NFT’s Impact
Different people, places, technologies, and companies enter the cryptoasset sphere; they focus on NFTs or Non-fungible Tokens. Often, minting or creating NFTs enables entities to generate hype or engage with their consumer base. However, as NFTs invade the marketplace more, their long-term sustainability raises questions – specifically about the environment.
In global music news, famous Korean pop band BTS had attempted to enter the NFT space but was subject to intense public scrutiny.
“The BTS fan base criticized the NFT push immediately. Hashtags opposing the move hit Twitter’s top-trending list last month, and the movement has continued since then. The bulk of the criticism centers on the large energy consumption needed for NFTs, which rely on blockchain technology and are usually bought with cryptocurrencies” (wsj.com)Technologically, the advocates are talking about the environmental impact that NFTs create. When mining an NFT on the Ethereum blockchain, users must pay a “gas-tax” fee associated with the literal fuel used to power the computer placing the item on the network-shared ledger or blockchain. These gas taxes have been linked to extreme power consumption across the globe, relating to the use of fossil fuels, and in turn, climate change. This obstacle, the blockchain’s environmental impact, is one of the most prolific and wide-standing public arguments against cryptocurrency. As the cryptoasset space matures, we will continue to learn more about how and what impacts are changing the global economy—eventually answering the crypto question. At Nimrod Yaron & Co., we serve as a professional resource for individuals and companies invested in the global marketplace. We are specifically assisting with intelligent tax planning. Contact us today to learn about all of the services we offer.
