The leader of South Korea’s largest cryptocurrency exchange has promised that its NFTs with K-pop stars BTS will be “environmentally friendly”, following a reaction from environmentally aware young fans.
Upbit launched its crypto art market in November and plans to issue a series of irreplaceable tokens with BTS members in a joint venture with Hybe to manage the boy band.
But members of the band’s powerful young fan base have criticized the NFT and crypto industry in general for energy consumption involved in mining and tracking token ownership.
Sirgoo Lee, CEO of Upbit operator Dunamu, told the Financial Times in an interview that the joint venture with Hybe will use “low-carbon, environmentally friendly” technology to build NFTs.
Lee said Upbit’s NFT market uses blockchain technology developed by another Dunamu subsidiary, Lambda256, which claims to use 99.99 percent less energy on its Luniverse platform than leading blockchain-based platforms such as Ethereum.
“We will try to explain to the fans that this is not harmful to the environment,” Lee said.
The first token bought on the platform, a picture of a girl holding a cat, by artist Yang Koala called “Mirage Cat 3,” sold in November for about $ 173,000 worth of bitcoin.
Luniverse claims that the energy consumed for its entire blockchain network, including NFT, is estimated at “about 842.53 kWh per year,” an amount roughly equal to the monthly electricity consumption of a U.S. residential consumer.
South Korea has one of the world’s largest digital currency markets. The Korean Won is the third most commonly used currency for bitcoin trading after the dollar and yen, accounting for 3.4 percent of global trading, according to Coinhills, an industrial tracker.
Lee also said there is a need for global action to address issues such as money laundering and cyber theft.
In 2019, cybercriminals hacked the Upbit Stock Exchange, stealing the cryptocurrency Ethereum worth approximately $ 49 million.
“One of my nightmares is to be hacked and lose everything [the investors’] money. It’s a huge responsibility and it keeps you awake at night, “Lee said.
“I’m not worried about going to jail, I’m more worried about our investors stabbing me to death.”
Many young South Koreans are enthusiastic buyers of digital assets, partly motivated by high youth unemployment and rising housing prices, experts say.
Crypto madness has led to an increase in the price of bitcoin in South Korea compared to other countries. Bitcoin is currently trading at a premium of 2-3 percent compared to that in the U.S., reducing the gap that reached 20 percent last year.
Lee has rejected criticism that indebted young Koreans are attracted to NFTs and large profits from cryptocurrency trading are exposed to excessive financial risk, arguing that their understanding of asset class is underestimated.
“In the West, young people grew up playing consoles after school, while in Korea these young people go online to play games, they are used to collecting and buying digital items,” Lee said. “These young guys realize that there is that value in digital assets.”
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