NFTs
What are NFTS
NFTs are custom tokens, like drawings or gifs, that can be created (i.e. ‘minted’) on the blockchain, and then traded. NFTs can be minted as unique one-offs, or they can be limited edition runs (e.g. of a few dozen, hundreds, or thousands). It's a lot of fancy words for saying it's digital work with proof of authenticity. There's a very clear and comprehensive explanation HERE.
NFTs and environmental impact
NFTs and more specifically the blockchain network Ethereum is known for its inefficient crypto puzzles that use a lot of energy and are not eco-friendly. So why would I go to such lengths to start making NFTs?
The Pro’s
Let me start off by saying I am incredibly excited by the idea of purely digital platforms generating sustainable income for digital artists. During the pandemic I’ve come across many challenges as a seller of physical goods that have impacted my income tremendously. Aside from that, I am a very strong believer in technology and digital assets. Just compare it to writing letters or keeping an address book being a thing of the past. This is the next step for the art community and it provides so many options going forward.
That brings me to the next reason for getting into this: they are non-fungible. Meaning they are unique, one of a kind, and nobody can copy it. I’ve been dealing with art thieves, selling my work as their own, and I can tell you that it is in no way fun that people are making money off your hard work. There’s people selling fake dupes of my enamel pins on ali-express and wish and as soon as you take one down, the next one appears. They are being offered at a much cheaper price, because they are cheap knock-offs, and I can see so many more sales on theirs than people actually buying the real pin from me. It’s demotivating and disrespectful to the people actually buying the real limited edition pin. With non-fungible tokens that’s a thing of the past, because it is traceable to its creation and it has its own special authenticity key.
Another reason for my enthusiasm is the idea behind NFTs. You can basically think of it as buying a stock, and when that artist rises in value, so will your stock or ‘NFT’. You’re showing your support of the artist by buying/owning an NFT and you’re always free to sell it again when you no longer want to hold that stock.
And last but not least, whenever the NFT gets resold, a small percentage goes to the creator. This is huge. It counters all the people looking to flip to make an easy buck off the, again, hard work of someone else. With NFTs the creator will always get rewarded for the work they put in it.
So in short, I do think NFTs are the future going forward for digital artists.
Now for the environmental part
I think this is very important and should not be ignored simply because I am excited about the concept of NFTs. I’ve done extensive research on the matter and while there is still a lot of unclarity about impact, it’s safe to say it’s definitely not eco-friendly at this time.
When someone makes, buys, or sells an NFT using Ethereum, they’re responsible for some of the emissions generated by miners from the Ethereum network. What’s still up for debate is whether NFTs are significantly increasing emissions from Ethereum or if they’re just taking on responsibility for emissions that would have been generated by miners anyway. Without NFTs, miners would still be plugging away at puzzles and polluting. And NFTs are still a relatively small portion of all Ethereum transactions.
Figuring out the culpability of NFTs is a little like calculating your share of emissions from a commercial plane flight, according to Joseph Pallant, founder of the nonprofit Blockchain for Climate Foundation. If you’re on the plane, you’re obviously responsible for a portion of its emissions. But if you hadn’t bought the ticket, the plane probably would have taken off with other passengers and polluted the same amount anyway.
That’s doesn’t mean it’s neglectable of course, but it’s good to keep in mind.
Additionally a lot of the mining facilities having been gradually moving to run on clean energy. There’s still not a clear picture of how much cryptocurrencies are mined using renewables, but for bitcoin, for example, the estimates vary from 35 to 80 percent.
What’s also good to know is that Ethereum is working on a new method that would drastically decrease the emissions, called Ethereum 2.0. It would be running on ‘proof of stake’, which means that instead of solving inefficient crypto puzzles as security, it would use part of your crypto as stake. Because this doesn’t require any complicated calculations, Ethereum’s electricity consumption will literally over a day or overnight drop to almost zero.
There’s also other ways to bring down emissions drastically from NFTs, like adding a ‘layer’ on the blockchain or using more eco-friendly blockchains. So just saying ‘All NFTs are super polluting’ is not really true.
Fluff ‘n Tuff on the blockchain
So while it’s definitely true that most NFTs are not eco-friendly at this time, I do feel confident this is an issue that is being tackled and that I can be mindful of it in the decisions that I make: I am launching my NFTs on Opensea only.
Lazy minting
While Opensea does work on the Ethereum blockchain, it uses ‘lazy minting’. That means the NFT is not actually created until it is being purchased, making sure I don’t needlessly create emissions on the blockchain like you would on other NFT marketplaces like Rarible or Mintbase, which require you to mint your piece before it’s available for purchase.
Tezos eco-friendly blockchain
Another HUGE benefit on Opensea is it will be launching Tezos support really soon. The Tezos network is a Proof of Stake blockchain that consumes over two million times less energy than Proof of Work networks like Bitcoin or Ethereum. Low carbon impact and low gas fees are helping Tezos quickly become recognized as the best, most environmentally responsible place to mint, host, and trade clean NFTs.
MATIC sidechain
Finally Opensea uses a MATIC sidechain for ETH, which is a layer 2 solution. Working on this second layer saves a lot of energy because transactions happen “off-chain” — away from the energy-intensive proof-of-work process.
Conclusion
While it’s clear that the Ethereum blockchain uses a lot of energy and is very polluting, taking a mindful approach at NFTs can limit our ecological footstep and set the stage for a new age in digital art. There’s plenty of active solutions to tackle the environmental issue.
While you won’t see me active on marketplaces that solely run on Ethereum because of its polluting nature, I am willing to offer my support to a marketplace like Opensea that is actively pursuing different solutions for this issue and has already implemented some of these key principles.
If you like to know more about the subject, I found that this recent articles are worth the read:
Check the Fluff 'n Tuff NFTs HERE.