Debates around NFTs and Blockchain

It is well known that blockchain is a highly polarized technology. While there is a large fan community, many are critical of the technology. What applies to countless discussion topics is what we want to highlight here in two points: 1. The question of how NFTs can have value and 2. whether they justify the enormous energy consumption that is required (obviously there is not going to be a clear answer to either of these questions).

How can NFTs be valuable?

How can an NFT be valuable, if anyone can just copy the file and get an exact replica?

The following articles present different arguments: for example, that the value is not in the (copyable) file but in the (immutable) proof of ownership. It is also argued that value is generated for artists in particular, as they can participate in future (high) sales prices through smart contracts. Moreover, NFTs offer the basis for creating completely new market mechanisms which artist can use to their benefits. Following this argumentation, the value lies particularly within the ecosystem.

Contrary to this, others call NFTs a bubble and describe the value as purely speculative.

Blockchain is often said to be bad for the environment. So, are NFTs too? Are there attempts to improve this?
With the rise of blockchain and bitcoin, the energy consumption of the technology has often been criticized. Particularly illustrative is the comparison that bitcoin mining alone consumes more energy than the entire country of Argentina (BBC Article). A good overview of why the technology is so energy intensive is given in the NYT article linked below. Nevertheless, there are approaches to improving the impact on the environment for example by making structural changes to blockchains (Ethereum blog). To what extent this makes up for the energy demand is up to everyone to judge.

Since NFTs are based on blockchains like Ethereum, they also drive the environmental impact of the technology (see NYT article). As with cryptocurrencies, there are also approaches to reduce this impact, for example by utilizing individual blocks better (Times article). Here, too, as above, everyone must make their own assessment.

Blockchain in the real world

El Salvador
Recently, another example from the crypto world has repeatedly found its way into the news: El Salvador has recognized Bitcoin as an official means of payment.

The impact of this law on various areas is summarized in the following PWC document:

Final thoughts

This concludes our article on blockchain. We hope that the collection of resources was helpful. Personally, we are particularly thrilled by the way the technology is linked to the applications and new types of business that result from it. How about you? Which aspects do you find interesting? (or not)? What open questions do you have? We are looking forward to read your comments.