Digital Furniture Rely On NFT & A Single Transaction Has A Footprint Of Around 340 kWh & 211 Kg CO2.
Updated: Oct 2, 2022
As I write this article, I am comfortably seated on a sofa worth $100. And it suddenly reminded me of yesterday, when I counted upon the best-looking designer chairs on the market and found out that a digital furniture line sold for nearly half a million dollars. However, the funny part is that these were only computer-generated files, and no auction of physical collectibles took place.
The most you can do out of virtual furniture is get it furnished on your own or upload it to Minecraft as this bidder did.
Understandably, designers make money for their hard work, and they obviously should. It is, however, a matter of concern when the activity negatively contributes to our lives. You must be asking, How?
To answer this question, I have written this article. So without further ado, let's get going.
Digital Furniture Market In 2022.
To understand the market landscape of nft furniture, we first need to go through the NFT market.
As a crucial component of Web3, Non-fungible Tokens have dominated their growth in the last couple of years. However, because of the involvement of unpredictable circumstances, fluctuations are common. In 2022 itself, the graph inclined between January and February. After the mid of the second month, it declined significantly until mid-April, when it started to gain momentum again.
An index showed that collectors made transactions over $37 billion on NFT marketplaces in 2022 as of May 1. The number is close and rapidly approaching $40 billion total for 2021.
Furthermore, despite fluctuations, the number of active buyers and sellers remains strong.
Digital furniture is a sub-category of the NFT crypto art segment. The growth of this sector remains steady as well, and hopefully, a successful project can bring in a spike. NFT operates as a whole section, so the market activity increases when a project like that enters.
The availability of data for digital furniture transactions is not yet present, but analyzing the amount that Andres made in February 2022 and calculating accordingly, a good day can account for close to 1% of whole NFT sales. However, the number of designers in this industry is still low, and it's not common to see a sale like that plus, it is a rough figure we have taken into account. It only explains the future probability and the self-reliance of designers with great ideas.
Positive Impact.
One of the things we have come across is how NFT is transforming the furniture market. We know how online stores provide an opportunity for local businesses to reach more people. Pre-orders and Kickstarter help projects gain exposure and allocate funds. Similarly, NFT marketplaces provide an opportunity for designers to not look out for participants or institutions to make a design public or successful. Instead, they look out for interest in it. If successful, they can furnish a physical form and sell it to buyers with virtual rights.
While self-reliance is benefitting, furniture consumers might see price cuts in the future.
How? Suppose I am a new manufacturer of a chair worth $200, but my competitor is selling the same quality at a similar cost or even lower. They already have a market base, and for me to create one, I need to lower the price or reach out to influencers. The second option demands funds and still doesn't guarantee complete exposure. In this situation, I can work on my design and renders and ultimately approach buyers on one of these marketplaces. It is a plan from future when metaverse becomes common but consider how much I can save and earn.
So digital furniture can lead to resource management, and as per critics, they can also lead to lower landfills as only the orders will be produced.
Negative Impact.
As you read this article, hundreds of NFT transactions take place. One of the outcomes we may consider is that it is an earning source for lakhs of people. But at what cost?
See, NFTs have a deadly impact on our environment, and this is just the tip of the iceberg. We as a society pay attention to this tip while not the actual problems that it may contribute to very soon.
According to a study that analyzed data from SuperRare, an average crypto-art transaction has a footprint of around 340 kWh and 211 kg CO2. The real-world comparison says that it “is equivalent to a EU resident total electric power consumption for more than a month, with emissions equivalent to driving for 1,000 km or flying for 2 hours.”
However, this is only the tip of the iceberg, as I pointed out. The real problem lies with its impact on the economy.
To explain this, take Feb, 2022, as an example. According to the available data, 35,669 nft crypto art transactions went through (30 days prior 15 Feb 2022). The amount of CO2 added to our environment on this day was 7,526,159 Kg.
These activities only add to a failure of our environmental goals, such as the Paris agreement. One study suggests that the U.S. would lose as much as $6 trillion in the coming decades if it fails to meet the Paris climate goals.
In addition, we thrive on a connected economy model. So when one country is dipping, others will not lead to good times as well. Not meeting these goals will reduce the global GDP by 25%.
The future does not seem too bright, but the present is not either. A study reveals that India lost 259 billion hours of labor annually between 2001 and 2020 due to extensive humid heat. It cost India $624 billion- almost 7% of its GDP in 2017.
Climate change is also resulting in unbearable circumstances around the world. You must be aware of it through news, unfortunately, personal experiences, or word of mouth. The other day I was going through a report explaining the Australian living. One of the charts in this report showcased the increase in Home insurance premiums in 2021- 5.9%, the highest in the last seven years.
Conclusion.
Our present is an indicator of, what inflation or recession means, and the thing we are talking about is even higher. So, the impacts are significant, and probably, the solution only relies on us to make better calls.
Digital furniture has a momentum of growth, but being aware of the situations that disturb us presently and in the future is necessary. In the end, I will like to know your thoughts and have a brief discussion over it, so welcome to the comment section.