The pros and cons of NFTs

Blockchain technology is being increasingly used by charities in their fundraising, including the RNLI, Save the Children, and The Turing Trust. Most notably that has involved garnering donations using crypto currencies, including Bitcoin.

 

Charities are now looking at carrying this further through fundraising auctions and sales using Non-fungible Tokens (NFTs), which create unique and trackable codes to give digital items value.

 

Using NFTs is not without challenges, however. Their use is a particular concern for conservation and green charities, due to the environmental impact of the technology.

 

 

What are NFTs

 

Before looking at the pros and cons, it is important to understand what NFTs are.

 

They are a form of crypto technology that gives items value. One of the most common uses is for digital art, whereby the holder of the non-fungible token for the item is the unique owner, in the same way the only Mona Lisa by Leonardo Da Vinci is in the Louvre in Paris.

 

NFTs use blockchain technology in a different way than is used with cryptocurrency. While NFTs are non-fungible, which means unique, crypto currencies such as Bitcoin are fungible, as they can be traded for another unit of the currency.

 

 

Benefits of NFTs

 

Fundraising auctions and sales using NFTs are a common way that charities can benefit from this form of crypto technology.

 

Among those to already do this is youth charity One Young World, which is the first voluntary sector organisation in the UK to use NFT art to raise funds.

 

During 2022, it has been collaborating with NFT specialist artist Soy Fira to sell and auction her specially designed crypto art for the charity. This is to raise money to fund scholarships for young people to attend the organisation’s summit later this year.

 

The auction aims to raise £15,000 through digital marketplace OpenSea. In addition, it staged a competition offering its Instagram followers the chance to win the digital art.

 

The link up with Fira and use of NFTs fits one of the central messages of One Young World to promote women’s education and their involvement in STEM (Science, Technology, Engineering, and Maths) subjects.

 

“As a charity, it is important for us to consider the ways we can innovate our fundraising efforts through the use of technology,” said One Young World Co-Founder David Jones.

 

He added: “As technology plays an ever-increasing part in connecting the planet, we need to ensure women are not excluded from specialising in STEM skills that are vital to building this world.

 

“We’re delighted to be joining forces with Soy Fira as she is an inspiration for girls across the world looking to pursue a career in tech.”