Similar studies into the carbon footprint of Ethereum produce similar results. Digiconomist estimates a single Ethereum transaction’s carbon footprint at 33.4kg CO2 and each time an NFT is minted or sold, that’s another transaction. These estimates point to a single NFT transaction is likely to have a carbon footprint more than 14 times that of mailing an art print.

Both Bitcoin and Etheruem use proof-of-work (PoW) mining, which is associated with significant carbon output. In the Ethereum ecosystem, this is being addressed by layer-two solutions such a Polygon and the forthcoming move to proof-of-stake (PoS) with Eth2, but for now, the NFT marketplaces are still plagued by high gas fees.

In May, The Financial Times called Bitcoin a “dirty currency.”

“The Bitcoin ecosystem itself accounts for the same amount of energy consumed by the Netherlands,” says Nuttall. “Which is a lot until you consider that it’s only half the energy consumed by TVs left on standby overnight in the U.S. Perspective.”

Nuttall has a more unique perspective when it comes to explaining the link between cryptocurrency and energy.

“I see it as an alternative way of storing energy consumption. Consider an electricity company operating a hydroelectric dam. When they empty the water, they produce electricity which they sell back to themselves off peak at a low rate to refill the dam but sell onto the grid at a premium rate.

This is why it is good to seek out educators who can balance the rhetoric, to counter the inbuilt prejudice or sheer misinformation bandied about like gospel.

Once you weigh up the evidence, NFTs can be seen as a force for good.

The Plane truth

Gary Nuttall, an emerging technology consultant with Distyltics, and a recent finalist in the prestigious U.K. CryptoAM Education Awards, is in demand to explain all things crypto. When I spoke with him, he had just hopped off a webinar with bankers. He wears a shirt (to impress the bankers) and a hoodie (to prove his tech credentials), but finds himself answering the same questions again and again.

So, in crypto, one step forward is the introduction of nonfungible tokens, or NFTs. Finally, something that everyone — including your non-tech or finance friends — can get their teeth into and understand.

I listened to a radio program yesterday where during the weekly film roundup a reviewer spoke about Quentin Tarantino producing NFTs of unused pages of his Pulp Fiction script. Sure, he is being sued by Miramax, but the reviewer positively salivated over the term NFT.

“I’m not tech or finance,” she said. ‘But I like talking about NFTs and Tarantino.”

So NFTs are mainstream. Noobs still get hung up on the Beeple sale ($69 million at Christie’s in March) much in the same way the OGs regard the eye-watering 2017 Tezos ICO that raised $232 million or BlockOne’s epic twelve-month raise of $4 billion the following year. These are the milestones when the money gets silly and crypto gets onto the mainstream news feeds.

But, the backlash has already begun. The amount of energy “wasted” in generating NFTs is a very serious issue currently doing the rounds. If using energy to produce cryptocurrency is seen as wasteful, then expending large amounts of energy to create NFTs of low-resolution cartoon JPGs sounds positively frivolous. A sort of let them eat cake moment in crypto history.

This is why it is good to seek out educators who can balance the rhetoric, to counter the inbuilt prejudice or sheer misinformation bandied about like gospel.

We do that when we capture all of this fee income. The protocol goes out on-market, and Minterest buys back its own tokens, and it distributes that token through to its users. Now, it’s not for me to say, and a big disclaimer is that I’m not trying to provide forecasts. But if you do headline numbers, if the protocols generate $100 million of fee income, which we should probably do when the borrowing is between $3 billion to $7 billion, that means the protocol is spending $8 million a month on its token. The protocol emits 820,000 tokens per month as part of its liquidity mod. So, if you’re spending $8 million a month and the token price is $10, then the protocol can supply all the tokens that it emits back, which is unrealistic. If the protocol is $8 million a month, then what is the token price? The answer is it’s more than $10. Now, at $40 a token, it’s buying back 50% of token emissions. At $80, it’s buying back 10%, which probably sounds more realistic.

The answer to the question is somewhere in there, or maybe more. The intention here is, and the reason that is important for the protocol generally is that it can compete with others in terms of APY. The more the token prices increase, the greater the internal APY that is actually being caused for the borrowers and lenders. That means it can attract more liquidity, outcompete and gain more longevity and relevance.

CT: Why choose Moonbeam, in particular, to launch your protocol?

JR: Well, there are a couple of key things. One, there’s the question of why Polkadot first, and why Polkadot is much more than another Solana or Algorand. There are some very powerful things about Polkadot that we really like. Initially, Minterest was built on Substrate — it was built to have its own parachain. But what it really came down to was actually time.

We're proud to be the only @MoonbeamNetwork-native protocol on that list, as well as the only lending/borrowing protocol. #DeFiTwoPointOh let's go!

Thank you ducky for your impressive work in collating and keeping up with these statistics! https://t.co/twn0xAyoDo

— Minterest (@Minterest) November 17, 2021

Cointelegraph: Your firm claims to be the world’s first lending protocol that captures 100% of value from interest, flash loan and liquidation fees, which then get passed on to users. Would you care to elaborate on that?

Josh Rogers: Traditionally, what happens is that when you look at models, when you look at value capture, what you notice is that there are different parties who are beneficiaries. So, you are looking at lending protocols where the owners/developers take profits out. You have external liquidators who act as the third party who extract liquidation fees. And the thing to especially know about is flash loan fees, which may be extremely [inaduible] to the community in some way. But the thing to know about is that, that value capture fee-income protocol, goes to all these different parties. The intention with Minterest is that we capture all of that fee income on-chain, on the protocol, then we distribute it around the community of users in a way in which we believe is much bigger and much more inclusive. One of the things that stand out in bringing out an auto-liquidation process is that the protocol fee income it captures is far more significant than anything else out there because that fee income is normally lost from the protocol.