In the previous article we posted, we introduced the concept of NFTs and how it is going to be a great way to empower artists. This technology allows artists to safely sell their artworks and protect their copyrights online.
The Non-Fungible Token trap:
Now, we want to focus on the risks and solutions regarding NFTs. Seth Godin, an American author claims “Like most traps, they’re mysterious and then appealing and then it’s too late”. He describes what kind of trap NFTs represent depending on if you’re an artist, a buyer, or the rest of us (people not interested in crypto or NFTs).
Creators are now minting everything, it has become so easy to create an NFT that some are minting anything and everything. Buyers are blinded by the fact that there’s no limit on the supply, and they are crazy to believe that all NFTs have value. On the contrary, there are so many NFTs that only a small percentage of them have an interesting resale value.
Finally, Seth Godin adds that the rest of us will have to pay for these NFTs. Because they consume so much energy when they don’t have a real utility in our world, “It is an ongoing waste that creates little in ongoing value”. Whereas most technological innovations are trying to find alternatives to consume less energy, NFTs are currently not eco-friendly enough.
There are different ways to consume less energy when minting and selling NFTs which is what we’re going to explore now.
Firstly, at Satoshi Studio we mint our digital certificates (which are NFTs) on Arianee’s side-blockchain. A side-blockchain is a secondary blockchain connected to the main blockchain. In Arianee’s case, their blockchain is connected to the Ethereum blockchain meaning we can share our NFTs on that blockchain even if it was minted on Arianee’s. This allows us to consume 100x less energy when minting NFTs than a regular marketplace.
Secondly, there is a solution called « lazy minting ». In 2020, the NFT marketplace OpenSea decided to launch a free NFT minting service by using this solution. Lazy minting is the fact that an NFT isn’t minted until its first purchase. Even though the process still requires a lot of energy, it ends up producing 2 or 3 times less carbon footprint which is still pretty good.
Finally, we recently discovered another great way to make NFTs a bit more eco-friendly. Sven Eberwein is a pioneering crypto artist. He was part of the $MEME project who ended up going viral and catapulted him at the forefront of the crypto scene. He was really excited about all this but started feeling remorse when he thought about the ecological impact of crypto and NFTs.
This is when he started looking for solutions and discovered that you can embed CO2 offsets in an NFT. This means that when a customer buys his NFT artwork, the art becomes both a token and the owner of the CO2 offset credit. And since it is minted on blockchain, if the buyers resale the NFT, it will still include the CO2 offset.
Overall, there are many ways to reduce the energy needed when creating, minting, selling, and exchanging NFTs. At Satoshi Studio, we are very careful when it comes to environmental impact and we wouldn’t launch our new project ‘Futures Factory’ if we haven’t found solutions to continue to reduce our carbon footprint.