NFT: WWF tried to raise funds through digital art, but backtracked

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Most images online are just a right click away from being in someone’s personal collection. They are almost free. This makes it difficult for charities to raise funds from them. That is until 2017 when non-fungible tokens, or NFT, have arrived. Unlike ordinary digital media, NFTs cannot be copied so easily. And ever since they’ve been around, conservation charities have been using them to raise money.

A cartoon turtle cat named Honu raised $25,000 (£18,485) for ocean conservation charities in 2018. Rewilder is a non-profit organization using NFT auctions raise funds to buy land for reforestation. The charity claims to have raised US$241,700.

There have been various cartoon monkeys sold for US$850,000, the money being donated to charities for the conservation of orangutans. The most expensive NFT to date, a photo of a few small gray balls, sold to several buyers for $92 million in December 2021.

With many UK charities in hopeless situationit’s no surprise that some want to get in on the crypto action as well.

Recently, WWF UK joined the NFT circus with its Tokens for Nature collection. But even before fundraising begins, the the project sparked a backlash online environmentalists who worried about its carbon footprint. In just a few days, the the sale has been canceled.

The NFAs (or Non-Fungible Animals) project aimed to raise a lot of money and raise awareness for endangered animals. The number of rare animal images available for sale matched the estimated number left in the wild. There were 290 NFA giant ibises, for example. An ibis jpeg would have raised about 400 usd by a single sale.

“Green” NFTs?

According to one estimate, NFTs generate more carbon emissions than Singapore due to their energy consumption.

Most NFT creators use a technology called Ethereum, which is a blockchain system similar to Bitcoin that involves a energy-intensive computing function called mining. Specialized mining computers take turns validating transactions while guessing the combination of a long string of automatically generated numbers. The computer that correctly guesses the combination first wins a reward paid in a cryptocurrency called ether.

Unlike regular NFTs, the WWF claimed that its NFAs were “respectful of nature”. In its sustainability statement, the charity suggested that selling all of the approximately 8,000 NFAs would have a similar carbon footprint to a pint of milk, or half a dozen eggs. The reason for this negligible impact, they say, was a smart blockchain app called Polygon, which would have allowed the WWF project to reduce direct interactions with the Ethereum blockchain. WWF would then not need to take as much responsibility for its share of Ethereum monstrous carbon footprint.

Crypto mining consumes large amounts of energy. PictureArtie Medvedev/Shutterstock

So why the tantrums on Twitter?

The WWF hypothesis was tricky. This is because Polygon depends on Ethereum contracts for perform essential services, such as moving assets between Ethereum and Polygon and creating checkpoints between the two. According to Alex de Vries of the cryptocurrency monitoring website Digiconomist, the footprint of the WWF project was actually around 2,100 times more (12,600 eggs) than the estimate provided by the charity.

There are also second-order effects to consider. Ethereum’s carbon emissions are not directly related to the number of transactions made on the network. PoW mining is what gives Ethereum his dirty reputation. By pumping up the hype around NFT markets, the collection could raise the price of Etherum. This would further encourage PoW mining, thereby increasing the overall carbon footprint of the network.

NFA’s first buyers would buy them from the WWF dedicated website. But buyers can re-register their works on the famous NFT marketplace, OpenSea. OpenSea is currently the biggest consumer of gasoline on the Ethereum network, responsible for almost 20% of the actions on the blockchain.

Blockchain backlash

The WWF isn’t the first charity to reevaluate its stance on crypto donations. In 2021, Greenpeace stopped accepting bitcoin donations after seven years. Friends of the Earth soon followed. The WWF fury has forced the wildlife charity, International animal rescue to park its NFT fundraising plans indefinitely. non-profit internet Mozilla and Wikipedia have also reconsidered their crypto-donation strategies for climate change reasons.

There are many NFT-enabled blockchains that don’t cause carbon headaches. Nevertheless, Studies show it’s hard for charities to fundraise using NFTs without getting their hands dirty.

Charities should be aware of growing public disapproval of blockchain projects. Some argue technology is driven by predatory marketing tactics. Others claim blockchain is a platform for ponzi schemesscam and multi-level marketing arrangements. According to OpenSea80% of NFTs issued through its site are spam, scam or otherwise fraudulent.

Research also shows cryptocurrencies can restrict the work of conservation charities. In 2018, WWF partnered with blockchain developers, Help Channel. To improve the transparency of the donor tracking process, AidChain encouraged WWF to pay its service providers in a cryptocurrency called AidCoin. Using an Ethereum smart contract, donors could then track and manage how the funds were spent.

Platforms like this can allow non-crypto expert donors to encode concrete conditions to their donations. Break the conditions – lose the funds. Ideal for the giver. Lousy for the charity’s conservation experts.

Before reacting to the crypto data hype, conservation charities like the WWF need to do their homework. Animal jpegs and cryptocurrencies may seem like a harmless way to raise funds. But mindlessly jumping on the blockchain bandwagon could tie their hands as longtime donors provide support elsewhere.

Peter Howson is Senior Lecturer in International Development, Northumbria University, Newcastle.

This article is republished from The conversation under Creative Commons license. Read it original article.

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