NFTs are becoming increasingly popular on the Internet, but they are still a recent phenomenon and therefore pose a “mystery” to many. An acronym for “Non-Fungible Token” (“Non-Fungible Token”, translated for free), this technology has opened up a marketplace for the exchange of high-risk digital assets, which can reveal user privacy and facilitate the application of millionaire scams. In addition to debates about the security and reliability of investments, NFTs also discuss the environmental consequences of producing cryptocurrencies. In the following list, d TechTudo NFTs addresses these and other aspects related to the market.
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NFTs: List brings five curious facts about non-fungible tokens – Photo: Picture Alliance / Getty Images
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1. It is easy to fall prey to scams
With the popularity of NFTs, scams involving digital assets are becoming more common. Some were responsible for the loss of millions. For example, in August 2021, criminals used an artist’s bank name to sell an alleged original piece for £ 244,000, which at the time was R $ 1.7 million. In the end, the content did not belong to the artist and the buyer suffered.
Alleged artist sells fake NFT piece and disappears after taking money from investors – Photo: Reproduction / Twitter IconicsSol
In September of that year, a scam pretended to be a digital artist and presented investors with an NFT art collection. He showed some of the alleged 8,000 pieces on his Discord channel and pre-ordered 2,000 NFTs, sold to 0.5 Solanas, the cryptocurrency used in these negotiations. However, instead of receiving artwork, buyers were given a random collection of emojis. The scammers are believed to have raised the equivalent of US $ 138,000 (or R $ 649,000). After the coup, the young man disappeared with the money he had invested.
Similar cases have been reported and they have one thing in common: the combination of anonymity and the lack of tools to verify the authenticity of the material. In general, the unsuspecting user may not have a mechanism to verify the originality of the content or to identify the person trading it, making NFT Market an attractive option for scammers.
2. NFTs affect the environment
NFTs are traded through cryptocurrency exchanges and this electronic mining process is very expensive in terms of energy. Since mining consumes large amounts of electricity, it negatively affects the rates of carbon emissions from the atmosphere and can significantly disrupt the greenhouse effect and the cycle of climate change on the planet.
A 2021 study by the University of Cambridge in England suggests that one-year mining of virtual currencies, such as Bitcoin and Etherium, may represent higher energy consumption than the energy spent by a country like Argentina over the same period.
Cryptocurrency markets and NFTs can contribute to the processes that accelerate climate change – Photo: Disclosure / Pixels
On a smaller scale, NFT purchases can be compared to the daily use of an electric shower. Etherium currency is one of the most widely used tokens in the token purchase process and can represent up to 48 kW / h per transaction. This is equivalent to 30 minutes of monthly shower use with about 3,500 watts of power.
3. The idea of owning an NFT is questionable
When you purchase NFT, you purchase a digital certificate registered on the blockchain that gives you ownership of the digital file – then it can be .JPG image, animation, video, song, among others. Not everyone knows that copyright in that area remains the property of the author. Without authorization to explore the work, the buyer may, in principle, not display the content in a gallery or website.
Buying NFT is not the same as getting a copyright for a work – Photo: Picture Alliance / Getty Images
Furthermore, it is worthwhile to ask how much money is spent on acquiring ownership of the original version of something that is perfectly reproducible. Lastly, do you need to have a meme or digital art original .JPG file, for example, to enjoy them? The answer is of course no. This helps explain why NFTs have increasingly become a speculative medium in which investors seek profit and do not need to appreciate digital art and culture.
4. NFTs can compromise users’ security and privacy
Cryptocurrency transactions operate in a less context of anonymity. You may not know who is behind the wallet, but you can clearly map your transactions on the blockchain. NFTs, on the other hand, allow user-identifying data to be easily interrupted.
For example: If you buy NFT of a particular image and start using that image as an avatar on social networks, it will be easier to identify the transaction related to the purchase. This reveals your cryptocurrency wallet and your entire transaction history.
Something similar happened to American TV presenter Jimmy Fallon. He bought an NFT from the Board App Yacht Club Collection and showed it on TV: in a matter of minutes, the transactions purchased by netizens, the wallet used by Fallon, and the entire transaction history associated with it were identified.
5. NFT is not a good investment
If you see NFT as a form of investment, it is important to know that tokens are a source of high risk. NFTs fluctuate greatly in market mood and, unlike government bonds or corporate stocks, there is no way to quantify the value of the assets purchased. Today, for example, NFTs in the Board App Yacht Club collection, which contains images of bored monkeys, are worth thousands of dollars because there are buyers who agree with that value.
In the absence of any commendable intrinsic value, the value of NFT can fluctuate greatly from one hour to the next – Photo: Pixabay
The problem is that once this type of content goes out of style or people change their minds – and this happens quickly and with great frequency – NFT can quickly lose value. Thus, what was purchased for a few thousand rias becomes an image quoted in just a few cents.
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