I mean, they’re testing out the technology. And Bitcoin, at the time, is worth basically nothing. I mean, each Bitcoin is worth a tiny fraction of a cent. So they’re doing things like buying pizza.
When I say Bitcoin, you say what?
So there was this programer in Florida who sort of famously bought two pizzas from Papa John’s for 10,000 Bitcoin, which, at the time, was worth about $25.
I just told people I wanted a pizza and I want to pay with Bitcoin. I didn’t want a gift card. I didn’t want some weird exchange. I want to give you Bitcoin and you give me pizza.
People start developing new ways to spend Bitcoin. People are sending it to each other instead of sending a Venmo payment or a PayPal payment. Some people are buying clothes with it. Some websites start accepting it as a form of payment.
How much to charge for nft art
Recognizing that blockchain is a technology that won’t disappear, but remains an enterprise fraught with energy expenditures and lifestyle expectations, many artists concerned with its impact are seeking out better practices rather than abandoning the NFT space.
There is already a longer history of such artistic considerations to draw on, critique, and incorporate into the conversation. Back in 2017, Julian Oliver produced a media work and fully functional prototype for harnessing wind-energy to mine cryptocurrency, bringing the costs for miners down considerably. The proceeds from Harvest helped fund climate-change research, shifting the increasingly privatized power grid to a decentralized model.
How to pay for nft art
But why does Ethereum gas exist?
Why Do NFTs Need Gas?
NFTs do not need gas to exist. Transactions involving NFTS (buying/selling NFT art) or potential modifications to the NFT. Unused Gas is returned to the user as gas at the time of transaction is an estimate.
In the NFT world, gas serves two main purposes:
- Incentive for validators.
Ethereum is a global computer, with all transactions being validated multiple times across Ethereum nodes. The gas fee goes toward payment for participation as a validating node in the Ethereum network.
- Security. If transactions were free, it would be really easy and without consequence for someone to perform a distributed denial of service (DDoS) attack, or just get stuck in an infinite loop accidentally.
Or just have sloppy code running that burns resources inefficiently.
This can be problematic due to equivalent buying power (technically called “purchasing power parity”) and standard of living disparities. For example, if the exact same microwave is purchased by a group of individuals around the world its price would vary depending upon geographic location, corresponding standard of living costs, and the relative regional currency value. In other words although the oven has the same intrinsic value materially and as a finished usable object, the money used to buy it does not, leading to, in some instances, significant disparity.
Note: an individual in the UK purchasing an oven from the USA would be able to acquire a more expensive item for the same amount of GB Pounds because the currency rate (currently) provides more US Dollars in exchange for GB Pound (e.g.
£100 GBP = $170).
£548 GBP, a loss of £377 GBP.
In $42,000 USD converted to approximately; – £22,000 Jan 2009 – £26,266 Jan 2010 – £26,791 Jan 2012 – £25,000 May 2014 – £31,000 Jan 2021
Note also that being located in a Country with a weak currency does not necessarily mean being able to make more money working Internationally because currency valuations, and the expectations that carries with the client, works against the jobbing freelancer – clients expect things to be cheap.
asset sites as a comparison ^
An alternative approach to determining the cost of freelance art/design is to look at web site’s offering comparable assets for sale, services like TurboSquid for example.
Bitcoin, the largest cryptocurrency, also uses the energy intensive proof-of-work model.
According to an estimate backed up by independent researchers, the creation of an average NFT has a stunning environmental footprint of over 200 kilograms of planet-warming carbon, equivalent to driving 500 miles in a typical American gasoline-powered car.
Other attempts to calculate the energy use of blockchain have also arrived at gargantuan numbers. Researchers at Cambridge University have estimated that mining Bitcoin uses more electricity than entire countries like Argentina, Sweden or Pakistan.
It becomes this viral phenomenon that people are very excited about.
Now it’s starting to actually gain some traction.
And as it gets more attention and people get more excited about it, The price of Bitcoin keeps rising.
Bitcoins are booming.
It reaches $5,000 a Bitcoin and then $10,000 a Bitcoin. And now it’s up well past $50,000 a Bitcoin.
Cash is no longer king.
And the reason why the price of Bitcoin keeps going up and up is because there are a finite number of bitcoins, so people are willing to pay more and more to acquire the limited number of them.
Exactly. And so as that’s happening, people are starting to create other different cryptocurrencies. Some of them are very serious, like Ethereum is a new one that pops up. But there are also joke coins. And people call them shit-coins sometimes.
Exactly. It’s a way to keep track of ownership and where something came from.
OK, so Kevin, there are these things, nonfungible tokens, or NFTs. What do people do with them?
So for a while people are just sort of thinking about the theoretical possibility of NFTs.
And then in about 2017, people actually start creating them. So the first NFTs are kind of these crypto art projects. There’s this thing called crypto punks, which is this set of cartoon characters that people started treating as digital action figures. And other people would take memes, like popular graphics, and turn them into NFTs and sell the NFTs, this thing that represented, like, this is the one true version of this meme.
NFT marketplaces like OpenSea now support some L2s, specifically Polygon in the case of OpenSea. See our guide on what wrapped ETH is and how to use a side chain here.
Be careful though: not all side chains are created equally. For example, Optimism is based on what is called an “optimistic rollup”.
A very abbreviated explanation of how this works is that Optimism sacrifices security in the name of speed, with one result being potential long wait times to move your ETH from the L2 back to the L1 Ethereum mainnet.
We are not advocating for one side chain or another; each has pros and cons. Polygon follows a different implementation philosophy and you may find it faster to shift funds out of some L2s as needed.
There are also new solutions emerging, such as Hop, that enable transfer of assets across L2s.
How to Avoid Paying High Gas Fees:
- Use Layer 2 sidechains. Hands-down, this is the easiest way to avoid high gas fees (varies based on side chains and how fast the user needs to transact). Some NFTs may only be available on a particular side chain, so it is beneficial to get used to navigating them.
You may not always have control over timing (if there is a super-exciting mint going on, you may have to just eat the gas). But if you can find a less busy time to process your transaction, this will be beneficial.
- Combine transactions.