NFTs as dephysicalized merch

NFTs will change the way we approach merchandising and ticketing!
Jan 13, 20223 min read

Dear Bankless Nation,

“NFTs are the #1 environment killer right now.” I saw someone write this sentence this week. Sigh.

The sentiment’s wrong for, well, a baffling number of reasons. And really I think at some level these kinds of hyper-extreme assertions are misguiding peoples’ attention away from industries that are actually destroying the planet in runaway fashion.

You know … the industries that have little to no prospects of wiping out their energy consumption levels any time soon, in stark contrast to the entire NFT ecosystem which has proof-of-stake as its metaphorical handful of aces in this case.

Let’s dive a little deeper here, then, and talk about NFTs as dephysicalized merch. While digital merch will never replace physical merch totally, PoS-based NFTs can lead to considerable greenhouse gas emissions drops if they replace even 15% of global merch and ticketing activity over the next 5 years. Let’s explore 👇


We like the digital merch (and honestly that’s a good thing)

Merchandise is big business in the world today.

Global apparel sales are in the trillions of dollars, and global licensed merch sales are in the hundreds of billions. Another forecast I’ve seen suggests global event ticket revenues will reach over $72B this year. That’s a lot of activity!

Indeed, consider the incredible physicality of it all. The masses of raw materials harvested, the many manufacturing processes spread around the world, the seemingly endless web of international exports and imports, the seas of paper and plastic trash that result!

We’re literally running out of places to dump trash!

Here, enter NFTs on green PoS-based chains and L2s. Think of Polygon, Arbitrum, Optimism, and the other Ethereum scaling solutions live today. Also think of the droves of L2s that are yet to come, too, and soon the Ethereum L1 itself with its impending total shift to PoS.

Regarding that shift, a recent estimate suggests it will crater Ethereum’s energy consumption to around what ~1k Australians use annually and thus make it so that essentially all NFT activity will become “green” and requiring very little electricity.

Think about that … Ethereum isn’t here to replace any one company, e.g. Visa. It’s here because it’s the first global open infrastructure for DIY programmable culture and finance in all directions, and with L2s maturing it’ll soon be ready to support the daily life activities of billions of humans, all only for the energy costs of roughly ~1k people!

“Hold up, let me check my Argent wallet real quick …”

This will be an absolutely astounding level of efficiency. Then factor in how a growing number of people will explore NFT use cases around digital merch and ticketing in the years ahead. So as the Ethereum + L2 stack advances, it seems likely that brands will increasingly focus their efforts on the digital side of merchandising and events via NFTs.

If this refocusing results in companies diverting even, say, 10% from their physical merch activities to PoS-based NFTs in the coming years, then that could take a non-trivial chunk out of greenhouse gas emissions in kind. It’d cut down on exports and imports, on paper and plastic waste, and so forth etc. This is very compelling!

As such, the dephysicalization prospects of NFTs are something that should be taken more seriously by more people and I assume will be over time. It’ll never happen that NFTs replace all their physical analogues, nor should they in various cases. Yet at the same time if more and more of the world embraces NFTs as viable dephysicalized alternatives to traditional merch, this absolutely could help lower international energy consumption levels. Who would have thought!

And this is all nothing to say of the regenerative finance opportunities that are possible here going forward, e.g. automatically splitting NFT royalties with green causes or using DeFi and DAOS to automate carbon offsets and beyond. We’re gonna make a difference, ladies and gents, just you wait and see.

Action steps

  • Do you think NFTs have a chance to gain mainstream traction as digital merch? Sound off in the comments below, let me know what you think!
  • Check out my previous piece The ideal NFT marketplace if you missed it.

Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.

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