NFTs Can Be OK for the Environment and Great for Artists, Gamers, & Collectors

February 6, 2022

by: 

Hi! I’m Alex West. I’m a gamer, a dad, and an environmentalist. I am also the president of Many Hands, a company making NFT-based games. Friends ask me: “Alex, I thought you’re a good guy, how can you possibly be using NFTs? They destroy the environment, are being used to rip off artists’ work, and are Ponzi schemes!” These are serious and worthy concerns that I share.

Almost every technology humans have invented is dual use, it can be used maliciously or beneficially. Some uses of NFTs in the past have been careless and exploitative, but NFTs can be a great technology. In this post I’ll use the project I’m working on, Verses TCG, to talk about how NFTs can respect the environment, make artists the money they deserve, and bring real and lasting utility to gamers and collectors alike.

Low Carbon Blockchains Solve Environmental Issues

We’ve all heard it: BitCoin uses as much energy annually as Argentina, a country with 45 million people in it; with no plans to change this at all. Ethereum uses as much energy annually as Ecuador, a country with nearly 18 million people; it plans to change this, but the change keeps getting delayed. With this massive energy use comes a massive carbon footprint, contributing to global warming. Many Hands’ commitment to the environment is in its company charter, so we needed to find something better.

Fortunately, next generation alternatives already exist. We are building the Verses TCG on the Tezos blockchain, which uses as much energy annually as just 17 people. Yes, that’s right, 1,000,000x less power than BitCoin or Ethereum, and 1,000,000x less carbon footprint. Operations on Tezos use similar amounts of energy as sending a handful of tweets, or streaming a video on your phone for 30 seconds. Tezos is as environmentally friendly as normal computer or electronics use.

A chart showing the relative amount of power Bitcoin, Ethereum, and Tezos use continuously. According to energy.gov, a typical nuclear power plant outputs 1 GW of electricity.

The reason for this amazing savings in energy is that Tezos uses Proof-of-Stake (PoS) to secure itself, which is more or less a lottery system; it doesn’t need the huge amounts of power to run complex algorithms on graphics cards that BitCoin and Ethereum use to secure their networks with Proof-of-Work (PoW). Not only does PoS reduce the amount of energy required to secure blockchains, it also does not require large numbers of graphics cards. This is good news for gamers who have seen high costs for these cards over the last 5 years as they’ve had to compete with miners using them for PoW. This is also great news for the environment, as it reduces the need to mine rare metals for microprocessors.

Blockchain Use Can Protect and Reward Artists

During the gold rush of NFTs in late 2020 and all of 2021, there was a lot of art piracy. Many artists on Instagram, Twitter, and DeviantArt had their works stolen by others, and sold as NFTs. Looking back, nobody is happy about this. Stolen works aren’t popular or valuable in NFT collector circles, so the people who bought them mostly lost the money they spent. Artists who weren’t paid for their work were justifiably angry. Transactions were mostly anonymous, so the thieves got away with it. So, what can be done about all of this?

The blue box around Verses is how OBJKT.com signals to users of the marketplace that the item is part of a verified project. It’s a similar concept to the blue checkmark on Twitter.

My company authenticates the source of our art with the original artist, and shares our revenues generously with them. When we released our first art drop, “The Initiative”, some people questioned whether it was really from Stephan Martiniere. Since we had spoken to him in person several times, when we reached out to him about this his official social media accounts were able to quickly verify that the work was from him. Unlike a lot of NFT projects where all the developers are anonymous, my company is “doxxed” and incorporated in the United States; we fully comply with all international intellectual property laws. With our first sales under our belt, buyers know this, and feel confident that their purchases are coming from a reputable source.

When it comes to sharing money with artists, Verses shares generously. For releases that are just the artist’s art, where we haven’t added any of our own creative work, the artist receives 50% of the sales. This is the common rate an artist would get at a physical gallery. Beyond that, for all the game pieces we make that use the art, we also cut artists in for 10%. Wizards of the Coast originally gave a 5% profit share to their artists, but discontinued it after Magic: the Gathering became a hit and they’d paid out a few artists seven-figure royalty checks. We intentionally doubled the rate Wizards once used, because our goal as a business is that if Verses succeeds, everyone who is part of the project should succeed with us. Not every NFT project has a philosophy like ours, but many do!

When we sold out of Stephan Martiniere’s work, we generated over $10,000 in revenue for him, and we expect our game will generate similar or larger royalties for him on top of that. And this is all for just one piece of art!

Gamers and Collectors Benefit from Utility in NFTs

When people see NFTs as a Ponzi scheme, they often are seeing projects where there are procedurally generated pictures, the creators hype up the sale of those pictures, speculators buy them up, and then whoever buys in last is left holding the hot potato while everyone else skitters off with the money. This is the greater fool business model. It sucks to watch, and if you’re left holding the bag, it sucks even more.

So, what are NFTs (or blockchains) good for besides enabling these pump and dump schemes? With Verses, we use the blockchain to recreate the paper collectible experience, and to add history to our digital trading cards in a way that goes beyond what has ever been possible in paper. We believe that these functionalities create value.

NFTs offer a digital analogue to physical trading cards. When it comes to a digital trading card, like the ones in Verses, the user controls the part of the database (the blockchain) they are stored on, and can trade or sell them with whomever they want to, whenever they want to. This enables lots of ways for players to make money with their hobby: reselling cards they are done with, trading with each other to get better value or utility, investing in rare cards and selling them when they appreciate. All of the collecting functionality of paper TCGs can exist digitally because of blockchain.

But blockchain does something even physical collectibles can’t: it tracks the history of objects. Why does that matter? Well, let me ask you, what’s the difference between a $20 baseball and a $3 million dollar baseball?

An official MLB baseball costs about $20 USD.
The famous baseball Mark McGuire set a home run record with sold for $3 million!

The answer is its history. When Mark McGuire set the home run record at 70 in a single season, the ball he did it with became very valuable to someone who cared to be connected to that event. Right now there’s no way to be tied to similar esports events like League of Legends, Starcraft, or Hearthstone championships, records, or players; but if these games had objects on blockchain, there could be! Keeping track of the history of objects increases their value. Verses uses blockchain so that digital TCG cards have verifiable histories.

History is cool not just for monetary reasons, but for fun reasons. It’s fun to be able to see a record of all the tournaments a card was played in, or its win percentage. It’s fun to be able to see who you traded with to get a card, and where they got that card from. Game pieces aren’t just functional things, but objects that we form memories with. When I look at my personal Magic: the Gathering card collection, many, many cards make me remember a time and place, or a friend, or a personal experience I had with it. Just like a photograph. We believe the blockchain can help evoke sentiment and beauty.

The Next Generation of NFTs Have a Bright Future

Even though the past has seen extremely suspect and problematic uses of NFTs, the technology is new and rapidly being improved on. We believe the very things it is criticized for can be its greatest strengths: protecting intellectual property, getting revenue into the hands of artists, collectors being able to trade and profit from digital collectibles, and tracking the unique history of each card. Environmental issues are serious, and we think next generation blockchains like Tezos pass the test. This is all just the tip of the iceberg about what’s great about blockchains and NFTs for artists, collectors, and digital gamers. We are making Verses to deliver a fun game to the world, in ways that will enrich our community and collaborators. We hope to show the world that NFTs can be used for fun and for good.

If you have any questions, hit me up in the comments.

I give monthly reports on my company’s progress on Medium. If you’re interested, please follow!
You can follow my company on Twitter @playverses and me @tolariawest
Verses TCG’s website is verses.gg and our Discord is discord.gg/verses.

Until next time,

Alex West
President, Many Hands SPC
Co-Creator, Verses TCG

2/5/2022

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