Investors in the crypto world are likely paying close attention to news of the ArtStation NFT launch. After initially announcing plans of a proof-of-concept for non-fungible tokens (NFTs), ArtStation has reversed course. Why? And what else do you need to know?
To start, ArtStation bills itself as an online community for artists and their supporters. And in a way, it really is a one-stop shop for artists to get their work online and reach an audience. Through website building and portfolio tools, artists upload images, videos, sketches and more. Then, they can use audience analytics tools and blogging functionality to better connect with supporters. ArtStation also offers a way for artists to sell digital work and has an education section.
Yesterday, ArtStation announced plans to offer yet another tool for its community in the form of non-fungible tokens. As we have covered in recent weeks, NFT art is rapidly gaining mainstream awareness and interest. Artists like Grimes, Beeple, Steve Aoki, Azealia Banks and the Kings of Leon have all turned to the digital asset class to sell their work. ArtStation said it would launch a proof of concept for NFTs, giving buyers access to the original art files. The ArtStation NFTs launch announcement also came with confirmation of a drop on March 10. Participating artists were supposed to include Craig Mullins, Jakub Rozalski, Bobby Chiu and Alena Aenami.
Then, just a few hours later, the ArtStation NFTs launch came to a halt. The company decided to cancel its plans in response to community feedback on social media.
Art Station NFTs: Takeaways From the Cancelled Launch
Although a follow-up press release from ArtStation did not make explicit the nature of the feedback, many Twitter (NYSE:TWTR) users expressed frustration over the environmental impact of NFTs.
As Bobby Allyn wrote for NPR, this environmental impact has attracted scrutiny. This is because NFTs rely on the blockchain, which requires “immense” computing power. Allyn cites estimates that say one crypto transaction uses more power than a U.S. household over the course of a day. In the press release, ArtStation says, “It’s our hope that at some point in the future we’ll be able to find a solution that is equitable and ecologically sound.”
So what comes next? ArtStation appears committed to the potential that NFTs can unlock for artists like those who use its platform. And ArtStation is not alone. As Marc Hogan wrote for Pitchfork, NFTs allow musicians to directly sell to fans. This cuts out the middle men, and helps avoid the streaming business model. The same goes for other artists — selling an NFT helps creators avoid auction houses and other players in the business that take a cut.
One solution that may be equitable and ecologically sound comes from advancements to the underlying blockchain technology. Most NFTs run on two standards of the Ethereum blockchain, which is working to become less carbon intensive. In the meantime, other options are popping up, promising to lessen the environmental impact of NFTs.
To better understand the ArtStation NFT news, check out this complete NFT guide from InvestorPlace Markets Analyst Tom Yeung.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.
