NFT Digital Art Is a Currency Right Out of Science Fiction

nft digital art

Right now, there’s a lot of talk about NFTs, non-fungible tokens, and NFT digital art; they’ve kind of taken the world by storm.

As someone who is mildly up-to-date in the cryptocurrency scene, the popularity of NFTs came as a bit of a surprise. And it sparked my imagination, too. Watching pieces of digital art being sold at exorbitant prices for clout made me think about the future of our currencies, physical and digital.

Before money, barter and trade was the primary means for getting the goods you needed to survive. A bushel of apples for a flank of meat. It was simple, and a system soon appeared, where certain items would be valued higher than others, based on abundance, time and labor investment, etc.

I originally thought that NFTs might be a futuristic barter and trade system years from now, if we ever came to a global currency fallout. But I soon realized that possibility wasn’t feasible for NFTs in their current state, and I’ll explain why.

But first, let’s break down how NFTs and NFT digital art works.

How Do NFTs Work?

An NFT is a digital asset that operates on blockchain technology, the same infrastructure used for cryptocurrencies.

Many creators create digital art and sell them as NFTs. There are all kinds of NFTs on marketplaces like OpenSea: graphic design art, music, trading cards, video game skins, etc.

As I mentioned, NFTs are non-fungible tokens, which essentially means that one NFT is not equal to another.

A fungible currency is where a single amount is exactly the same as another amount. Like a $1 bill. It’s $1, and no matter how many times you trade that $1 bill for other $1 bills, you’ll always have $1.

Cryptocurrencies are fungible tokens. A single Bitcoin is the same price as any other single Bitcoin.

NFTs are different because they cannot be exchanged for other NFTs. Each NFT has a unique digital signature, making it a one-of-a-kind asset.

Is There Money in NFT Digital Art?

The idea of the NFT baffled me when I first learned about it, and to be honest, it still does. Why would people pay exorbitant amounts of cryptocurrency to buy a piece of art, like a song or a collage, when they could view that art online for free?

Well, the blockchain NFTs are built on provides a traceable ID and transaction history, which essentially means when you buy an NFT, you obtain ownership of it. As opposed to paying a streaming service like Spotify, which you a license to listen to music, buying music as an NFT solidifies you as the owner of it.

Like if you were to buy a famous painting at an auction, but gone digital.

Initially, this practice seemed like nothing more than a flex, a show of wealth. After all, NFTs aren’t tradeable, meaning you either own it for life, or have to find someone willing to pay you for it, sometimes less than what you got it for.

So how is it the NFT market is so big, and yet, seemingly have no clear purpose? Apparently, NFT trading is quickly becoming a popular means of making money, and creators are benefiting.

NFTs, the New, Dystopian Currency?

The concept of NFTs has been around since about 2014, but it experienced a large uptick in popularity in 2021. People are trading NFTs—buying highly sought-after pieces and reselling them at a premium.

The problem with NFT digital art trading, though, is that it’s not driven by any economic principles. It’s purely market-dependent. So, if you spent $2.9 million on an NFT of Jack Dorsey’s first tweet, you better hope someone out there wants it more than you do, or you’re down $3 mil.

But creators are reaping the benefits of NFT trading.

Every time an NFT they created is sold, they receive a kickback from that sale. So if a gif they made as an NFT gets traded around multiple times, they’ll make a percentage of that on top of however much they sold it for in the first place.

No one knows how long NFT trading will be around – the demand for them might die out in a few months, or they could become the future of traceable, authenticated currency.

When I think of a dystopian, cyberpunk worlds, I usually think of cityscapes ruled by tech moguls. The industrialists that sell the tech the world is built on, getting filthy rich at everyone’s expense.

But with a few modifications to the NFT idea, it could become the barter and trade currency of the future. And the richest people of all would be the artists.

How to Make NFTs a Viable Currency

For NFTs to be a viable currency of the future, they’d have to be able to be traded for other NFTs. Smaller NFT tokens could be used for goods or services, and then could be traded on a digital marketplace for more expensive NFTs.

A good example of this concept in action is the Counterstrike: Global Offensive marketplace on Steam. CS:GO is a first person shooter, originating back in the 1990s and early 2000s. In-game weapon skins have a real-life value, a dollar amount.

You can buy skins online directly from the Steam marketplace, and they often retain their value or increase in price as they become more desirable. You can trade skins with other players, increase the value of your skins by adding expensive in-game stickers, trade lesser-grade skins for more high-quality ones, etc. etc.

If NFTs operated like the existing CS:GO marketplace, then they would become much more viable as a currency. Just like the bushel of apples for a flank of steak example, a handful of smaller NFT tokens for a more valuable, larger token. You could trade a small gif NFT for apples, and a Snoop Dogg album NFT for a flank of meat.

It’s a really weird concept, that art could essentially become the lifeblood of a society. Because people always say, ‘oh, the art and culture are what makes a society great’ but in this case, art is literally the means of survival.

Problems with NFTs

One of the primary problems with using NFT digital art as currency in the cyperpunk future is the environmental impact.

Most NFTs run on the Ethereum or Bitcoin blockchain, and those cryptocurrencies use a lot of power. So much so that cryptocurrencies are causing a serious problem for the environment.

A recent report from CNBC found that Bitcoin mining creates 35.95 million tons of carbon dioxide emissions each year. More than half of the world’s cryptocurrency mining takes place in China, a country that still largely uses coal as a source of electricity.

Bitcoin uses about 707 kWh of electricity, whereas Ethereum uses about 62 kWh. And the output of emissions from Ethereum mining should decrease with the implementation of Ethereum 2.0, which will decrease power consumption to about 1/10,000th of the current rate.

The widespread use of NFTs or crypto on a societal level would be catastrophic for the environment. Without significant improvements to the blockchain and hardware technology, digital currencies could bring about a dystopian future. And not the cool kind, either (pun intended).

For now, NFTs stand as a neat method for digital art, and if you’re lucky, some profit too. But there needs to be significant change for it to become a popular, futuristic barter and trade.