Algorand & NFTs: The Ideal Union
NFTs have been on the rise, with over $41 billion worth of crypto being spent in NFT marketplaces in 2021. The trend is only increasing as the industry continues to gain traction and grow. And though Ethereum dominates the NFT space, there are drawbacks to operating within the network. Many marketplaces are oversaturated, have high transaction fees, the potential for forking, and more, providing a sub-optimal experience for artists and users alike. On top of this, the minting process can have a substantial impact on the environment with a single Ethereum transaction consuming the same amount of energy as an average U.S. household spends in approximately nine days and the carbon footprint of a single Ethereum transaction equals watching YouTube for 20,603 hours, according to a study conducted by DigiConomist.
However, not all blockchains are created equally and there are many prevailing that counter the aforementioned drawbacks with Algorand being one of the leaders. The network is uniquely positioned with a number of features that make it appealing for creators and users to venture away from Ethereum.
Costs. Minting, buying, selling, and exchanging NFTs on Algorand are nominal in comparison to other blockchains. There is no concept of gas fees on Algorand, with the minimum fee for a transaction being a fraction of an Algo. Ethereum gas prices continue to be extremely high, ranging between $30-$300 over the past year.
No forks. Algorand’s blockchain is forkless, which is a huge incentive for NFT users. When a blockchain can fork, there is the potential for a token to be duplicated, leaving one version of the token on the main chain and another on a separate chain, thus duplicating the NFT. Algorand’s no forking prevents NFTs from being compromised, giving artists and collectors confidence that their NFT is truly unique.
Speed. Algorand is one of the fastest blockchains on the market, able to perform transactions at a rate of up to 1,000 transactions per second, compared to Ethereum’s 15 transactions per second. Additionally, all transactions are conducted with instant finality, which can make a big difference when issuing or trading large amounts of NFTs.
Fractional Ownership. This feature democratises ownership by offering shared ownership opportunities to assets with high price tags, making costly NFTs accessible to all.
Sustainability. One of the main reasons CC Token chose Algorand as its blockchain of choice is also a driving factor for many NFT users. As discussed in this blog post (hyperlink to Algorand post), Aglorand runs on an environmentally friendly pure proof of stake, PPoS, consensus mechanism and is carbon negative. This is a stark contrast to other blockchain marketplaces, making Algorand one of the few marketplaces that doesn’t have a negative effect on the environment.
Ultimately, Algorand’s key features set it apart from other players in the NFT ecosystem, making it a clear contender to be a leader for the most impactful NFT applications in the future.