NFT: a tamper-proof data code as a status symbol

Moreover, “introducing ownership via the blockchain” would only “translate the inequality of the analog world into the digital”. In other words: in Engeler’s eyes, Web3 does not live up to its claim to give individual users back control of their digital lives and counter both commercial and state concentrations of power.

Creating an NFT consumes 142 kilowatt hours of electricity and emits 57 kilograms of carbon dioxide. With the amount of energy you could bake 142 yeast cakes or iron 2130 shirts

In addition to the socio-economic and legal aspects, the ecological aspects were also discussed during the hearing. Because the foundations of the Metaverse are not yet finished, but the chimneys are already clogging up abundantly. Creating an NFT alone consumes 142 kilowatt hours of electricity and emits 57 kilograms of carbon dioxide. With this amount of energy, you could bake 142 yeast cakes or iron 2130 shirts. Consumption for long-term storage is not even included.

The reason for the high power consumption lies in the complex architecture of the blockchain: In order to add a new ledger entry, a complicated cryptographic puzzle must be solved for verification. This requires a lot of computing power and therefore energy. Thousands of digital diggers, the so-called miners, use high-performance computers to compete for the fastest solution to the arithmetic task, for which they then receive a reward in the form of Bitcoin, for example. The all-digital cryptocurrency Bitcoin has at times used more electricity than Argentina, a country of 46 million people. Many countries, especially China, have unplugged miners due to ongoing power outages.

In September, the Ethereum blockchain – the platform on which most art market NFTs are stored – changed its procedure: instead of solving mathematical puzzles as before, transactions are validated via deposits of value from participants to the network – like a savings bank. Software engineers around the world worked on the program’s code for six years, and on September 15, Ethereum inventor Vitalik Buterin was finally able to report completion: the “merge,” as the conversion is called. , was over. Because miners no longer guess with computers, but deposit some kind of deposit as proof, the power consumption of the Ethereum blockchain is reduced by 99%.

Why spend thousands of dollars for a virtual purse?

But the question remains, why would someone spend thousands of dollars buying a virtual Gucci bag that can’t even be worn as a physical accessory? Or for a virtual house you can’t really live in?

American art professor Amy Whitaker, who teaches at New York University, sees crypto art primarily as an alternative currency and status marker, similar to an oil painting you hang on the wall. “The NFT of a handbag, while lacking the functional nature of the bag itself, still possesses the power of belonging and identity projection,” she explains when asked. Celebrities like Justin Bieber or Paris Hilton, who bought their way into the exclusive Bored Ape Yacht Club and bought a digital picture of an ape for hundreds of thousands of dollars, also express group affiliation. However, owning an NFT is not just a status symbol or luxury item, but also a tool to give artists a bigger share of the profits and to democratize the art market as a whole, writes Whitaker.

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