Non-fungible tokens, or NFTs, have gained significant popularity in recent times, with their market value reportedly reaching around $28 billion, as per reports from The Block, a crypto-based research platform. NFTs are unique codes that create ownership and authenticity on a blockchain, and they cannot be copied or substituted. The first half of 2021 saw the total value of NFT transactions increase to over $13.7 billion, according to reports from NonFungible.com, a NFT market research platform.
Several high-profile NFT sales have taken place, with one Cryptopunk #5822 selling for $23.7 million in February 2022, and musician Grimes selling a collection of NFTs for over $5.8 million in August 2021, according to Vikas Ahuja, CEO of Metaverk. NFTs have also opened up new revenue streams for creators and artists, with their digitized and programmable nature allowing for innovation and smart forms of exchange with other digital currencies.
As the digital world of the Metaverse becomes a reality, there is a growing need for a digitally native currency and asset ownership paradigm, which can be done through NFTs, according to Gaurav Arora, SVP of DeFi Initiatives at CoinDCX. The adoption rate of the Metaverse is reportedly about 400 million monthly active users, and more people are expected to join, which would require a currency to navigate.
In terms of sustainability, digital currencies are believed to be more sustainable than NFTs, as Ethereum reportedly consumes about 142KW per hour, much less than the 340 KWh of energy consumed by NFTs, according to reports from Statista. There have been concerns about the sustainability of NFTs due to the potential environmental impact of the blockchains used to create and trade them. However, Dilip Chenoy, Chairman of Bharat Web3 Association, noted that efforts are underway to address the sustainability issues associated with NFTs.
