©TChrisT
J.TRatcliffe/Bloomberg/Getty
TheTvalueTisTinsteadTdeterminedTbyTwhatTpeopleTareTwillingTtoTpayTandTtheT
NFT’sTexclusivity,TincludingThowTmanyTareTmintedT(publishedTforTpurchase).T“TheTmostTexpensiveTNFTTsoTfar,TTheTMerge,TsoldTforTUS$91.8TmillionTinDecemberT2021,”TsaysTHowson.T“It’sTjustTtwoTgreyTballsTonTaTblackTbackground.TYouTcouldTbuyTthreeTprivateTjets,TorTthisTimageTofTtwoTgreyTballs.TTheTtalentTofTtheTartistTdoesn’tTseemTtoTmakeTanyTdifferenceTtoTtheTpricesTNFTsTareTfetching.TATlotTofTtheTvalueTisTdownTtoTbuzzTamongTtheTcollectors.”
WhoTownsTanTNFT?
AndTitTgetsTstrangerTthanTthat.TNFTsTareToftenTcomparedTtoTsomethingTlikeTaT
rareTbaseballTcard.TButTwithTaTbaseballTcard,TorTanyTmemorabiliaTitem,TyouTgetTtoTtakeTitThome,TholdTit,TdisplayTit,TlookTatTit.TWithTNFTs,TallTyouTusuallyT‘own’TisTaTdigitalTreceipt.
“It’sTlikeTmeTsayingT‘I’llTsellTyouTtheTMonaTLisa’TbutTitTstillThasTtoTliveTinTtheT
LouvreTinTParis,”TsaysTHowson.T“YouTjustTgetTtoTsayTyouTownTit.TYouTcan’tT
makeTcopies,TprintTitTorTmoveTitTanywhere.TWhenTyouTbuyTanTNFT,Tyou’reT
buyingTaTcertificateTofTownershipT–TaTreceiptTfileTthatTlivesTinTaT‘crypto-wallet’.TTheTtransactionTisTpermanentlyTwrittenTontoTaTblockchain.TTheTcreatorTofTtheTartworkTusuallyTretainsTtheTactualT‘thing’T–TtheTTweet,Tphoto,TpaintingTorTsong.TInTmostTcasesTwithTdigitalTart,TyouTownT
littleTmoreTthanTbraggingTrights.TThisTisTtheTbizarreTworldTofTNFTs.”
DavidTGersch,Tartist,TauctionsTphysicalTartworksTwithTauthenticatedTNFTTdigitalT
copiesTandTdigitalTNFTs,TbyTvariousTartists,TduringTtheTNFT.SOHOTeventTinT
London,TU.K.T©LukeTMacGregor/Bloomberg/Getty
WeTwereTpromisedThologramTphonesTandTflyingTcars.TInstead,TweTgetTaT‘
Schrödinger’sTcat’TtradingTsystem,TwhereTyouTownTaTthingTandTdon’tTownTitTatT
theTsameTtime.So,TwhyTbother?T“ForTNFTTartworks,Tit’sTpureTspeculation,”TsaysTHowson.T“AsT
withTanythingTcryptorelated,TtheTmajorityTofTpeopleTbuyTtheseTdigitalTassetsTbecauseTtheyTexpectTtheTvalueTofTthemTtoTgoTupTinTfuture.TNFTsTareTseenTasTanTinvestment.”
HowTdoTNFTsTraiseTmoneyTforTendangeredTspecies?
TheTworld’sTwildlifeTisTinTcrisis.TCharityTdonationsThaveTdeclined,TwithTpeople’sTlivelihoodsTandTearningsThitTbyTtheTglobalTpandemic,TandTfundraisingTeventsThaveTbeenTcancelled.TOlderTdonors,TwhoTareTmoreTlikelyTtoTgiveTregularly,TareT
graduallyTdyingTout,TleavingTwildlifeTcharitiesTneedingTtoTattractTyoungerTsupporters.TThisTisTwhereT‘exciting’Ttech,TsuchTasTNFTs,TcomesTinThandy.
“WithTNFTs,TweTcanTreachTaTwholeTnewTdemographic,”TsaysTTristanTWood,T
directorTofTwildlifeTcharityTSavingTTheTSurvivors,TwhichThasTraisedTUS$7,000fromTNFTs.T“We’veThadTpiecesTofTartTdonatedTinTtheTpastTandTartistsThaveT
sharedTrevenueTfromTsalesTwithTus,TbutTwithTNFTs,TyouThaveTaTglobalT
accessibilityTandTyouTcanTpresentTworksTtoTyourTaudienceTatTspeed.”
SmartTContractsT–TrulesTonTtransactions,TwrittenTintoTtheTcodeT–TareTaTbigTpartTofTNFTs’Tappeal.TTheyToftenTofferTaT10%TresaleTroyalty,Tso
individualsTorTorganisationsTkeepTearningTasTtheTNFTTisTtraded.
NFTsTcanTalsoTraiseTawareness.TPeopleTcouldTdisplayTtheirTNFTsTasTprofile
TpicturesTonTsocialTmedia,TtoTactTasTambassadorsTforTwildlifeTcharities.TTheyT
couldTalsoTkeepTtheTdigitalTartworkTorThaveTitTprintedTonTaTmugTorTT-shirt.
WildlifeTphotographerTRichardTBernabeTisToneTofTmanyTwhoThaveTdelvedTintoT
NFTs,TincludingTaTnewlyTmintedTLivingTLegaciesTcollectionTofTblack-and-whiteTAfricanTwildlifeTimagesTwithT15%TofTproceedsTgoingTtoTwildlifeT
conservationTorganisations,TincludingTAfricanTWildlifeTFoundation,TBornTFreeTFoundationTandTWildAid.
“MyTexperienceTwithTNFTsThasTbeenTextremelyTpositive,”TheTsays.T“WhenTIT
realisedTmyTphotographyTcouldTbeTtokenisedTasTNFTsTandTcollectorsTcouldT
investTinTmeTdirectly,TwithoutTtheTtraditionalTintermediariesTandTbarriersTofTgalleryTcurators,Tbrokers,TmanagersTandTagents,TITknewTITwasTseeingTintoTtheTfuture.TThere’sTaTgenuineTspiritTofTcommunityTamongTphotographers,Tartists,TandTcollectors,TandTweTallTseemTtoTrealiseTwe’reTatTtheTveryTbeginningTofTwhatTwillTsoonTbeTtrulyTbig.TOfTcourse,TweTcouldTallTbeTwrong.TThisTcouldTendTupTbeingTaT
fadTorTbubbleTthatTburstsTtomorrow.TButTITdon’tTthinkTso
.”
NFTsTallowTaTphotographerTtoTmakeTmoneyTfromTtheirTimagesTwithoutTgivingTupTtheTcopyright.T©TAlamy
WhatTareTtheTrisksTwithTNFTs?
PartTofTtheTappealTofTNFTs,TBitcoinTandTcryptocurrenciesTisTthatT
they’reTdecentralised,TexistingToutsideTtheTregulationsTofTinternationalTbanksTorT
governments.TThatTbringsTbenefitsTandTrisks.T“WithTanyTcryptoTinstrument,T
they’reTaTbitTscammy,”TsaysTHowson.T“PeopleTlikeTDamienTHirst,TParisTHiltonT
andTElonTMuskTallTsellTNFTs,TbutTthere’sToftenTnoTwayTofTknowingTwhoTisT
legitTandTwhoTisn’t.”
AnTNFTTcreatorTorTcuratorTcouldTalsoTsayTthey’reTgivingTtheTproceedsTtoTcharity,TbutTitTmightTnotTbeTtrue.T“IfTaTcharityThasTcuratedTaTcollectionTofTNFTs,TyouTshouldTgoTdirectTtoTtheTcharityTandTthey’llTpointTyouTtoTwhereTyouTcanTbuyTthem,”TadvisesTHowson.
TheseTaren’tTtheTonlyTrisks.T“We’reTactuallyTseeingTveryTfewTNFTsTresellTforT
moreTthanTwhatTtheToriginalTbuyerTpaid,”THowsonTadds.T“‘NormalTpeople’TshouldTdefinitelyTnotTseeTthemTasTanTalternativeTtoTaTpensionTplan.TButTwhoTknows?TInT100Tyears,TmaybeTthey’llTbeTworthTmillions,TlikeTsuper-rareTstamps.”
AreTNFTsTbadTforTtheTenvironment?
YetTthereTisTwhatTPeterTHowsonTcallsTanT“intolerableTcontradiction”TatTtheTheartTofTNFTsTbeingTusedTbyTwildlifeTandTenvironmentalTcharities.TCreatingTNFTsTisTincrediblyTdamagingTtoTtheTenvironment,TmeaningTcharitiesTareTcontributingTtoT
theTdestructionTofTtheTveryTnaturalTworldTthey’reTworkingTtoTprotect.
“TheTclimateTchangeTaspectTneedsTtoTbeTlookedTat,”TarguesTHowson.T
“BlockchainsTlikeTEthereum,TwhichTmostTNFTsTareTmintedTon,TuseTanTimmenseTamountTofTenergy,TrequiringTmillionsTofT‘mining’TcomputersTaroundTtheTworldTthatTcompileTandTverifyTtransactions.TEthereumTusesTmoreTenergyTannuallyTthanTtheTNetherlands.TTheTblockchainThasTaTcarbonTfootprintTlargerTthanTSweden’sT–TaroundT50TmillionTtonnesTofTCO2.TEachTindividualTNFTTisTresponsibleTforT115.07kgTofTCO2TperTtransaction.TIfTyouTwatchedT20,000ThoursTofTYouTube,T
you’dTgenerateTlessTCO2TthanTifTyouTboughtTorTsoldTanTNFTTonce.”
OrganisationsTsuchTasTGreenpeaceThaveTrejectedTworkingTwithTNFTsTor
TacceptingTdonationsTinTBitcoinTandTotherTcryptocurrenciesTonTenergy-consumptionTgrounds.T“MostTordinaryTpeopleTareTbecomingTmoreTawareTofTtheT
environmentalTandTsocialTimpactTofTNFTs,TandTareTstartingTtoTquestionTit,”T
suggestsTHowson.T“ThisTisTwhyTwe’reTseeingTsomeTcharitiesTpullingToutTofTthisTspace,TandTalsoTgovernmentsTandTcountries,TlikeTIcelandTandTKosovo,TregulatingTitTmoreTandTmakingTitTillegalTonTenvironmentalTgrounds.”
InternationalTAnimalTRescue,TwhoTraisedTmoreTthanTUS$50,000TinTitsTfirstTmonthTofTusingTNFTsTinT2021TandTwereTaimingTtoTraiseTaTfurtherTUS$500,000T
throughTanTNFTTpartnership,ThasTchangedTitsTpolicyTlargelyTdueTtoTenvironmentalTconcerns,TnoTlongerTacceptingTcryptoTdonationsTandTconcludingTallTrelationshipsTwithTNFTTprojects.T“TheTpotentialTforTblockchainTtechnologyTisTvast,TasTisTtheTpotentialTforTfundraising,”TsaysTaTspokesperson,T“butTtheTtechnologyTneedsTtoTbeTmoreTalignedTwithTourTvalues.”
TheTcreationTofTNFTsTareTdamagingTtoTtheTenvironment,TsoTisTitTappropriateTtoTcreateTNFTsTtoTraiseTmoneyTforTwildlifeTconservation?T©TOwenTDavey/FolioTArt
TheTenvironmentalTimpactTpresentsTaTseriousTproblemTthatTcouldTstrangleTNFTTuseTforTconservation.THowever,TlessTenergy-intensiveTblockchainsTdoTexist,TandTthere’sTplentyTofTtimeTtoTreformTNFTs.T“WithTBitcoin,TEthereumTandTLitecoin,TpeopleTdidn’tTgiveTaTdamnTaboutTtheT
environmentalTimpactT–TtheyTjustTwantedTtoTmakeTmoney,”TsaysTHowson.
“ButTifTyouTbringTinTpeopleTwhoTcareTaboutTtheTenvironmentTandTwildlife,TtheyTputTpressureTonTEthereumTandTothersTtoTmakeTthoseTplatformsTmoreTenergy-efficientTandTenvironmentallyTsustainable.TIfTNFTsTareTgoingTtoTsurvive,Tthey’llT
haveTtoTbecomeTmoreTsustainable.TOtherwiseTpeopleTwillTjustTstopTusingTthem.”
WildlifeTcharitiesTareTtryingTtoTaddressTtheseTenvironmentalTconcerns.TWWF’sT
recentTNonFungibleTAnimalsTorTNFAsTwereTcreatedTonTPolygon,TwhichTisTdescribedTasTaT“sustainable,Teco-friendlyTblockchain”.
ButTtheTideaTofT‘GreenTNFTs’TthatTuseTmoreTsustainableTblockchainsTonlyTtellsTpartTofTtheTstory.T“EvenTifTyouTuseTaTmoreTsustainableTblockchainTplatformTtoT
buyTandTsellTNFTs,TpeopleTareTstillTgoingTtoTpayTforTthemTusingTBitcoinTandT
Ethereum,TwhichTareTenergyintensive,TwithTaTmassiveTcarbonTfootprint,”TexplainsTHowson.T“IfTyou’reTinvolvedTinTNFTs,TyouTcan’tTavoidTgettingTyourThandsTdirty.”
ThereTareTotherTnegativeTimpactsTthatTneedTconsiderationTtoo.T“AnTenormousTamountTofTelectronicTwasteTisTcausedTbyTNFTTandTcryptoTplatforms,”THowsonTexplains.T“PilesTofTcomputerTparts,TgraphicsTcards,TmachinesTandTmemoryTdrivesTgettingTburnedToutTandTdumpedTinTtheTglobalTsouth,TinTIndiaTorTChina,TwhereThazardousTelectronicTwasteTisTpickedTthroughTbyTtheTpoorestTpeopleTinTtheTworld.TEveryTtransactionTisTtheTequivalentTofTthrowingTawayTtwoTiPhones.”
What'sTtheTfutureTforTNFTs?
WillTNFTsTdieTout,TorTwillTtheyTevolveTandTthrive?TTheTfuture’sThardTtoTpredict.TButTyouTcanTexpectTtheTunexpected.
“We’reTseeingTdigitalTrepresentationsTofTrareTwildlife,TlikeTplatypuses,TbeingTsoldTasTNFTsTforTuseTinTmetaverseTgamingTtoTraiseTawarenessTofTtheTplightTofTplatypusesTinTAustralia,”TsaysTHowson.
“We’reTstartingTtoTseeTcarbonTcreditsTtradedTasTNFTs.TJustTwhenTyouTthinkTwildlifeTfundraisingThasTgotTasTweirdTasTitTcanTpossiblyTget,TsomeoneTpaysTmillionsTforTaTdigitalTpairTofTsocksTforTtheirTrareTmetaverseTpandaTavatar,TorTsomething.TThat’sTjustTaTnormalTdayTinTtheTworldTofTNFTs.”
0 Comments