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An NFT - or Non-Fungible Token - is a digital marker that can be attached to digital items as a unique identifier. Because NFTs are stored on the Ethereum blockchain, it is considered to be as safe and secure as most other digital currencies like Bitcoin and Ethereum. NFTs can be attached to any digital assets such as photos, videos, documents and even video game items to mark them as unique, one-of-a-kind assets that you can store or trade with other people.

Despite NFTs being a relatively new thing, the technology behind it is very simple. In fact, it’s so simple that anyone with a working internet connection can make their own NFTs and attempt to sell it. You don’t even need to hire an artist to make a digital painting to sell either. Anything from a screenshot of a tweet to a random picture you took with your phone to a ten-hour YouTube video made entirely of static can be made into an NFT. 

It is perhaps this ease that has caused the NFT craze of 2021. Many online personalities, tech youtubers and even famous musicians are trying to get into the market. It is not uncommon to see someone with millions of social media followers make a post saying they support a certain NFT group while encouraging their followers to buy it as well. The only value of an NFT is whatever the community is willing to pay for it, so it is in the best interest of whoever created the NFT to ensure a large number of people want to buy it so they themselves can make a profit.

Since cryptocurrencies and NFTs are still very new, there are no official regulations or laws governing their usage. Some groups have been taking advantage of the wild west nature of the crypto landscape to make morally and legally questionable acts. There have been multiple recent instances of prominent figures in the online entertainment industry - including members of FaZe Clan (of esports fame) and the Paul brothers (of YouTube fame) - encouraging their followers and fans to buy certain cryptocurrencies and NFT tokens only to rapidly sell off their own tokens to cash in on the sudden influx of new buyers, thus leaving everyone else with worthless assets when the price crashes. This is known as a rug pull in the financial world and is illegal in regulated markets.

The world of cryptoart may be exploding in price and popularity, but it comes at a steep price. To combat the rise of rug pulls and scam artists, a wave of new youtubers and bloggers have risen who document questionable crypto and NFT projects to help the community stay alert. In addition to this, recent findings indicate that the Ethereum blockchain technology that NFTs are based on is very detrimental to the environment. A single NFT sale may use up more energy than your entire house uses in a week.

As bleak as this sounds, we have to remember that blockchain technology, cryptocurrencies and even NFTs all started with the intention of making our digital lives easier. Digital signatures using NFTs can be used for legal documents or even to transfer ownership of physical items, instead of selling pictures of Nyan Cat for $600,000. We still have a long way to go before the crypto world stabilizes enough for the average consumer to be able to easily step in and make use of it.

About the author: Maldivian Gaming League is a team of e-sports organizers and competition promoters based in the Maldives. For more information, check them out on Facebook or Instagram.