🐯 Incorporating Sustainability 🌱 into the hype of Non-fungible Tokens (NFTs)? 💎
🐯 Incorporating Sustainability 🌱 into the hype of Non-fungible Tokens (NFTs)? 💎
Dig down into NFT's sustainability aspects with concrete examples of its amazing power and its underlying dark secrets.
The first-ever tweet of Twitter CEO Jack Dorsey sold for $2.9 million. A digital trading card of LeBron James’ dunk sold for $208,000. Kristy Kim sold a digital, 3D-rendered house for $500,000. These were all sold as NFTs, or non-fungible tokens: digital works of art with no tangible form. Celebrated by some as a way for artists to reap financial rewards, many condemn this crypto-art as a prominent polluter due to its substantial carbon footprint. Despite the negative effects that they cause on the environment, NFTs are the new frontier of digital art.
In this article, we will dig down into NFT’s sustainability aspects with concrete examples of its amazing power and its underlying dark secrets.
💎 Anthology of the hype.
A non-fungible token, in essence, is a unit of data stored on a digital ledger. NFTs can be anything digital - photos, videos, audios, drawings, music. The list of digital files goes on. The fastly growing excitement around NFTs, however, is mainly using this technology to trade digital art.
NFTs allow individuals to buy and sell ownership of digital assets, and the blockchain keeps track of who has ownership of the file. The owner can buy a verified token of the file, providing digital evidence that the art is theirs. Although the original artist can still retain the copyright and reproduction rights just like with physical artwork, NFTs are designed to provide the owner with something that can not be copied. When the owner sells an NFT, they are paid in Ethereum cryptocurrency.
NFTs emerged and circulated largely in 2017, by CryptoKitties: the first mainstream project in crypto-collectibles developed by Dapper Labs, to sell ownership of unique cat avatars. This grew so high in popularity and demand, taking up significant transaction space on the Ethereum blockchain. The average price for one of these cat cards was about US$60 back then.
Now, however, the NFT market value has tripled in 2020, reaching more than $250 million. During the first quarter of 2021, NFT sales exceeded $2 billion. With their unique string of code, they have taken over the art world in the past few months. Many companies have launched NFT-based digital collectible products. By generating digital equivalents of physical collectibles, physical collectibles have also been turned into digital assets.
The rapid growth of NFTs is illustrated below, in the figure.
🌱 NFT is cool… But not so green.
As everyone jumps on the NFT bandwagon, however, the effect of NFTs on the climate emergency is undeniable. How can a piece of art have such a large carbon footprint?
This is due to a process known as “minting.” In order to mint a piece of art on the blockchain and become an owner, an outstanding amount of computing power and energy is used in order to solve complex puzzles. This is a process known as mining. The blockchain that hosts NFTs, Ethereum, uses a proof of work (PoW) method to create these digital assets. This creates a perpetuating cycle of computer power and large warehouses - leading to an exponentially growing carbon footprint in an accelerating, competitive market.
Digiconomist estimates that the carbon emissions of a single Ethereum transaction stands at 33.4kg CO2. Although difficult to calculate how much responsibility the NFT industry holds for Ethereum’s carbon footprint, digital artist and programer Memo Atken estimates that specifically for an NFT transaction, the carbon footprint stands at 48kg CO2. This still does not include the carbon emissions generated every time an NFT is minted or sold. After analyzing approximately 18,000 NFTs, Atken was able to conclude that an average NFT causes a carbon footprint that is equivalent to more than a month of electricity consumption for an average person living in the European Union. This includes the transactions involved with NFTs, including bidding, minting, sales, transfer of ownership, etc. To put this into perspective, these emissions are estimated to be 10 times higher than that of an average Ethereum transaction.
🐯 The World-first sustainable NFT?
This technology and trend however is definitely an empowering breakthrough in the art, gaming, and maybe even in the sustainability space!
Some visionary entrepreneurs and social activists start to use NFT for noble applications.
As part of the Atlas Society initiative, visionary Thai sustainability entrepreneur, Arch Wongchindawest got featured by World Economic Forum for his sustainability NFT project. That project will blow your mind…
Wildchain enables you to play an NFT game on your phone while helping save endangered species. Here’s how
Wildchain allows smartphone users to support real-life conservation projects across the world by digitally adopting rare animals.
Players nurture an endangered animal that is matched to a real-life counterpart.
If a player plants a tree in the game, the non-profit organization plants one in the real world.
More than 35,500 species are threatened with extinction, according to the International Union for Conservation of Nature’s (IUCN) Red List. Now a new smartphone game enables players to support conservation efforts from the comfort of their sofa.
Wildchain lets users adopt animals, plant trees, and support real-life conservation projects by creating what the non-profit organization calls a “digital sanctuary”.
Hatch an endangered animal through NFT
Players start with a magical egg that can hatch into one of the world’s most endangered animals, such as a cheetah or elephant.
These are matched to a real-life counterpart based on animal population numbers. For example, IUCN estimates there are 6,674 cheetahs left in the world – so there are the exact same number in the game.
Once their digital animal is hatched, players need to create its ideal habitat. This can involve anything from planting trees or grass to keeping it safe from poachers and natural disasters.
Blockchain-based Wildchain works by gamifying giving in a similar way to popular games like Tamagotchi and Pokémon Go.
Players are rewarded for their care with ‘Seeds’, the in-game currency that can be used to purchase items and improve the animal’s sanctuary.
NFT money spent funds wildlife conservation schemes
Wildchain’s concept, which you can help fund through Atlas, currently at the funding stage, will use money spent in the game (from selling eggs, optional ads, and in-game items) to fund wildlife protection projects in partnership with national parks & reserves.
The game is part of Wildchain’s overall aim to build a global movement that inspires and empowers individuals and organizations to support conservation efforts.
The wildlife data behind the game is sourced from the IUCN, while the environmental information comes from the Organization for Economic Cooperation and Development, and UN Environment.
With a million species of animal and plant species threatened with extinction, Wildchain hopes actions in the game can trigger real-world impact.
If you want to discover more of these initiatives, support Atlas Society by subscribing to our newsletter.
Co-edited by Angie Jafari & Djoann Fal. Sources here, here, here, and here.