Non-fungible tokens, or NFTs, are red-hot in both the literal and figurative senses, as they are fashionable and contribute to global warming. Environmentalists have slammed blockchain supporters in recent months for bringing a technology into the mainstream that requires a lot of energy, but are they correct? While there is a problem, there is also the possibility of a solution.
Cryptocurrency was created in response to widespread dissatisfaction with society’s bank-dependent money model so that ordinary citizens could have complete control over their funds without government intervention.Of course, it has since grown into much more — but the original concept required that the entire financial records be accessible at lightning speed globally, and that the digital ledger, blockchain, be made obtainable on the Internet so that a large network of users’ computers could collaborate to fact-check and detect fraud.It wasn’t an issue when this was a niche topic, but the game has changed.
Analysts estimated in April that casting and sending one NFT over the widespreadEthereumblockchain took the similar amount of energy as powering an average American home for one and a half day: 48.14 kilowatt-hours (kWh). “It happens to be now equal to 3.6 days,” co-founder of One Of, Adam Fell, the Quincy Jones-backed music-focused NFT marketplace, tells Rolling Stone.That’s the reasonone of use to run on Tezos, a different network, and why passionate people like Fell are working hard to find a variety of long-term solutions to a very real problem. OneOf takes pride in producing NFTs that use the same amount of power as sending a Tweet. Is that even possible? The newer Tezosblockchain uses a concept known as “liquid proof-of-stake” (LPoS).
To understand LPoS, you must first understand “proof-of-work” (PoW) and the generation-three “proof-of-stake” model (PoS). Ethereum and Bitcoin are currently using the first- and second-generation PoW concepts. Simply put, as OneOf CEO Lin Dai clarified in a previous Rolling Stone article, “computers must work extremely hard to maintain the network.”The original Bitcoin required “super technical, specific computers that run on specialised chips and calculate mathematical problems impossible to calculate by regular computers.” “It’s so difficult that it costs a lot,” he continues. “Ethereum is more programmable, but it is also more attack-prone.”
With “proof of stake,” computers don’t have to work as hard. For one thing, you don’t require as many computers. Two, they don’t necessitate the use of those high-end processors. As an alternative, simpler fewer, computers stake tokens or assets for the privilege of verifying a transaction. “They’re putting up collateral,” Dai explains.“The network will take your collateral if you misbehave. The larger the network becomes, the more collateral you must put up and the more difficult it is to attack. That’s a whole lot more efficient. The act of recording and verifying a transaction consumes no energy; however, the mathematical problem that Ethereum and Bitcoin require you to solve before you can verify a transaction does.Even Ethereum has acknowledged that ‘proof of stake’ is the way of the future and has been working to improve it.” (While Ethereum 2.0 is on track to become a PoS platform, it has already been postponed after years of development.) It’s expected to arrive by the end of 2021, according to insiders.)
In general, PoS is more energy-efficient than PoW, but there are a few variations within PoS. Users can vote on who gets to validate transactions on the network using delegated proof-of-stake (DPoS), with voting power determined by a user’s stake size.According to FinYear, “the validators with the most votes become delegates, validating transactions and collecting rewards,” and “DPoS can require significant computing power for the validator, depending on the protocol.” Unlike other PoS protocols, Tezos’ LPoS protocol allows anyone to participate in the validation process.Tezos claims that the process is more efficient and less expensive because the entry barrier is lower. (Approved validaters can also delegate their validation rights to other users who act on their behalf.)
If you read and understood everything, take a deep breath and pat yourself on the back.If you didn’t find what you were looking for, feel free to click on the links to find more resources — which will lead you to more links, such as Tezos’ white paper, which is a deep dive reserved for the most ambitious.
There’s also something called proof-of-authority (PoA), which VeChain uses.PoS is based on the amount of tokens a participant is willing to stake, whereas PoA is based on the participant’s identity and reputation. Fredrik Eriksson is one of the founding members of Allauras, a new VeChain-based marketplace that launched last month. He is best known for his composing work and membership in the band Grizfolk.Eriksson claims that their company is carbon neutral.
There are a variety of other eco-conscious steps that blockchain and operating system platforms and creators can take, regardless of which side they are on.On the Ethereum network, for example, the artist known as Beeple, née Mike Winkelmann, released the most luxurious NFT in history — “Everydays: The First 5000 Days,” which sold for $69 million via Christie’s — Winkelmann told The Verge that it costs about $5,000 to offset the emissions from one of his collections at this point in his career.He now pledges that all of his future works will be carbon neutral or negative, “by investing in renewable energy, conservation projects, or technology that absorbs CO2 from the atmosphere.”
Similarly, OneOf announced a new partnership with the Right Here, Right Now Global Climate Alliance on Wednesday, pledging to donate a percentage of its platform revenue to UN Human Rights in support of its global climate change programmes.
Curio, a new kind of NFT marketplace devoted to media and entertainment works, announced their partnership with Aspiration, a new kind of credit card Company that plants trees as you spend money, on Friday.“The approach we’re taking with them entails tying some of our online activity to their tree-planting activities to not only offset our carbon footprint, but create a generativealso, additive value that use to keep going,” says CEO Juan Hernandez, who was previously the co-founder and CEO of OpenFinance. “At the end of the day, it’s just adding value to the environment.”