Imagine if your car could pump CO2 into the environment all while sitting in your garage. I know, it’s a dream few have dared to realise but now you can! And you don’t even need to own the actual physical car! Just a picture of the car and some code will deliver plenty of sweet, planet warming carbon straight into the Earth’s atmosphere.
You guys, we are getting really good at this.
If you don’t know what an NFT is, please for the love of god back out of this blog post now and move to a shack in Montana with no electricity or internet. Preserve your precious innocence. For the rest of you sinners I’ll let the Verge explain it, because I’ve listened to podcasts, read articles and at least started reading a book on blockchains and NFTs and still the only way I can explain any of this is simply to say: Humans decide something has value, and suddenly it does, like tulip bulbs or Beanie Babies, except in this case, there’s no “thing.” Here’s what the Verge says:
WHAT IS AN NFT? WHAT DOES NFT STAND FOR?
Non-fungible token.
That doesn’t make it any clearer.
Right, sorry. “Non-fungible” more or less means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible — trade one for another bitcoin, and you’ll have exactly the same thing. A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different. You gave up a Squirtle, and got a 1909 T206 Honus Wagner, which StadiumTalk calls “the Mona Lisa of baseball cards.” (I’ll take their word for it.)
How do NFTs work?
At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also supports these NFTs, which store extra information that makes them work differently from, say, an ETH coin. It is worth noting that other blockchains can implement their own versions of NFTs. (Some already have.)
What NFTGarage is hoping to do is create NFTs based on actual real world cars using a picture and stats. The car will exist in two places, real life and as a NFT, and their values won’t necessarily correlate with one another, though rarer cars will be considered rarer NFTs. Owners of the physical car can become “dealers” by registering their real life cars though NFTGarage. You can buy NFTs of other people’s cars as well as sets of NFTs made up of a mixture of the three categories: Normal (the cheapest NFT) Rare or Unique. The company plans to release its own token for the trading, Garage Coin, on the Binance blockchain later this year.
While still in the beginning stages, NFTGarage makes a lot of promises in its press release. One is that both real world and virtual car shows will be held, which are fun! More people should just go look at cars, though scrolling through still images of them with baseball card-style stats would probably get real old real fast. And should the actual car ever wreck, the virtual car will live on, sorta, at least as a picture as part of the blockchain (which, come to think of it, is also how pictures not on a blockchain work.)
I also see the potential in the gaming aspect promised by multiple NFT creators, but never really pulled off. Racing games are already extremely popular, not to mention competitive. An addicting enough game would create a vibrant marketplace for NFTs. Real world vehicles also come with readily available stats and appearances that might cut down on development time for such a game, though car manufacturers tend to be very particular about how and when their vehicles are featured in games. And as anyone who has read a post from our own Adam Ismail, designing an actually enjoyable racing game is tricky. It’s unclear how this would shake out, as gaming really is only briefly referred to as a potential aspect of NFTGarage and is listed as the last step in NFTGarage’s vision. Plans get even hazier the longer you read its press release:
There will be partnerships with car manufacturers and distributors around the World.
Crowdfunding programs linked to new automotive start-ups based on decentralised finance system will be launched.
There will be a market for collectible automotive investments through NFT technology in defence of automotive heritage.
“Will be” is doing a lot of work in there.
There are a few problems with NFTs. First, it’s remarkably easy to steal them, scam them, or even just lose them due to the highly decentralize nature of NFTs. Your NFT (and the money it represents) can be there one minute and gone the next, as traders of Bored Ape NFTs found out late last year. One trader incorrectly typed the price of their Bored Ape as 0.75 Ether instead of 75, instantly wiping out $US297,000 ($406,920), according to CNBC. The Ape was snapped up by a bot and relisted for $US245,000 ($335,675). Manhattan Chelsea art gallery owner Todd Kramer had $US2.3 ($3) million worth of NFTs stolen on New Years’ Eve, according to Vice. The site where Kramer traded, OpenSea, immediately suspended trading of the stolen Apes, drawing criticism from folks online:
“Crypto is great because it’s unregulated”
“Guys you have to obey property laws for monkey pictures” pic.twitter.com/cBBxe3AbIP— (((Jellote))): Sicko Mode 🇵🇸🤝🇮🇪 (@Jellote) December 31, 2021
Kramer was criticised for not storing the Apes in an offline wallet, but if something happens to that physical piece of hardware those Apes are just as gone. See, deregulated, unprotected assets is the whole point. If agencies or organisations start stepping into the marketplace, you haven’t disrupted anything, you’ve just invented a shitty bank. NFTs were also promised as a way to protect and directly pay artists, though several creators have come forward saying their art was actually stolen in order to create NFTs.
But whether you believe blockchain is the future or not, the undeniable problem with them is this: they normally create monstrous amounts of pollution in order to create ownership documentation for things that just aren’t real. The direct carbon cost of NFTs is hard to pin down, as they are so new, but we do know the environmental toll caused by some of the most popular cryptocurrencies used to trade NFTs. How do these various cryptocurrencies and tokens translate into real-world warming? The Verge once again has a great breakdown:
But here’s why there’s probably a hell of a lot of greenhouse gas emissions tied to NFTs: they’re largely bought and sold in marketplaces like Nifty Gateway and SuperRare that use the cryptocurrency Ethereum. Ethereum, like most major cryptocurrencies, is built on a system called “proof of work” that is incredibly energy hungry. There’s a fee associated with making a transaction on Ethereum — and, ironically, that fee is called “gas.”
Proof of work acts as a sort of security system for cryptocurrencies like Ethereum and bitcoin since there’s no third party, like a bank, that oversees transactions. To keep financial records secure, the system forces people to solve complex puzzles using energy-guzzling machines. Solving the puzzles lets users, or “miners,” add a new “block” of verified transactions to a decentralized ledger called the blockchain. The miner then gets new tokens or transaction fees as a reward. The process is incredibly energy inefficient on purpose. The idea is that using up inordinate amounts of electricity — and probably paying a lot for it — makes it less profitable for someone to muck up the ledger. As a result, Ethereum uses about as much electricity as the entire country of Libya.
Now Ethereum is working on this issue as are many of the other big names in cryptocurrency. NFTGarage says that its token, Garage Coin, will be fully distributed and won’t be mined, which massively cuts down on associated carbon emissions. The company is also using Binance blockchain, which claims to use much less energy than the big guys like Bitcoin or Ethereum by using a different set of calculations known as proof-of-authority rather than proof-of-work. It’s not the greenest (or cleanest, Bloomberg reported last year that the feds found more funds tied to criminal activity flowed through Binance than any other crypto exchange). Though claiming to be energy efficient, Biance CEO Changpeng Zhao became a bit defensive after Elon Musk criticised energy-intense cryptos:
When you use electricity to run cars, it’s environmentally friendly.
When you use electricity to run the most efficient financial networks in the world, it’s an environmental concern.
😂🤷🤷♀️
— CZ 🔶 Binance (@cz_binance) May 31, 2021
It is incredibly difficult, especially as a laymen like myself, to separate the hype from the truth in the volatile world of crypto exchanges, NFTs and tokens. But I’m going to (unbelievably) side with Elon Musk here. This seems like a waste of resources that makes cars, an already serious source of pollution, even a little bit dirtier for no concrete reason. Research from the International Energy Agency found that one-fifth of global CO2 production comes from transportation and a full 45 per cent of that figure produced by passenger vehicles. The Environmental Protection Agency notes that a single typical passenger vehicle already emits about 4.6 metric tons of carbon dioxide per year.
I love cars, I really do. Even with the planet slowly sizzling and sweating like a hot dog on 7-11 rollers, I defend people who still run classic gas guzzlers and sports cars. Those vehicles aren’t just rolling works of art making the physical world a more interesting place, they’re also useful tools. They do something, whether it’s delighting folks at a car show, thrilling their owner with power and performance or transporting humans and goods. Making cars even dirtier while adding nothing feels like a betrayal of what makes cars great, or at least defensible in our warming world, in the first place.