NFT Sustainability Part Two: Offering Solutions | Ingram Yuzek Gainen Carroll & Bertolotti, LLP
As we discussed in the previous article, NFT Sustainability Part One: Defining the Problem, there are huge environmental costs associated with minting and transferring NFTs. This is especially true for NFTs created using energy-intensive methods, such as the proof-of-work consensus mechanism, which result in an increased carbon footprint. The “work” in proof-of-work comes in the form of mining, where crypto miners use a lot of energy in the form of computing power. It is this process that has such a harmful effect on the environment.
Minting an NFT does not need to use large amounts of energy. NFTs created using the proof-of-stake consensus mechanism are designed to limit damage to the environment. The good news is that there are a growing number of blockchain platforms that use consensus mechanisms that use far less energy. In addition, another significant benefit comes from minimizing the environmental impact of NFT creation – lower gas taxes. Gas fees are the payments each buyer must make to access a blockchain network, and the fees are linked to the platform’s energy usage.
The following is a non-exhaustive list of energy-efficient blockchain platforms and eco-friendly initiatives that help combat climate change and environmental concerns.
Algorand
Algorand, the official blockchain platform of FIFA, is a proof-of-stake blockchain technology company. Designed to be one of the most efficient and greenest blockchains available, Algorand was built as a green blockchain with a focus on environmental impact since its inception. Algorand’s founder, Silvio Micali, explained as far back as 2018 his focus on sustainability with next-generation technology. “Algorand developed a public blockchain that runs on a version of proof-of-stake, which drives power consumption to almost zero … at a fundamental level,” said Silvio Micali, “I care about the planet.” The Algorand blockchain supports Aorist, a climate-focused NFT blockchain for artists, as well as several other NFT marketplaces, such as Algogems.
Cardano
Cardano is another blockchain platform that is known for being environmentally friendly. Cardano is built on Ouroboros’ proof-of-stake consensus protocol. Ouroboros is the first provably secure proof-of-stake protocol, and the first blockchain protocol based on peer-reviewed research. Cardano is the first blockchain to implement it. Ouroboros enables the Cardano network’s decentralization, allowing it to sustainably scale to global demands without compromising security. NFT marketplaces hosted on Cardano include CNFT and Galaxy of Art.
Flow
Flow is a proof-of-stake blockchain platform designed to be the foundation of Web3 and the open metaverse, supporting decentralized consumer-scale applications, NFTs, DeFi, DAOs, PFP projects and more. With Flow’s proof-of-stake consensus mechanism, minting an NFT requires less energy than an Instagram post.
Hedera Hashgraph
The Hedera proof-of-stake public network is a sustainable, enterprise-grade public network for the decentralized economy. Hedera has adopted environmental sustainability as a core value and is committed to carbon-negative network operation by purchasing carbon offsets quarterly, with amounts determined by a third-party assessment provider. Aria Exchange, which uses the Hedera Hashgraph network to create its tokens, recently partnered with the National Basketball Retired Players Association to bring NFTs to market. “We’ve created the most advanced, sustainable NFT exchange that addresses crypto climate issues while providing collectors and consumers with unparalleled experiences and content,” said Darren Mann, co-CEO of Aria Network.
One of
OneOf is a green NFT platform deeply committed to a sustainable and inclusive blockchain future. OneOf is a platform that supports NFTs on multiple energy-efficient blockchains, connecting fans and collectors to iconic musicians, athletes and brands. This platform provides credit card integration and purchasing NFTs costs $0 in blockchain gas fees. Minting an NFT on OneOf’s platform uses up to 2 million times less energy than proof-of-work networks. A leader in diversity, over 80% of the collections curated by OneOf come from minority or female creators.
Solana
Solana is a public blockchain platform with smart contract functionality. In May 2021, Solana Foundation contracted an energy and climate consultant to help frame the environmental impact of transactions conducted on Solana’s decentralized blockchain. Transactions are the basic building blocks of Solana: buying an NFT, making a trade, or any other activity you can perform using Solana are all transactions. As a proof-of-stake network, the security of the Solana network is not dependent on energy usage. On this platform, there is no need for energy-intensive mining, which means that the network is extremely environmentally efficient. The Solana blockchain supports a wide range of NFT marketplaces, including Magic Eden and Solanart.
