NFT Market Crashes

As inflation continues to become a dominant theme of the economy, the market for Non Fungable Tokens (NFTs) has crashed, with the controversial products losing value.

According to a report from The Wall Street Journal, the NFT market is “flatlining,” and is down as much as 92 percent since September 2021.

Per the report, the 92 percent fall in sales has been met with a drop of “active wallets” by 88 percent since November.

As Gizmodoexplains, “NFTs…are digital collectibles encoded onto a blockchain, the same technology that powers cryptocurrencies, creating a unique digital watermark signifying ownership of the digital rights to an asset.”

According to Protos, NFTs tracked in the Nonfungible.com database peaked on 3 May, booking $102 million in NFT transactions in a single day. However, the past week saw that number collapse to $19.4 million, a 90 percent drop from the peak.

One potential reason that has been suggested is the rise in inflation.

Those in favour of NFTs have promoted them as a potential way for artists to be paid lucratively.

Much like Bitcoins, however,  ‘making’ an NFT is an energy exhaustive process that takes about 26.5 terawatt hours of electricity a year. As one study found, as of right now, there is virtually no renewable energy used cryptocurrency mining. The same study estimated that the mining of cryptocurrencies consume more energy than gold or copper.

Technology columnist Alejandro De La Garza has labelled NFTs, “humanity’s most direct way of making money by polluting the planet.”

Despite the crash, the Catholic Church is among those looking to join the NFT market.

Sensorium, a VR company, is partnering with Humanity 2.0, a Vatican-led nonprofit”. This partnership is working on an NFT gallery of art stored in the Vatican’s museum.

Humanity 2.0 chair Fr Philip Larrey recently said that the project will seek to “democratise art, making it more widely available to people around the world regardless of their socio-economic and geographical limitations.”