With sales topping over $2.5 billion during the first half of 2021, it shouldn’t come as a surprise that both the crypto community and mainstream creators are launching NFTs in hopes of driving revenue and engagement.
It’s also interesting to point out that blockchain analytics firm Moonstream found that around 17% of addresses control more than 80% of all NFTs on Ethereum, demonstrating the vast inequality that still exists in the NFT market.
Although this is the case, it’s important to note that nonfungible tokens are still a very new and early concept.
For example, blockchain payments firm Ripple recently announced an investment in the NFT marketplace Mintable, which would allow the platform to integrate with the XRP Ledger to enable creators to securely and efficiently sell their NFTs.
Given Ripple’s recent involvement in the NFT space, Cointelegraph spoke to David Schwartz, Ripple’s chief technology officer, during NFT NYC to learn more about the company’s growing interest in nonfungible tokens.
It’s not a technical problem — we know how to not consume that much energy, it’s just a matter of convincing people to adopt the technologies that are more climate-friendly.
We initially started to look at how people wanted to use NFTs and realized that a lot of the challenges people were facing were due to the technology being very primitive.
DS: Yes, the reason why proof-of-work, or PoW, systems like Bitcoin consume energy is that they are specifically designed to create artificial scarcity.
The only reason you’d want to do this is if you are getting a cut of the money.
In the XRP Ledger, no one gets transaction fees, so no one wants high fees.
There are things you can do on Ethereum though that you can’t do on the XRP Ledger.
We don’t have those capabilities on the XRP Ledger today, but you can mint NFTs.
Part of Ethereum’s low transaction speed and cost is due to the fact that you can build more flexible technologies on the blockchain.
On the XRP Ledger, the cost is a lot lower, so if you are building an NFT on Ethereum it would have to be worth at least $500, and even then the fees would be close to $100.
I think most of the use cases today are collectibles broadly speaking, like works of art, things that connect to digital art, things that connect to musicians.
For instance, if all you are using XRP for is moving value, and you have something whose value is the same, then these should serve as substitutes in the market.
For instance, if you have 500 XRP to use in a DEX and you just can’t do it today at any price, then Wrapped XRP would allow you to get the tokenomics of XRP and the semantics of Ethereum.
Our vision is to imagine that every financial institution in the world is able to settle every fiat currency with every other financial institution in seconds.
For instance, the United States couldn’t build such a system because Saudi Arabia wouldn’t use it.
Another thing we are working on is federated side chains that allow assets to move freely between blockchains.
What federated sidechains do is it allows you to innovate at the lowest level, so users can build a blockchain with whatever fees they want and whatever assets they want.
This is great for developers who need to solve specific problems, or who want to make changes to other blockchains and need to convince people that those changes work and are safe.