The world has changed drastically in the past year and a half. Our focuses shifted. This gave digital arenas room to flourish.
One of the biggest developments has been in Non Fungible Tokens or NFTs for short. NFTs seemingly came out of nowhere and changed much of how art was viewed. For once, many artists were able to exponentially grow their popularity through the new medium.
Digital works can now amass capital. Without physically acquiring them, how do you own something digitally? NFTs allow collectors to own a token which is authenticated individually.
An NFT follows a similar approach to any cryptocurrency. Since all NFTs and their purchases are tracked, there’s an industry incentive to strictly process and legitimize the tokens, which requires high levels of energy consumption.
Usually, cryptocurrencies like Ethereum and Bitcoin are “mined” in order to make an NFT. Yet, miners will require intensive computer systems aimed at solving increasingly complicated equations to do so.
This is highly pollutant. To solve an equation, computers expend massive amounts of electricity. The production of one chain is equivalent to 211 kg of CO2 being released; that’s an EU resident’s electricity expenditure for a month. And in a booming industry, this is a major environmental concern.
Unfortunately, this has led many to further the production of NFTs solely for monetary gains. Since NFTs can be continuously resold, due to their intrinsic worth, many abuse the medium. This has resulted in an increased saturation in the market, with many creating NFTs only to resell them.
But this isn’t how NFTs have to operate. LGND is an art marketplace that reimagines how NFTs are produced and operated.
On LGND’s platform NFTs are minted with WAX, a cryptocurrency that utilizes a proof of stake legitimation process, unlike the more traditional proof of work blockchains. This allows for it to be 125,000 times more energy-efficient than its Ethereum competitor.
Outside of the more ecologically conscious methods present on LGND’s platform, they’re also passionate about placing importance on the art itself. They are selective of the artists they bring onto their services. They also have a shifting panel of artists called the Artist Council.
The Artist Council aims at continuously empowering the artists. The rotating group represents the intersection between technology and art, making sure the platform runs smoothly for both the talent and the platform.
I had the privilege of taking a deeper dive into LGND’s work by asking Michael Rockwell, CEO, and Michael Blu, Founder, about their devotion to shifting away from harmful industry practices and their insights for the next steps for NFTs.
How would you describe the difference between a proof of stake versus a proof of work blockchain system?
A proof of work blockchain is a system that requires the consensus to be made by solving a complex math problem through brute force computing. This encourages people to build more elaborate, power-hungry computer rigs to “mine” these solutions. This uses mass amounts of energy and produces immense carbon emissions in the process. Proof of stake, on the other hand, does not require brute force and power-hungry hardware to achieve consensus. Groups of people join together on proof of stake protocols to share the brunt of “solving” the mathematical equations. Users pool together and invest their time and their own assets to help solve these equations. Therefore, consensus can be achieved with a fraction of the energy consumption as a proof of work system, and without the need for high-end specialized hardware. As a quick example to drive home the difference these designs can present, WAX, the proof of stake protocol that LGND is built on, is already 222,000 times more energy-efficient than Bitcoin or Ethereum.
Why do proof of work blockchains persist in the current NFT landscape?
Because it is what Bitcoin and Ethereum are both built on. It was the way the system was originally designed and when it was designed its scale was incredibly small compared to what it has grown to today. It took time for people to see the scalability issues in real time and determine the need to create an alternative consensus method. Ethereum has announced a road map to transition to proof of stake, but there are already other blockchains, such as WAX, that are purpose-built as proof-of-stake solutions right out of the gate.
What is the biggest difference present In LGND, from general art auctioning?
In terms of the art market what LGND is doing is decentralizing the entire structure of traditional art sales and the artist’s inclusion in the process. One main thing that makes LGND so revolutionary is that not only is the artist able to sell their work to anyone, anywhere in the world in an instant, but they are also always tied to that piece of art as the authentic, original creator. What this means in practical terms is that for the first time ever, artists are represented in perpetuity on the secondary market. If the owner of an NFT decides to re-sell it later the artist will always and automatically receive a commission on the sale. This is unprecedented in the traditional art world.
On your website it states that purchases can still be made through other cryptocurrencies, is that necessary when entering the NFT market?
With most NFT platforms it is, but LGND makes it as simple as possible for people who are not well-versed in the crypto space to take part in purchasing NFT art. We allow users to pay with traditional credit cards, for example.
What is the future of NFTs?
Beyond digital art, the technology underlying NFTs utilizes the immutable record of blockchain technology, and since the system is immune to misrepresentation, counterfeiting, and manipulation, the technology is a significant evolution in the science of secure digital record keeping. NFT technology lends itself perfectly to be used for official documentation such as deeds of ownership, contracts, identification and credentials, event tickets and more. Any digital asset that needs authentication and proof of provenance will benefit from being minted as an NFT.
What do the current trends in cryptocurrencies (as a whole) spell out for NFTs?
NFTs are on their own path and we’re still in price discovery mode as far as how crypto prices relate to the market. People are just now starting to understand the larger use cases and implementation of NFT technology, so the industry will only continue to grow and evolve in exciting new ways. We like to think of NFTs as blockchain innovation, not necessarily as tied into cryptocurrency as a valuation metric.
LGND embodies innovation conscious of the planet and artists’ needs. At Expedition Air we believe developments like LGND’s are valuable in changing industry standards. This type of NFT makes it possible for artists to get recognized for their work and guarantee they have a positive impact on the environment; without being lumped into an easy cash grab. LGND’s dedicated to having the art speak for itself.
References
Akten, M. A. (2020, December 13). The Unreasonable Ecological Cost of #CryptoArt (Part 1). Medium. https://memoakten.medium.com/the-unreasonable-ecological-cost-of-cryptoart-2221d3eb2053
ABOUT US. (n.d.). LGND. Retrieved May 27, 2021, from https://lgnd.art/about
ALL ABOUT LGND. (n.d.). LGND. Retrieved May 27, 2021, from https://lgnd.art/faq
WAX Celebrates Earth Month. (2021, April 29). WAX. https://wax-io.medium.com/wax-celebrates-earth-month-9f3164749e46