Examine individual changes

'{{redirects here|NFT}} {{puffery|date=May 2021}} {{unreliable sources|date=May 2021}} {{pp|small=yes}} {{Short description|Unique unit of cryptographic currency}} [[File:NFT Icon.png|thumb|Logo used to represent non-fungible tokens]] A '''non-fungible token''' ('''NFT''') is a unit of data stored on a digital [[ledger]], called a [[blockchain]], that certifies a [[digital asset]] to be unique and therefore not interchangeable.<ref name=":32">{{Cite web|last=Dean|first=Sam|date=2021-03-11|title=$69 million for digital art? The NFT craze, explained|url=https://www.latimes.com/business/technology/story/2021-03-11/nft-explainer-crypto-trading-collectible|url-status=live|access-date=2021-04-08|website=Los Angeles Times|language=en-US}}</ref> NFTs can be used to represent items such as photos, videos, audio, and other types of digital files. Access to any copy of the original file, however, is not restricted to the buyer of the NFT. While copies of these digital items are available for anyone to obtain, NFTs are tracked on blockchains to provide the owner with a proof of [[ownership]] that is separate from [[copyright]]. In 2021, there has been increased interest in using NFTs. Blockchains like [[Ethereum]], Flow, and [[Tezos]] have their own standards when it comes to supporting NFTs, but each works to ensure that the digital item represented is authentically one-of-a-kind. NFTs are now being used to [[commodify]] digital assets in art, music, sports, and other popular entertainment. Most NFTs are part of the Ethereum blockchain; however, other blockchains can implement their own versions of NFTs.<ref>{{Cite web|last=Clark|first=Mitchell|date=2021-03-03|title=People are spending millions on NFTs. What? Why?|url=https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq|access-date=2021-04-15|website=The Verge|language=en}}</ref> The NFT market value tripled in 2020, reaching more than $250 million.<ref name=":0">{{Cite web|title=The NFT Market Tripled Last Year, and It's Gaining Even More Momentum in 2021|url=https://www.morningbrew.com/emerging-tech/stories/2021/02/22/nft-market-tripled-last-year-gaining-even-momentum-2021|access-date=2021-04-08|website=Morning Brew}}</ref> The rise of NFT transactions has also led to increased environmental criticism. The computation-heavy processes associated with [[Proof of work|proof-of-work]] blockchains, the type primarily used for NFTs, require high energy inputs that are contributing to global warming. The carbon emissions produced by the energy needed to maintain these blockchains has forced some in the NFT market to rethink their [[carbon footprint]]. == Description == A non-fungible token (NFT) is a unit of data stored on a digital ledger, called a blockchain, that certifies any digital file to be unique.<ref name="$69 million for digital art?">{{Cite news|last=Dean|first=Sam|date=March 11, 2021|title=$69 million for digital art? The NFT craze, explained|work=Los Angeles Times|url=https://www.latimes.com/business/technology/story/2021-03-11/nft-explainer-crypto-trading-collectible|access-date=March 12, 2021}}</ref> An NFT functions like a cryptographic token, but unlike cryptocurrencies such as Bitcoin, are not mutually interchangeable, in other words, not [[fungible]].<ref>{{Cite news|title=WTF Is an NFT, Anyway? And Should I Care?|language=en-us|work=Wired|url=https://www.wired.com/story/gadget-lab-podcast-495/|access-date=2021-03-13|issn=1059-1028}}</ref> NFTs are created when blockchains string records of cryptographic hash, a set of characters that verifies a set of data to be unique, onto previous records therefore creating a chain of identifiable data blocks.<ref name=":23">{{Cite web|last=Boscovic|first=Dragan|title=How nonfungible tokens work and where they get their value – a cryptocurrency expert explains NFTs|url=http://theconversation.com/how-nonfungible-tokens-work-and-where-they-get-their-value-a-cryptocurrency-expert-explains-nfts-157489|access-date=2021-04-08|website=The Conversation|language=en}}</ref> This cryptographic transaction process ensures the authentication of each digital file by providing a digital signature that is used to track NFT ownership.<ref name=":23" /> However, data links that point to details like where the art is stored can die.<ref>{{cite news|last1=Kastrenakes|first1=Jacob|date=March 25, 2021|title=Your Million-Dollar NFT Can Break Tomorrow If You're Not Careful|work=The Verge|url=https://www.theverge.com/2021/3/25/22349242/nft-metadata-explained-art-crypto-urls-links-ipfs|access-date=March 31, 2021}}</ref> Also, ownership of an NFT does not inherently grant copyright to whatever digital asset the token represents.<ref name=":42">{{cite news|last1=Samarbakhsh|first1=Laleh|date=March 17, 2021|title=What are NFTs and why are people paying millions for them?|work=The Conversation|url=https://theconversation.com/what-are-nfts-and-why-are-people-paying-millions-for-them-157035|access-date=March 31, 2021}}</ref> While someone may sell an NFT representing their work, the buyer will not necessarily receive copyright privileges when ownership of the NFT is changed and so the original owner is allowed to create more NFTs of the same work.<ref>{{Cite news|last=Salmon|first=Felix|date=March 12, 2021|title=How to exhibit your very own $69 million Beeple|work=Axios|url=https://www.axios.com/beeple-crypto-nft-art-a4c631d1-d173-46a5-b514-9732b2fcecaf.html|access-date=March 13, 2021}}</ref><ref name=":53">{{Cite news|last=Clark|first=Mitchell|date=March 11, 2021|title=NFTs, explained|work=The Verge|url=https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq|access-date=March 11, 2021}}</ref> In that sense, an NFT is merely a proof of ownership that is separate from a copyright.<ref>{{Cite news|date=March 3, 2021|title=NFT blockchain drives surge in digital art auctions|work=BBC|url=https://www.bbc.com/news/technology-56252738|access-date=March 12, 2021}}</ref><ref>{{Cite news|last=Thaddeus-Johns|first=Josie|date=March 11, 2021|title=What Are NFTs, Anyway? One Just Sold for $69 Million.|work=The New York Times|url=https://www.nytimes.com/2021/03/11/arts/design/what-is-an-nft.html|access-date=March 13, 2021}}</ref> ==Uses== [[File:Hashmask 15753.jpg|thumb|This image, ''Hashmask'' 15753 (1 of 16,384) by "Suum Cuique Labs GmbH", sold with an NFT on the [[Ethereum]] blockchain.]] NFTs of artworks are similar to [[Autograph collecting|autographed items]].<ref>{{Cite web |last=Peters |first=Jay |date=2021-03-05 |title=Please do not give billionaire Jack Dorsey money for his tweet |url=https://www.theverge.com/2021/3/5/22316320/jack-dorsey-original-tweet-nft-cent-valuables |access-date=2021-03-12 |website=The Verge |language=en}}</ref> The unique identity and ownership of an NFT is verifiable via the blockchain ledger. NFTs have [[metadata]] that is processed through a [[cryptographic hash function]].<ref>{{Cite news |date=March 13, 2021 |title=Want to Buy an NFT? Here's What to Know |work=The Wall Street Journal |url=https://www.wsj.com/articles/want-to-buy-an-nft-heres-what-to-know-11615647601 |access-date=March 14, 2021}}</ref> === Digital art === [[Digital art|Digital]] [[art]] was an early use case for NFTs, because of the ability of blockchain technology to assure the [[Authenticity in art|unique]] [[Digital signature|signature]] and ownership of NFTs.<ref>{{cite news|last1=Patterson|first1=Dan|date=March 4, 2021|title=Blockchain company buys and burns Banksy artwork to turn it into a digital original|work=CBS News|url=https://www.cbsnews.com/news/banksy-nft-injective-destroy-art-digital-token/|access-date=March 17, 2021}}</ref> Digital artwork entitled "Everydays – The First 5000 Days", by artist Mike Winkelmann, also known as [[Beeple]], sold for {{US$|69.3 million}} in 2021.<ref>{{Cite web|last=Kastrenakes|first=Jacob|date=2021-03-11|title=Beeple sold an NFT for $69 million|url=https://www.theverge.com/2021/3/11/22325054/beeple-christies-nft-sale-cost-everydays-69-million|url-status=live|archive-url=https://web.archive.org/web/20210321215043/https://www.theverge.com/2021/3/11/22325054/beeple-christies-nft-sale-cost-everydays-69-million|archive-date=2021-03-21|access-date=2021-03-21|publisher=[[The Verge]]|language=en}}</ref><ref>{{Cite news|last=Thaddeus-Johns|first=Josie|date=2021-03-11|title=What Are NFTs, Anyway? One Just Sold for $69 Million.|language=en-US|work=The New York Times|url=https://www.nytimes.com/2021/03/11/arts/design/what-is-an-nft.html|access-date=2021-04-14|issn=0362-4331}}</ref> The purchase resulted in the third-highest auction price achieved for a living artist, after Jeff Koons and David Hockney. Another Beeple piece entitled "Crossroad", consisting of a 10-second video showing animated pedestrians walking past a figure of Donald J. Trump, sold for US$6.6 million at Nifty Gateway, an online cryptocurrency marketplace for digital art.<ref>{{Cite news|last=Reyburn|first=Scott|date=2021-03-11|title=JPG File Sells for $69 Million, as 'NFT Mania' Gathers Pace|language=en-US|work=The New York Times|url=https://www.nytimes.com/2021/03/11/arts/design/nft-auction-christies-beeple.html|access-date=2021-04-14|issn=0362-4331}}</ref><ref>{{Cite web|last1=Solomon|first1=Tessa|last2=Solomon|first2=Tessa|date=2021-02-25|title=Beeple NFT Artwork Sells for $6.6 M. Ahead of Viral Christie's Auction|url=https://www.artnews.com/art-news/news/beeple-nft-artwork-nifty-gateway-sale-1234584701/|access-date=2021-04-14|website=ARTnews.com|language=en-US}}</ref> [[Figma (software)|Figma]] CEO Dylan Field, sold a digital avatar entitled "CryptoPunk #7804" for US$7.5 million to an anonymous investor, as well as a second avatar "Ape, Fedora #6965" for US$1.5 million in February 2021.<ref>{{Cite web|last=Konrad|first=Alex|title=He Sold A Digital 'CryptoPunk' For $7.5 Million. Now Figma CEO Dylan Field Is Ready To Move Into The 'Metaverse.'|url=https://www.forbes.com/sites/alexkonrad/2021/03/18/figma-ceo-dylan-field-talks-cryptopunks-nft-beeple-metaverse/|access-date=2021-04-14|website=Forbes|language=en}}</ref> A 3D-rendered model of a home named "Mars House", created by artist Krista Kim was sold as a piece of digital real estate on the NFT market for over US$500,000.<ref>{{Cite web|date=2021-03-22|title=Artist Krista Kim sells "first NFT digital house" for over $500,000|url=https://www.dezeen.com/2021/03/22/mars-house-krista-kim-nft-news/|access-date=2021-04-15|website=Dezeen|language=en}}</ref> In 2021, a digital portrait of the Fyre Media logo was sold by rapper [[Ja Rule]] at an auction for US$122,000 through his NFT venture "Flipkick", a marketplace for digital art.<ref>{{Cite web|last=Rabouin|first=Dion|title=Ja Rule sells Fyre Festival painting as NFT for $122,000|url=https://www.axios.com/nft-ja-rule-fyre-festival-painting-67cc9e2f-971b-4e31-847b-ef0f7bad2561.html|access-date=2021-04-15|website=Axios|language=en}}</ref> The artwork "Gucci Ghost", created by artist Trevor Andrew, sold as a NFT in the form of a shivering GIF-ghost, for US$3,600 on the NFT market in February 2021.<ref>{{Cite web|title=Nifty Gateway|url=https://niftygateway.com/itemdetail/secondary/0x4140783cc1ba30653a0777126b122931e233ba14/1300010027|access-date=2021-04-15|website=niftygateway.com}}</ref><ref name=":1">{{Cite web|last=April 2021|first=Georgia Coggan 08|title=The best NFT artwork created so far|url=https://www.creativebloq.com/features/nft-artwork|access-date=2021-04-15|website=Creative Bloq|language=en}}</ref> In December 2020, a NFT artwork depicting seasons inside a series of vertical-rising rooms, was sold for US$22,938. The artwork was created by artist Blake Kathryn.<ref name=":1" /> === Collectibles === NFTs can represent collectibles like card collections but in a digital format. In February 2021, a [[LeBron James]] slam dunk NFT card on the [[National Basketball Association|NBA]] [[Top Shot]] platform sold for $208,000.<ref name="Reuters 2021-03-01">{{cite news |url=https://www.reuters.com/article/us-retail-trading-nfts-insight-idUSKCN2AT1HG |title=How a 10-second video clip sold for $6.6 million |work=[[Reuters]] |date=2021-03-01 |accessdate=2021-03-22 }}</ref> === Games === NFTs can also be used to represent [[Game asset|in-game assets]], such as digital plots of land, which are controlled by the user instead of the [[Video game developer|game developer]]. NFTs allow assets to be traded on third-party marketplaces without permission from the game developer. In February 2021, ''Axie Infinity'' recorded a sale of $1.5 million for digital land titles in a single sale.<ref>{{cite web |last1=Quiroz-Gutierrez |first1=Marco |title=NFTs Are Spurring a Digital Land Grab—in Videogame Worlds |url=https://www.wsj.com/articles/nfts-are-spurring-a-digital-land-grabin-videogame-worlds-11616414401 |website=Wall Street Journal |date=22 March 2021}}</ref> === Music === Blockchain and the technology enabling the network have given the opportunity for musicians to tokenize and publish their work as non-fungible tokens. This has extended the list of options for musicians and artists alike to monetize and profit from their music as well as other content surrounding the themes of the music and the artists public image. Additionally, NFTs have provided the opportunity for artists and touring musicians to recuperate lost income to due to the 2020 [[COVID-19 pandemic]] which resulted in music industry revenues to fall nearly 85% <ref>{{Cite news|date=2020-11-18|title=Musicians will lose two-thirds of their income in 2020|language=en-GB|work=BBC News|url=https://www.bbc.com/news/entertainment-arts-54966060|access-date=2021-05-07}}</ref>. Similar to limited edition merchandise or a physical copy of an artist's work, NFTs allow more avenues for fans to connect with and support their favorite bands or artists. NFTs were extremely influential to the music industry within 2021 where many artists across all genres explored the usage of NFTs in their streams of revenue. In February of 2021 alone, NFTs reportedly generated around $25 million within the music industry leading to increased ventures in the medium by more artists <ref>{{Cite web|date=2021-03-12|title=Music-related NFT sales have topped $25m in the past month|url=https://www.musicbusinessworldwide.com/music-related-nft-sales-have-topped-25m-in-the-past-month/|access-date=2021-05-07|website=Music Business Worldwide|language=en-US}}</ref>. On March 3, 2021, rock band [[Kings of Leon]] became one of the first to announce an NFT album release for their project ''[[When You See Yourself]]''. The NFT went on to generate a reported $2 million in sales in which more than quarter of the revenue was donated to charity benefiting live entertainment workers <ref>{{Cite news|last=Steele|first=Anne|date=2021-03-23|title=Musicians Turn to NFTs to Make Up for Lost Revenue|language=en-US|work=Wall Street Journal|url=https://www.wsj.com/articles/nfts-are-music-industrys-latest-big-hit-11616491801|access-date=2021-05-07|issn=0099-9660}}</ref>. Later the same month, American rapper [[Lil Pump]] partnered with the NFT platform [https://sweet.io/ Sweet] to release a special NFT collection. <ref name="Cheddar 2021-03-232">{{cite news|date=2021-03-23|title=CEO of Sweet Talks NFT Partnership with Rapper Lil Pump|work=Cheddar|url=https://cheddar.com/media/ceo-of-sweet-talks-nft-partnership-with-rapper-lil-pump|accessdate=2021-03-29}}</ref><ref name="Vulture 2021-03-182">{{cite news|date=2021-03-18|title=Musician NFT Projects, Ranked by How Many F's I Can Give|work=Vulture|url=https://www.vulture.com/2021/03/music-nft-projects-ranked.html|accessdate=2021-03-29}}</ref><ref name="XXL Mag 2021-03-23-2">{{cite news|date=2021-03-23|title=Rappers and NFTs – How Hip-Hop Is Cashing In on Non-Fungible Tokens|work=XXL Mag|url=https://www.xxlmag.com/rappers-nfts-hip-hop-non-fungible-tokens/|accessdate=2021-03-29}}</ref>. Early of May 2021, the estate of rapper [[XXXTentacion]] announced that it would release five songs and previously never before seen footage from his 2017 tour as an NFT collection<ref>{{Cite web|title=XXXTentacion's Estate Will Drop His Unreleased SoundCloud Songs as NFTs|url=https://www.rollingstone.com/pro/news/xxxtentacion-nft-music-crypto-1165042/|publisher=Rolling Stone}}</ref>. The upcoming release will mark the songwriter as the first artist to have their music posthumously released as an NFT. The artists estate has revealed that company [https://www.yellowheart.io/ YellowHeart] will be helping distribute the collection, who also played a role in the [[Kings of Leon]] release. Record producer [[Mike Dean (record producer)|Mike Dean]] united with artist [[Shepard Fairey|Shepard Fariey]] to release their NFT collection "OBEY 4:22" on April 23 2021. The release serves as the follow up to Dean's 2020 album "4:20". The NFT collection was only available during a 15 minute window in which all of the music of "4:22" was performed and improvised through a series of live streams through Twitch and Instagram live.<ref>{{Cite web|last=Chmielewski|first=Dawn C.|last2=Chmielewski|first2=Dawn C.|date=2018-08-03|title=‘Deadpool 2’ Jumps On The Digital Collectibles Bandwagon|url=https://deadline.com/2018/08/deadpool-2-jumps-digital-collectibles-blockchain-1202439356/|access-date=2021-05-19|website=Deadline|language=en-US}}</ref> <ref>{{Cite web|last1=Halperin|first1=Shirley|last2=Halperin|first2=Shirley|date=2021-04-21|title=Mike Dean and Shepard Fairey Team for NFT Offering 'OBEY 4:22' (EXCLUSIVE)|url=https://variety.com/2021/music/news/mike-dean-shepard-fairey-nft-obey-422-1234955424/|access-date=2021-05-07|website=Variety|language=en-US}}</ref> === Film === The motion picture industry has been slower to react to the boom in NFTs, in part owing to the technical challenges of storing digital movies – which are typically very large in size – onto [[blockchain]] technology, which is designed for smaller file sizes.<ref>{{Cite web|title=Believe the hype? What NFTs mean for film|url=https://www.bfi.org.uk/sight-and-sound/features/nfts-non-fungible-tokens-blockchain-film-funding-revolution-hype?fbclid=IwAR196X9Qdh48maBnv-DKl5rf5BX6wRuBY8ZrZOSP0Bo1IK9w4BDXeLZcpBQ|access-date=2021-04-14|website=BFI|language=en}}</ref> In May 2018, [[20th Century Studios|20th Century Fox]] partnered with Atom Tickets and released limited-edition [[Deadpool 2]] digital posters to promote the film. They were available from Opensea.io and the GFT exchange.<ref>{{Cite web|title=Deadpool posters can now be bought as NFTs|url=https://www.yahoo.com/entertainment/deadpool-posters-now-bought-nfts-110019928.html|access-date=2021-05-19|website=www.yahoo.com|language=en-US}}</ref><ref>{{Cite web|last=Chmielewski|first=Dawn C.|date=2018-08-03|title=‘Deadpool 2’ Jumps On The Digital Collectibles Bandwagon|url=https://deadline.com/2018/08/deadpool-2-jumps-digital-collectibles-blockchain-1202439356/|url-status=live|access-date=2021-05-19|website=Deadline|language=en-US}}</ref> In March 2021,<ref>{{Cite web|title=Claude Lanzmann: Spectres of the Shoah (Exclusive NFT 1st Ed.)|url=https://rarible.com/token/0xd07dc4262bcdbf85190c01c996b4c06a461d2430:287368:0x5bd18a302c34e0c1f5e4a9aac5fffb6b1e4d8e4b|access-date=2021-04-14|website=rarible.com|language=en}}</ref> [[Adam Benzine]]'s [[Academy Awards|Oscar]]-nominated documentary ''[[Claude Lanzmann: Spectres of the Shoah]]'' became the first motion picture, documentary and Academy Award-nominated film to be minted and auctioned as an NFT,<ref>{{Cite web|last=Ravindran|first=Manori|date=2021-03-15|title=NFT Craze Enters Film World: 'Claude Lanzmann' Documentary is First Oscar Nominee to Be Released as Digital Token (EXCLUSIVE)|url=https://variety.com/2021/film/global/nft-movies-first-film-sale-claude-lanzmann-documentary-1234930343/|access-date=2021-04-14|website=Variety|language=en-US}}</ref><ref>{{Cite web|date=2021-03-22|title=NFTs are Confusing Everyone, But the Newest Internet Token is Raking in the Memes|url=https://www.news18.com/news/buzz/nfts-are-confusing-everyone-but-the-newest-internet-token-is-raking-in-the-memes-3559814.html|access-date=2021-04-14|website=www.news18.com|language=en}}</ref> via the Rarible platform.<ref>{{Cite web|title=Claude Lanzmann: Spectres of the Shoah (Exclusive NFT 1st Ed.)|url=https://rarible.com/token/0xd07dc4262bcdbf85190c01c996b4c06a461d2430:287368:0x5bd18a302c34e0c1f5e4a9aac5fffb6b1e4d8e4b|access-date=2021-04-14|website=rarible.com|language=en}}</ref> Several other tentative and experimental releases from filmmakers, studios and agencies have followed, with [[Legendary Entertainment]] announcing it would release an exclusive ''[[Godzilla vs. Kong]]'' NFT collection on the same day the film hit theatres;<ref>{{Cite web|last=Bosselman|first=Haley|date=2021-03-31|title='Godzilla vs. Kong' to Have First Major Motion Picture NFT Art Release|url=https://variety.com/2021/film/news/godzilla-vs-kong-first-major-motion-picture-nft-art-release-1234941253/|access-date=2021-04-14|website=Variety|language=en-US}}</ref> director [[Kevin Smith]] announcing in April 2021 that his forthcoming horror movie ''[[Killroy Was Here]]'' would be released as an NFT;<ref>{{Cite web|last=D'Alessandro|first=Anthony|date=2021-04-13|title=Kevin Smith To Sell Horror Movie 'Killroy Was Here' As NFT, Launches Jay And Silent Bob's Crypto Studio|url=https://deadline.com/2021/04/kevin-smith-killroy-was-here-nft-sale-jay-and-silent-bob-crypto-studio-1234733439/|access-date=2021-04-14|website=Deadline|language=en-US}}</ref> and talent agencies such as [[United Talent Agency|UTA]] and [[Endeavor (company)|Endeavor]] announcing NFT-related ventures.<ref>{{Cite web|date=2021-03-18|title=Behind Hollywood's NFT Cash Grab: "There's No Way This Is a Fad"|url=https://www.hollywoodreporter.com/news/behind-hollywoods-nft-cash-grab-theres-no-way-this-is-a-fad|access-date=2021-04-14|website=The Hollywood Reporter|language=en}}</ref> === Sports === Athletes are starting to take advantage of the NFT boom in various ways. In September 2019, [[National Basketball Association|NBA]] player [[Spencer Dinwiddie]] tokenized his contract so that others can invest into it.<ref>{{cite news |last1=Arnovitz |first1=Kevin |title=How investing $150K in Spencer Dinwiddie would actually work |url=https://www.espn.com/nba/story/_/id/27853850/how-investing-150k-spencer-dinwiddie-actually-work |access-date=April 1, 2021 |work=ESPN |date=October 21, 2019}}</ref><ref name="Business Insider 2019-09-13">{{cite news |url=https://markets.businessinsider.com/news/stocks/spencer-dinwiddie-brooklyn-nets-to-convert-contract-to-digital-token-2019-9-1028523488 |title=Brooklyn Nets guard Spencer Dinwiddie is planning to release a digital token for others to invest in his contract |work=Business Insider |date=2019-09-13 |accessdate=2021-04-01 }}</ref><ref name="The Athletic 2019-09-12">{{cite news |url=https://theathletic.com/1199912/2019/09/12/sources-spencer-dinwiddie-to-convert-his-nba-contract-into-a-secured-digital-investment-heres-what-that-means/ |title=Sources: Spencer Dinwiddie to convert his NBA contract into a secured digital investment. Here's what that means |work=The Athletic |date=2019-09-12 |accessdate=2021-04-01 }}</ref> In addition, Dapper Labs, a blockchain technology-based company, has collaborated with the NBA to create "N.B.A Top Shot", a marketplace for digital highlight clips.<ref>{{Cite news|last=Reyburn|first=Scott|date=2021-03-11|title=JPG File Sells for $69 Million, as 'NFT Mania' Gathers Pace|language=en-US|work=The New York Times|url=https://www.nytimes.com/2021/03/11/arts/design/nft-auction-christies-beeple.html|access-date=2021-04-14|issn=0362-4331}}</ref> === Fashion === In 2019, Nike acquired a patent that allows for blockchain technology to attach cryptographically secured digital assets in the form of NTF's to physical products, such as a pair of sneakers, under the name "CryptoKicks".<ref>{{Cite web|last=Beedham|first=Matthew|date=2019-12-10|title=Nike now holds patent for blockchain-based sneakers called 'CryptoKicks'|url=https://thenextweb.com/news/nike-blockchain-sneakers-cryptokick-patent|access-date=2021-04-14|website=TNW {{!}} Hardfork|language=en}}</ref><ref>{{Cite web|last=Clark|first=Mitchell|date=2021-03-03|title=People are spending millions on NFTs. What? Why?|url=https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq|access-date=2021-04-14|website=The Verge|language=en}}</ref> === Pornography === Some porn stars have also tokenized their [[pornography|pornographic]] work, allowing for the sale of unique content for their customers, though hostility from NFT marketplaces towards pornographic material has presented significant drawbacks for creators.<ref>{{cite web |last1=Dickson |first1=EJ |title=Porn Creators Are Getting In on the NFT Craze |url=https://www.rollingstone.com/culture/culture-features/crypto-nft-sex-workers-porn-performers-1142030/ |website=Rolling Stone |access-date=30 March 2021 |date=16 March 2021}}</ref><ref>{{cite web |last1=Cole |first1=Samantha |title='Building the Cockchain:' How NSFW Artists Are Shaping the Future of NFTs |url=https://www.vice.com/en/article/88aybx/building-the-cockchain-how-nsfw-artists-are-shaping-the-future-of-nfts |website=Vice |access-date=30 March 2021 |date=19 March 2021}}</ref> == Market value == The NFT market has seen rapid growth recently with its value tripling to $250 million in 2020.<ref name=":02">{{Cite web|title=The NFT Market Tripled Last Year, and It's Gaining Even More Momentum in 2021|url=https://www.morningbrew.com/emerging-tech/stories/2021/02/22/nft-market-tripled-last-year-gaining-even-momentum-2021|access-date=2021-04-08|website=Morning Brew}}</ref> In the first three months of 2021 alone, more than $200 million were spent on NFTs.<ref name=":12">{{Cite web|title=NFTs Are Shaking Up the Art World—But They Could Change So Much More|url=https://time.com/5947720/nft-art/|access-date=2021-04-06|website=Time}}</ref> The economic momentum NFTs have in the cryptomarket has exploded because of a trend towards digital collectibles.<ref name=":23" /> NFTs are also accelerating a larger trend of digital economic innovation as the public is increasingly favoring a crypto-economy.<ref name=":23" /> == Standards in blockchains == Specific token standards have been created to support various [[blockchain]] use-cases. These include the [[Ethereum]] ERC-721 standard of ''[[CryptoKitties]],'' and the more recent ERC-1155 standard.<ref name="The bitcoin elite are spending millions">{{Cite web |last=Volpicelli |first=Gian |date=24 February 2021 |title=The bitcoin elite are spending millions on collectable memes |url=https://www.wired.co.uk/article/crypto-art-nft |website=Wired UK}}</ref> The FLOW and [[Bitcoin Cash]] blockchains support NFTs.<ref name="Engadget 2021-03-11 Ref1">{{cite news |url=https://www.engadget.com/nft-explainer-digital-art-collectibles-blockchain-environment-business-investment-cryptocurrency-153023551.html |title=NFTs are both priceless and worthless |work=Engadget |date=2021-03-11 |accessdate=2021-04-09 }}</ref><ref name="Crowdfund Insider 2021-03-07">{{cite news |url=https://www.crowdfundinsider.com/2021/03/172920-uniswap-uni-token-was-shining-star-of-defi-this-past-week-while-ethereum-based-nfts-rising-in-popularity-okex-reports/ |title=Uniswap UNI Token was "Shining Star" of DeFi this Past Week, while Ethereum based NFTs Rising in Popularity, OKEx Reports |work=Crowdfund Insider |date=2021-03-07 |accessdate=2021-04-09 }}</ref> === Ethereum === ERC-721<ref name="The bitcoin elite are spending millions"/> was the first standard for representing non-fungible digital assets on the [[Ethereum]] blockchain. ERC-721 is an inheritable [[Solidity]] [[smart contract]] standard, meaning that developers can create new ERC-721-compliant contracts by importing it from the OpenZeppelin library. ERC-721 provides core methods that allow tracking the owner of a unique identifier, as well as a permissioned way for the owner to transfer the asset to others.<ref name=":2">{{Cite web|title=EIP-721: ERC-721 Non-Fungible Token Standard|url=https://eips.ethereum.org/EIPS/eip-721|access-date=2021-04-05|website=Ethereum Improvement Proposals|language=en}}</ref> The standards in 2021 have evolved into an NFT craze that is now seeing potential unlawful and criminal activities. A recent tax evasion, offshore money laundering scheme regarding [[Binance]] affiliates is making the news because it may be impacting poor artists, investors and clients. Diamond Resorts owner (Nicholas Burke of UK) who owns timeshares with numerous complaints and poor BBB (Better Business Bureau) rating is associated to ruon.ai which is managed by his son an investor/lender to the B-movie industry, Timothy E. Burke.<ref>{{Cite web|date=2021-05-14|title=Binance under investigation by US agencies over money laundering|url=https://protos.com/binance-crypto-exchange-cftc-doj-fbi-money-laundering/|access-date=2021-05-19|website=Protos|language=en-US}}</ref><ref>{{Cite web|title=Why NFT-Art is Not There Yet, A Warning for Artists and Buyers|url=https://www.fantasio.info/2021/03/why-crypto-art-is-not-there-yet-and-why.html|access-date=2021-05-19}}</ref> The ERC-1155 standard<ref name="The bitcoin elite are spending millions"/> offers "semi-fungibility", as well as providing a [[superset]] of ERC-721 functionality (meaning that an ERC-721 asset could be built using ERC-1155). Unlike ERC-721 where a unique ID represents a single asset, the unique ID of an ERC-1155 token represent a class of assets, and there is an additional quantity field to represent the amount of the class that a particular wallet has.<ref name=":3">{{Cite web|title=EIP-1155: ERC-1155 Multi Token Standard|url=https://eips.ethereum.org/EIPS/eip-1155|access-date=2021-04-05|website=Ethereum Improvement Proposals|language=en}}</ref> The assets under the same class are interchangeable, and the user can transfer any amount of assets to others.<ref name=":3" /> ===FLOW=== The FLOW blockchain which uses [[proof of stake]] consensus model supports NFTs, for example NBA Top Shot is run on the FLOW blockchain. [[Cryptokitties]] plans to switch from Ethereum to FLOW in the future.<ref name="Engadget 2021-03-11 Ref1" /> ===Tezos=== [[Tezos]] is a blockchain network that operates on proof of stake and supports the sale of NFT art.<ref>{{cite news |last1=Sparkes |first1=Matthew |title=NFT developers say cryptocurrencies must tackle their carbon emissions|url=https://www.newscientist.com/article/2272687-nft-developers-say-cryptocurrencies-must-tackle-their-carbon-emissions/ |access-date=March 31, 2021 |work=NewScientist |date=March 30, 2021}}</ref> == History == === Early history (2012–2017) === [[File:Etheria presentation Devcon1.jpg|thumb|Presentation of Etheria at DEVCON 1. November 13, 2015.]] The first one-off NFT was created in May 3, 2014 by Kevin McCoy and Anil Dash, live at the Seven on Seven conference at the New Museum in New York City. This experiment represents the first time a non-fungible, tradable blockchain marker was explicitly, via on-chain metadata (enabled by Namecoin), linked to a unique work of art,<ref>{{Cite web|last=Dash|first=Anil|date=2021-04-02|title=NFTs Weren't Supposed to End Like This|url=https://www.theatlantic.com/ideas/archive/2021/04/nfts-werent-supposed-end-like/618488/|access-date=2021-05-05|website=The Atlantic|language=en}}</ref> standing in stark contrast to the multi-unit, fungible, metadata-less "colored coins" of other blockchains and [[Counterparty (platform)|Counterparty]]. In October, 2015, the first fully-fledged NFT project, Etheria, was launched and demonstrated live at DEVCON 1, Ethereum's first developer conference, in London, UK, just three months after the launch of the Ethereum blockchain itself. Most of Etheria's 457 purchasable and tradable hexagonal tiles went unsold for more than 5 years until March 13th, 2021, when renewed interest in NFTs sparked a buying frenzy. Within 24 hours, all tiles of the current version and a prior version, each hardcoded to 1 ETH ($0.43 cents at the time of launch), were sold for a total of $1.4 million.<ref>{{Cite web|title=The Cult of CryptoPunks|url=https://social.techcrunch.com/2021/04/08/the-cult-of-cryptopunks/|access-date=2021-05-05|website=TechCrunch|language=en-US}}</ref> === Mainstream awareness (2017–2021) === In 2017, the Ethereum blockchain started to gain prominence over bitcoin based token platforms, due to Ethereum having a system for token creation and storage built right into its blockchain thus elminating the need for third-party platforms like Counterparty, and was the company to coin the term non-fungible token. Also in 2017, the American studio Larva Labs released [[CryptoPunks]], a project to trade unique cartoon characters, on the Ethereum blockchain.<ref>{{Cite news|date=2021-03-08|title=Should You Buy a Bitcoin-Inspired Image of Lindsay Lohan?|language=en|work=Bloomberg.com|url=https://www.bloomberg.com/news/articles/2021-03-08/bitcoin-btc-mania-boosts-crypto-art-such-as-a-lebron-video-are-nfts-worth-it|access-date=2021-04-07}}</ref><ref name=":132">{{Cite web|last=Abbruzzese|first=Jason|title=This ethereum-based project could change how we think about digital art|url=https://mashable.com/2017/06/16/cryptopunks-ethereum-art-collectibles/|access-date=2021-04-06|website=Mashable|language=en}}</ref><ref>{{Cite journal|last=Chevet|first=Sylve|date=2018-05-10|title=Blockchain Technology and Non-Fungible Tokens: Reshaping Value Chains in Creative Industries|url=https://papers.ssrn.com/abstract=3212662|language=en|location=Rochester, NY|ssrn=3212662}}</ref> In late 2017, another project called [[CryptoKitties]] where players adopt and trade virtual cats was released and quickly went viral, raising a $12.5 million investment and some kitties were selling for over $100,000.<ref>{{Cite news|date=2017-12-04|title=CryptoKitties Mania Overwhelms Ethereum Network's Processing|language=en|work=Bloomberg.com|url=https://www.bloomberg.com/news/articles/2017-12-04/cryptokitties-quickly-becomes-most-widely-used-ethereum-app|access-date=2021-04-07}}</ref><ref>{{Cite web|title=CryptoKitties raises $12M from Andreessen Horowitz and Union Square Ventures|url=https://social.techcrunch.com/2018/03/20/cryptokitties-raises-12m-from-andreessen-horowitz-and-union-square-ventures/|access-date=2021-04-07|website=TechCrunch|language=en-US}}</ref><ref>{{Cite web|last=Cheng|first=Evelyn|date=2017-12-06|title=Meet CryptoKitties, the $100,000 digital beanie babies epitomizing the cryptocurrency mania|url=https://www.cnbc.com/2017/12/06/meet-cryptokitties-the-new-digital-beanie-babies-selling-for-100k.html|access-date=2021-04-07|website=CNBC|language=en}}</ref> In 2018, Decentraland, a blockchain-based virtual world, raised $26 million in an initial coin offering, and had a $20 million internal economy as of September 2018.<ref>{{Cite web|last=Hankin|first=Aaron|title=People are making more than 500% buying property that doesn't actually exist|url=https://www.marketwatch.com/story/people-are-making-more-than-500-buying-property-that-doesnt-actually-exist-2018-09-04|access-date=2021-04-07|website=MarketWatch|language=en-US}}</ref><ref>{{Cite news|date=2018-06-12|title=How to Make a Killing in Virtual Real Estate|language=en|work=Bloomberg.com|url=https://www.bloomberg.com/news/articles/2018-06-12/making-a-killing-in-virtual-real-estate|access-date=2021-04-07}}</ref> In 2019, [[Nike, Inc.|Nike]] patented a system called CryptoKicks that would use NFTs to verify the authenticity of physical sneakers and give a virtual version of the shoe to the customer.<ref>{{Cite news|last=Gallagher|first=Jacob|date=2021-03-15|title=NFTs Are the Biggest Internet Craze. Do They Work for Sneakers?|language=en-US|work=Wall Street Journal|url=https://www.wsj.com/articles/nfts-and-fashion-collectors-pay-big-money-for-virtual-sneakers-11615829266|access-date=2021-04-07|issn=0099-9660}}</ref> In early 2020, the developer of CryptoKitties, Dapper Labs, released the beta version of NBA TopShot, a project to sell tokenized collectibles of NBA highlights.<ref>{{Cite web|title=CryptoKitties developer launches NBA TopShot, a new blockchain-based collectible collab with the NBA|url=https://social.techcrunch.com/2020/05/27/cryptokitties-developer-launches-nba-top-shot-a-new-blockchain-based-collectible-collab-with-the-nba/|access-date=2021-04-09|website=TechCrunch|language=en-US}}</ref> The project was built on top of Flow, a newer and more efficient blockchain compared to Ethereum.<ref name="Engadget 2021-03-11 Ref1" /> Later that year, the project was released to the public and reported over $230 million in gross sales as of February 28, 2021.<ref>{{Cite web|last=Young|first=Jabari|date=2021-02-28|title=People have spent more than $230 million buying and trading digital collectibles of NBA highlights|url=https://www.cnbc.com/2021/02/28/230-million-dollars-spent-on-nba-top-shot.html|access-date=2021-04-09|website=CNBC|language=en}}</ref> === NFT buying frenzy (2021–present) === In 2021 interest in NFT continued to spike, and a number of high-profile sales were made just in the first few months.<ref name=":112">{{Cite news|last=Howcroft|first=Elizabeth|date=2021-03-17|title=Explainer: NFTs are hot. So what are they?|language=en|work=Reuters|url=https://www.reuters.com/article/us-crypto-currency-nft-explainer-idUSKBN2B92MA|access-date=2021-04-06}}</ref> In February 2021, the musician [[Grimes (musician)|Grimes]] sold around $6 million worth of tokens representing digital art on [[Nifty Gateway]].<ref>{{Cite web|last=Kastrenakes|first=Jacob|date=2021-03-01|title=Grimes sold $6 million worth of digital art as NFTs|url=https://www.theverge.com/2021/3/1/22308075/grimes-nft-6-million-sales-nifty-gateway-warnymph|access-date=2021-04-07|website=The Verge|language=en}}</ref> Later that month, an NFT representing the meme animation [[Nyan Cat]] was sold in an Internet marketplace for just under $600,000.<ref>{{Cite news|last=Griffith|first=Erin|date=2021-02-22|title=Why an Animated Flying Cat With a Pop-Tart Body Sold for Almost $600,000|language=en-US|work=The New York Times|url=https://www.nytimes.com/2021/02/22/business/nft-nba-top-shot-crypto.html|access-date=2021-04-07|issn=0362-4331}}</ref> On March 11, 2021, American digital artist Beeple's work ''[[Everydays: the First 5000 Days|Everydays: The First 5000 Days]]'' became the first NFT artwork to be listed at prominent auction house [[Christie's]] and sold for $69.3 million.<ref>{{Cite web|title=Beeple's masterwork: the first purely digital artwork offered at Christie's {{!}} Christie's|url=https://www.christies.com/features/Monumental-collage-by-Beeple-is-first-purely-digital-artwork-NFT-to-come-to-auction-11510-7.aspx|access-date=2021-04-07|website=www.christies.com|language=en}}</ref><ref name="Beeple Brings Crypto to Christie’s">{{Cite news|last=Thaddeus-Johns|first=Josie|date=February 24, 2021|title=Beeple Brings Crypto to Christie's|work=The New York Times|url=https://www.nytimes.com/2021/02/24/arts/design/christies-beeple-nft.html|access-date=March 12, 2021}}</ref> In March 2021, [[Jack Dorsey]], founder of [[Twitter]] and [[Square, Inc.|Square]], sold an NFT representing his first tweet for over $2.5 million.<ref name=":53" /><ref>{{Cite news|title=The Next Frontier of the NFT Gold Rush: Your Tweets|language=en-us|work=Wired|url=https://www.wired.com/story/nft-art-market-tweets/|access-date=2021-04-07|issn=1059-1028}}</ref> The speculative market for NFTs has led more investors to trade at greater volumes and rates.<ref name="Beeple Brings Crypto to Christie’s" /> The buying frenzy of NFTs was called an [[economic bubble]] by experts, who also compared it to the [[Dot-com bubble]].<ref>{{Cite news|last=Reyburn|first=Scott|date=2021-03-30|title=Art's NFT Question: Next Frontier in Trading, or a New Form of Tulip?|language=en-US|work=The New York Times|url=https://www.nytimes.com/2021/03/30/arts/design/nft-bubble.html|access-date=2021-05-03|issn=0362-4331}}</ref><ref>{{Cite news|last=Small|first=Zachary|date=2021-04-28|title=As Auctioneers and Artists Rush Into NFTs, Many Collectors Stay Away|language=en-US|work=The New York Times|url=https://www.nytimes.com/2021/04/28/arts/design/nfts-art-collectors-copyright.html|access-date=2021-05-03|issn=0362-4331}}</ref><ref>{{Cite web|last=GmbH|first=finanzen net|title=Record-breaking digital artist Beeple says the NFT craze is just like the dotcom bubble of the late 1990s|url=https://markets.businessinsider.com/currencies/news/beeple-nft-craze-dotcom-bubble-crypto-art-digital-2021-4-1030357489|access-date=2021-05-03|website=markets.businessinsider.com|language=en-us}}</ref> By mid-April 2021, the buying frenzy had substantially subsided, causing prices to fall significantly, buyers who had gotten in early were reported to have "done supremely well" by ''[[Bloomberg Businessweek]]''.<ref>{{cite news |last1=Tarmy |first1=James |last2=Kharif |first2=Olga |title=These Crypto Bros Want to Be the Guggenheims of NFT Art |url=https://www.bloomberg.com/news/features/2021-04-15/nft-collectors-this-is-who-s-buying-beeple-pak-mad-dog-jones-micah-johnson |access-date=April 29, 2021 |work=[[Bloomberg Businessweek]] |date=April 15, 2021}}</ref><ref>{{Cite web|last=Shaw|first=Anny|title=NFT prices are plummeting. What could this mean for the art world?|url=https://www.cnn.com/style/article/nft-bubble-burst-prices-art-world-tan/index.html|access-date=2021-05-03|website=CNN|language=en}}</ref> == Popular culture == === Popularity === In 2017, NFTs circulated by CryptoKitties, a project developed by Dapper Labs to sell ownership of unique cat avatars, jumped so much in popularity that a surge in demand took up significant transaction space on the Ethereum blockchain and slowed the entire Ethereum network in December of that year.<ref>{{Cite news|date=2017-12-05|title=CryptoKitties craze slows down transactions on Ethereum|language=en-GB|work=BBC News|url=https://www.bbc.com/news/technology-42237162|access-date=2021-04-06}}</ref><ref>{{Cite web|last=CryptoKitties|title=CryptoKitties {{!}} Collect and breed digital cats!|url=https://www.cryptokitties.co/|access-date=2021-04-06|website=CryptoKitties|language=en}}</ref> NFTs have become increasingly popular in the early months of 2021 because of recent high-profile sales.<ref name=":112" /> Some notable NFT sales in 2021 like NBA Top Shot’s video clip of LeBron James selling for $208,000 on February 22, [[3LAU]]’s album bringing in $11.6 million in sales as of February 28, and digital artist Beeple’s piece selling for $69.3 million on March 11, have made NFTs an especially current topic in popular culture.<ref name=":112" /><ref>{{Cite web|last=Rapp|first=Timothy|title=LeBron James Lakers Highlight Sells for Record $208K on NBA Top Shot|url=https://bleacherreport.com/articles/2933000-lebron-james-lakers-highlight-sells-for-record-208k-on-nba-top-shot|access-date=2021-04-06|website=Bleacher Report|language=en}}</ref><ref>{{Cite news|last=Reyburn|first=Scott|date=2021-03-11|title=JPG File Sells for $69 Million, as 'NFT Mania' Gathers Pace|language=en-US|work=The New York Times|url=https://www.nytimes.com/2021/03/11/arts/design/nft-auction-christies-beeple.html|access-date=2021-04-06|issn=0362-4331}}</ref> In March 2021 alone, NFT sales exceeded $220 million making up nearly half of all-time NFT sales ever at the time.<ref>{{Cite web|last=Piven|first=Ben|title=NFT craze: Why are non-fungible tokens all the rage?|url=https://www.aljazeera.com/economy/2021/3/26/nft-craze-why-are-non-fungible-tokens-all-the-rage|access-date=2021-04-06|website=www.aljazeera.com|language=en}}</ref> This renewed interest in NFTs, particularly those in art, music, and sports, have made way into mainstream consciousness, especially amongst the younger generation.<ref>{{Cite web|title=What are NFTs and why are they so popular?|url=https://moneyweek.com/investments/alternative-finance/bitcoin/602928/what-are-nfts-and-why-are-they-so-popular|access-date=2021-04-06|website=MoneyWeek|language=en}}</ref><ref>{{Cite web|last=MacColl|first=Margaux|title=These Gen Z VCs are getting in on the NFT frenzy — here are the 4 NFTs they've collected so far|url=https://www.businessinsider.com/here-are-4-nfts-that-owned-by-gen-z-vcs-2021-3|access-date=2021-04-06|website=Business Insider}}</ref> In a March 27, 2021 [[Saturday Night Live]] episode, cast members even poked fun at this growing niche with a comedy skit on NFTs.<ref>{{Cite web|last=Business|first=Jazmin Goodwin, CNN|title=Still not sure what NFTs are? 'SNL' explains with Eminem parody|url=https://www.cnn.com/2021/03/28/media/nfts-snl-saturday-night-live/index.html|access-date=2021-04-06|website=CNN}}</ref> Many investors are willing to pay high rates to secure and promote NFTs and continue to do so because they anticipate NFTs to be the biggest and most profitable collectibles in the future.<ref name=":17">{{Cite web|title=If you haven't followed NFTs, here's why you should start|url=https://social.techcrunch.com/2021/02/27/if-you-havent-followed-nfts-heres-why-you-should-start/|access-date=2021-04-06|website=TechCrunch|language=en-US}}</ref><ref>{{Cite web|date=2021-04-02|title=What are NFTs and why are they suddenly so popular?|url=https://www.euronews.com/2021/04/02/what-are-nfts-and-why-are-they-suddenly-so-popular|access-date=2021-04-06|website=euronews|language=en}}</ref> Venture capitalist David Pakman has claimed that the growing value of NFTs is redefining the major entertainment industry as of early 2021.<ref>{{Cite web|title=Why every major entertainment company will get into NFTs, according to the VC behind NBA Top Shot|url=https://news.yahoo.com/why-every-major-entertainment-company-131300843.html|access-date=2021-04-06|website=news.yahoo.com|language=en-US}}</ref> Investors like [[Mark Cuban]] have already begun to propose new ways of implementing NFT technology to monetize sports tickets and merchandise sales.<ref>{{Cite web|last=Locke|first=Taylor|date=2021-03-26|title=Mark Cuban: The Dallas Mavericks are thinking about 'turning our tickets into NFTs'|url=https://www.cnbc.com/2021/03/26/mark-cuban-dallas-mavericks-may-use-nfts-for-ticketing.html|access-date=2021-04-06|website=CNBC|language=en}}</ref> == Criticism == === Storage off-chain === NFTs involving digital art generally do not store the file on the blockchain due to its size. The token functions in a way more similar to a certificate of ownership, with a [[web address]] pointing to the piece of art in question, making the art still subject to [[link rot]]. A number of approaches have been devised to remedy this situation, such as using a decentralized storage system like [[IPFS]] to store the file so that the buyer can host the file themselves.<ref>{{cite web |title=It's an NFT Boom. Do You Know Where Your Digital Art Lives? |url=https://www.coindesk.com/its-an-nft-boom-do-you-know-where-your-digital-art-lives |website=CoinDesk |language=en |date=23 February 2021}}</ref><ref>{{cite web |title=What You Don't Know About NFTs Could Hurt You: Non-Fungible Tokens and the Truth About Digital Asset Ownership |url=https://www.dwt.com/insights/2021/03/what-are-non-fungible-tokens |website=Davis Wright Tremaine |language=en}}</ref> === Environmental concerns === NFT purchases and sales are enmeshed in a controversy regarding the high energy use, and consequent [[greenhouse gas emissions]], associated with blockchain transactions.<ref>{{Cite web|last=Calma|first=Justine|date=2021-03-15|title=The climate controversy swirling around NFTs|url=https://www.theverge.com/2021/3/15/22328203/nft-cryptoart-ethereum-blockchain-climate-change|access-date=2021-04-15|website=The Verge|language=en}}</ref> A key aspect of this is the [[Proof of work|proof-of-work]] protocol required to regulate and verify blockchain transactions on public networks, which consumes a large amount of electricity.<ref>{{Cite web|date=2018-11-05|title=Energy cost of 'mining' bitcoin more than twice that of copper or gold|url=http://www.theguardian.com/technology/2018/nov/05/energy-cost-of-mining-bitcoin-more-than-twice-that-of-copper-or-gold|access-date=2021-04-13|website=the Guardian|language=en}}</ref><ref>{{cite journal |last1=Krause|first1=Max|last2=Tolaymat|first2=Thabet|title= Quantification of energy and carbon costs for mining cryptocurrencies |journal=Nature Sustainability |date=2018 |volume=1 |pages=814 |url= https://www.nature.com/articles/s41893-018-0152-7.epdf?sharing_token=ogrkYYbTeyhxNtpO8VyD8tRgN0jAjWel9jnR3ZoTv0NdJEcpPQZqiP9V_5sRM6OFxFiXIrEiqGJgeMqL0bBy3oWWhgCPavrJMPApmX-akgSr_A5uSnPnPPEknP0vEMNn0cVObPWp1NK2O3ttOyulWBx5GKIPbWG95X0V8tpJk9M2Z4q-wzNau-UzDXnrmvGgenXNCUHI7lbX4j0i_fnP9qqMPxjbMls9G9YEFs7oL_A%3D&tracking_referrer=www.theguardian.com |doi=10.1038/s41893-018-0188-8|doi-access=free }}</ref> Estimating the [[carbon footprint]] of a given NFT transaction involves a variety of assumptions about the manner in which the transaction is set up on the blockchain, the behavior of blockchain miners, and the amount of renewable energy being used on these networks. An analogy that’s been described for this is the footprint associated with an additional passenger on a given airline flight.<ref>{{Cite web|last=Calma|first=Justine|date=2021-03-15|title=The climate controversy swirling around NFTs|url=https://www.theverge.com/2021/3/15/22328203/nft-cryptoart-ethereum-blockchain-climate-change|access-date=2021-04-15|website=The Verge|language=en}}</ref><ref>{{Cite web|last= Garg |first= Priyeshu|date=2020-05-16|title= Understanding Ethereum's Gas and Transaction Fees |url= https://cryptobriefing.com/understanding-ethereums-gas-transaction-fees/|website=Crypto Briefing|language=en}}</ref> Some more recent NFT technologies use alternative validation protocols, such as proof of stake, that have much less energy usage for a given validation cycle. Other approaches to reducing electricity include the use of off-chain transactions as part of minting an NFT.<ref>{{Cite web|last=Calma|first=Justine|date=2021-03-15|title=The climate controversy swirling around NFTs|url=https://www.theverge.com/2021/3/15/22328203/nft-cryptoart-ethereum-blockchain-climate-change|access-date=2021-04-15|website=The Verge|language=en}}</ref><ref>{{Cite web|last=Wintermeyer |first=Lawrence |date=2021-03-19|title= Climate-Positive Crypto Art: The Next Big Thing Or NFT Overreach?|url= https://www.forbes.com/sites/lawrencewintermeyer/2021/03/19/climate-positive-crypto-art-the-next-big-thing-or-nft-overreach/?sh=7059390cb0e6|access-date=2021-04-21|website=Forbes|language=en}}</ref> A number of NFT art sites are also looking to address these concerns, and some are moving to using technologies and protocols with lower associated footprints.<ref >{{Cite web|last=Matney|first=Lucas |date=2021-03-30|title= ConsenSys launches a more energy-efficient NFT ecosystem with a project from artist Damien Hirst as its first drop |url= https://techcrunch.com/2021/03/30/consenysys-launches-a-more-energy-efficient-nft-ecosystem-with-a-project-from-artist-damien-hirst-as-its-first-drop/ |access-date=2021-04-21|website=Techcrunch|language=en}}</ref> Others now allow the option of buying carbon offsets when making NFT purchases, although the environmental benefits of this have been questioned.<ref >{{Cite web|last= Di Liscia |first= Valentina |date=2021-04-05|title= Does Carbon Offsetting Really Address the NFT Ecological Dilemma? |url= https://hyperallergic.com/634236/does-carbon-offsetting-really-address-the-nft-ecological-dilemma/ |access-date=2021-04-21|website=Hypoallergic|language=en}}</ref> In some instances, NFT artists have decided against selling some of their own work to limit carbon emission contributions.<ref name=":10">{{Cite web|last=Howson|first=Peter|title=NFTs: why digital art has such a massive carbon footprint|url=http://theconversation.com/nfts-why-digital-art-has-such-a-massive-carbon-footprint-158077|access-date=2021-04-06|website=The Conversation|language=en}}</ref> == See also == * [[List of most expensive non-fungible tokens]] == References == {{reflist}} == External links == *[https://ethereum.org/en/developers/docs/standards/tokens/erc-721/ ERC-721 Standard] {{Cryptocurrencies|state=expanded}} [[Category:Blockchain games]] [[Category:Non-fungible token]] [[Category:Blockchain and auctions]]'