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You may have already noticed: big brands are already bringing out their first NFTs. What are we referring to? What's that got to do with the environment?
NFT means "non-fungible token".
The adjective "fungible" is an economic term that refers to a good or asset that can be exchanged for another good or asset of equal value. You cannot exchange a "non-fungible" element for something of equivalent value.
So an NFT is a digital record with a digital certificate of authenticity attached to it, making it unique. By acquiring an NFT, a buyer becomes the owner of a digital asset: a painting, a video, a photograph, a meme, an element in a video game, a film, etc.
Even if this digital asset remains visible to everyone, one person is its official owner and can prove it with this token.
And if you really want to go further on the subject, you can read this article to make sense of it all.
An NFT is based on a blockchain. What, another new term? You're right, I'm finding it hard keeping up with all this.
So this blockchain thing: we're talking about technology for storing and transmitting information that is transparent, secure and without a centrally controlled entity. It has the particularity of being shared simultaneously with all its users and does not depend on any central body. It has the advantage of being fast and secure. The shortcoming is that some blockchains are very energy-intensive. Very broadly speaking (and you don't have to read what follows), the blockchain works by blocks of transactions.To validate a block, you have to run algorithms and solve very complex calculations.It is a way to make the whole thing secure if you like. The only problem is that these algorithms don't really run or calculate by themselves: they need sizeable, energy-intensive servers.
OK, you can pick up here where you stopped reading
To give you an idea, a bitcoin transaction, for example, is the equivalent of using a hair dryer for 20 hours running. Which is likely to damage your hair....
(“what's it for?” you must be still wondering. I get it, so in short: thanks to the blockchain, an NFT is unique. And after? It's “simple”: it's something that's unique, that's what gives it value.)
Because there are alternatives, if not green, that are less problematic for the environment. To give you an idea, we're talking about transfers that consume less energy than sending an e-mail (but it's not a reason to keep clicking on “Reply all” without paying much attention).
If we go back to our hair example, we are talking approximately 2 seconds with the hair dryer switched on.
That is a pretty good question. The reason is apparently simple. In any case, it seemed simple when Valentin Auvinet, Decathlon's NFT leader, explained it to me: compatibility with the largest marketplace (the virtual platform where NFTs are bought and sold). OK, so it matters.
Having said that… but that's not a sufficient enough reason.For example, it is possible to prefer a less energy-intensive mechanism. It's now time to introduce you to a new concept:Proof-of-Stake (PoS). A very different consensus mechanism to Proof-of-Work, which is the “traditional” method with algorithms, and all that.
Proof of Stake is not based on the principle of mining (which involves doing calculations) but… well I asked Valentin to help me out with defining this for you: “It's validation with a voting system. The votes' "weighting" is linked to the number of users who have delegated their power via the amount of cryptocurrency they have.”
Right, remember that PoS consumes less thanks to the way it works. If you really want to go into detail, the Tezos website also attempts to explain: “In the case of proof of stake, the validators are not competing against each other to solve cryptographic puzzles. Instead, the network allocates the creation of blocks based on the percentage of how much a person has staked in the network."
To get an idea, a transfer on the Tezos network consumes approximately 2.4E-4 g CO2 equivalent per cycle, i.e. 2.5 g CO2 equivalent per transaction. To be able to compare, an email consumes 4g CO2 eq. per transaction.
Well, it all depends on perspective.
WWF has tried something recently (early 2022), to raise funds for the conservation of threatened habitats, helping to protect the future of endangered species. It is a perilous exercise because as you will have understood from the above, the very principle of NFT, of blockchain, quickly has a pretty important impact. The NGO has since indicated that it is continuing to look for new ways to get people involved.
In an all together different space, we find Guerlain offering to join the reaverse to help crytpobees. In concrete terms, this means selling NFTs to finance the rewilding of 28 hectares of a nature reserve. “Each Cryptobee possesses unique characteristics and is linked to one of the 1828 plots in the nature reserveThe collection is made up of 4 rarity levels.” This reaverse is based on the Tezos platform, which is considered to be "more responsible" (mentioned above).
The energy sector (including EDF and Engie in France) has also understood the importance of addressing the issue by unveiling a Crypto Climate Accord from 2021.
Inspired by the Paris Agreement, the overall goal of the Crypto Climate Accord (CCA) is to decarbonise the global crypto sector by prioritising climate management and supporting the transition of the entire crypto sector to net zero greenhouse gas emissions by 2040. The agreement includes two specific interim targets:
- to achieve net zero emissions from electricity consumption for CCA signatories by 2030,
- to develop standards, tools and technologies with CCA supporters to accelerate the adoption of blockchains and to verify progress towards achieving 100% renewable energy by the UNFCCC (United Nations Framework Convention on Climate Change) COP30 conference in 2025.
You didn't fully grasp everything? Don't worry, it's normal. Cryptocurrencies and NFTs are still areas that are work in progress.But you've probably got enough to go on to debate it at family meals and food for thought to explore the topic further.... And that's no bad thing!