The environmental cost of NFTs / 1ᵘᵖ Assets on responsible Non-Fungible Tokens
Yep, it’s true that previous and some current versions of NFTs have many inconveniences. We can join in endless discussions about the benefits and disadvantages. We love or hate them.
I want to openly discuss both sides. We, as 1upgaming.io, love the concept of Non-Fungible Tokens but we are also aware (as artists, designers, programmers, users) of the disadvantages. We try to avoid being biased for only the advantages, overcoming problems in previous versions of NFTs.
That moves us to work and research very seriously to have a better version of them. Is not about forcing the current version of the solution, but creating a more mature one.
I’m going to start with the environmental impact and in next posts I’ll discuss about the other problems.
Why NFTs? To begin with
What NFTs are for one person is different for another. For us, it’s a responsible concept and technology which is incomplete but usable by 2021, and that’s going to improve very quickly.
Like in 2008, when Bitcoin revolutionized decentralised economies, now Blockchain is transforming a lot of previous systems, and we know sometimes change is painful and disruptive.
What happened 12 years ago?
In 2008, Proof of Work was a key item for decentralisation, making quite expensive to attack the network. Something needed to create a usable currency/value storage medium that is today.
Mining about 900 Bitcoin everyday, for about $57,600,000 USD a day is a huge amount of value, which makes it profitable to spend a lot of money and energy on mining.
For ETH we can find similar numbers $53,520,533.56 USD per day / 11,520.00 ETH per day
Now, in 2021, we cannot keep using the same technology. The popularity of Blockchain makes that cost excessive for the present and future.
Why keep using Blockchain but ditching Proof of Work?
We discussed previously Polygon and Enjin going carbon negative and using 99.99% less energy than ETH. A key element there is moving from Proof of Work to Proof of Stake.
You can read more about Proof of Stake and Centralization of Stake in PoS. This creates new problems and solutions that have to be time tested.
This is a trend that will slowly spread among the requirements for users and creators. And we hope it’s something that stays for next years.
And what about the cost of minting an NFT?
NFT should be cheaper to be created. Like the materials for a painting, or costs to upload a game on a Store. Digital assets allow us to lower entry costs. The actual value of an NFT should not only come from speculation but utility, history and perceived value.
Instead of having a cost of thousands of USD, their creation should be open and accessible for creators. Using platforms like Enjin and Polygon, again, allow us to reduce those prices, and generate value on the product itself, on the creativity of the artists and designers.
Conclusion
This is a very long topic, with many small details to consider and constantly changing, most of them not interesting enough for every part of the creative process. We are designing easy to use tools, and being responsible.
In next entries we will talk about the remaining inconvenients, stay tuned!
