Assuming you recognize that acquiring a Non-fungible token (NFT) doesn’t guarantee the provenance of the object or prevent its duplication and distribution, perhaps the additional issues identified below will increase your concern.
The article focuses on the complexity associated with paying for an NFT and how Circle makes the payment simple:
“What could prevent NFTs from going mainstream?
According to Acheson, the biggest factor that could potentially slow down or prevent widespread adoption of NFTs is the lack of clarity on how they fit into current regulatory frameworks governing the financial technology and crypto industries. “We are seeing a lot of intellectual property infringements in the NFT world. There’s nothing to stop me from taking a painting that you made, creating an NFT out of it, and then selling it for a high price. And if I’m in a different country, you have no way of finding out who I am because my identity doesn’t need to be disclosed. This has started happening already,” she said.
NFTs have also come under fire for their impact on the environment, since their storage consumes large amounts of electricity. Some estimates suggest that a simple GIF file stored as an NFT could have a carbon footprint equivalent to an EU resident’s electricity usage for two months. But Acheson explained that these ecological costs are temporary, as Ethereum will soon adopt a new system that would drastically reduce its energy use. ‘Ethereum, the blockchain that currently stores a high percentage of NFTs, is running on a similar system to bitcoin that involves a lot of electricity consumption,’ said Acheson. ‘But Ethereum is moving to a totally different system – possibly as soon as the end of this year – which will consume much, much less electricity. And the other blockchains that service the NFT industry are already using much less electricity.’ ”
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
