Ever since the inception of crypto in 2009, there has been constant criticism surrounding the creation and transfer of those assets. Many environmental analysts have complained that Bitcoin and crypto assets have a massive carbon footprint, leading to climate problems and environmental degradation.
There have been calls to ban crypto-related processes like mining due to the carbon footprint. One of the crypto branches facing vast criticism is NFTs. There have been discussions surrounding NFTs with climate and environmental experts noting that the assets are bad for the environment. Is the criticism justified? This guide looks at the impact of NFTs on the environment, mainly focusing on Ethereum’s PoW and PoS chains.
Criticism is Because of The Massive Energy Usage of Ethereum
Undoubtedly, the creation and even transfer of NFTs consume large amounts of energy. The massive energy usage is what fuels the criticism against NFTs.
The minting process is the biggest reason causing the controversy over the environmental impact of NFTs. However, it’s difficult to determine the amount of energy used to create a simple NFT. Why?
- The energy used in the minting process will always change depending on the blockchain, be it Ethereum, Tezos, or Solana.
- The power also varies depending on the type of NFT created, as there are many types.
- The energy used in the initial coding and designing phases is too random to get exact data.
The most common blockchain hosting NFTs is Ethereum. Initially, the original Ethereum chain was a high consumer of energy. Generally, it used a mining system to validate transactions and release new coins into circulation.
Mining uses a consensus system called proof of work which involves solving a cryptographic algorithm by making millions, billions, or even trillions of guesses depending on the hash rate. Now, making trillions of guesses requires heavy power consumption of power.
Remember, the creation and transfer of NFTs involve token transactions and burning. The processes involved in those token transactions and burning also require massive mining, with many huge computers consuming too much power.
However, getting the exact amount of energy used is complex. There are few estimations. Memo Akten, for instance, estimates that minting an NFT on Ethereum Consumes over 142 kWh of power. Others estimate that making an NFT consumes not less than 340 kWh.
The problem with most mining is that it’s centered around regions like the US. Now, in the US, most of the power is generally dirty. As such, the process of minting leaves a massive carbon footprint. It’s for that reason that many consider NFTs bad for the environment.
A good example illustrating NFT energy usage is Joanie Lemercier, a french digital artist. Reports indicate that Lemercier canceled the creation of his NFT after realizing the amount of energy needed for the NFT sale. The process would take 10 seconds and consume enough electricity to power the artist’s full studio for two years.
Massive Energy Usage Leads to High Carbon Footprint
To some extent, Yes. The power consumption from NFTs is just massive hence increasing the carbon footprint. A recent report via eco-experts indicates that, on average, an NFT could generate 211 kg of CO2. This is a massive carbon usage, especially considering that the average carbon emission of print artwork is 2.3kg.
The report was titled, ‘NFTs are 92 times worse for the climate than regular art.’ In the first quarter of 2022, over 27 million NFTs were traded across different platforms. Therefore, on average, in that quarter, 9 million NFTs were traded every month. Multiplying nine million by the carbon footprint of an NFT means that every month, NFT sales release about 1.8 million tonnes of CO2.
The research by eco-experts compared the carbon footprint of NFT to that of a car. The carbon emission for NFT creation was five times more than driving a car for 100 miles. Again, this carbon footprint arises from the energy needed to power NFT-related processes.
The Judgment on NFT is Too Harsh
As already established, NFTs receive too much criticism because of their energy usage and carbon footprint. However, the judgment on the assets is a little bit too harsh. But why?
The criticism sent to NFT should be on blockchains, Ethereum in particular. Today, many blockchain networks are offering NFT services. While Ethereum was a problem, other blockchains like BSC, Solana, and many more would provide services with lower carbon footprints. Therefore, NFT production from such chains consumes less power.
While NFTs are under severe scrutiny, they can achieve total eco-sustainability in the future. Many NFTs are already on their way to achieving complete carbon neutrality. But how?
Blockchain Validators and Miners to Use Green Energy Source
NFTs need to leverage sound green energy sources to achieve complete carbon neutrality. Blockchain miners and even validators should turn to u clean energy sources like solar, hydro, and wind electricity. This removes traditional electric grids’ processes, reducing the carbon footprint.
NFT Focused Blockchains should Start Using PoS
Blockchains helping the creation and transfer should consider using more energy-friendly consensus algorithms. This has already happened with Ethereum. The blockchain migrated from a PoW to a PoS system. Well, this solved most of Ethereum’s energy problems. The migration to PoS reduced Ethereum’s power usage by over 99%, hence reducing the carbon footprint by 99%. Other blockchains like Solana, BSC, and Tezos also use PoS.
Another way NFTs can reduce their energy consumption and carbon footprint is by leveraging batch transactions. Some blockchains may opt to add a second layer where buyers would arrange all their transactions outside the chain and then post all of them at once. Batching helps reduce energy consumption.
Yes, There are Green NFTs
In attempts to deal with the carbon crisis, some new NFT developers have been launching their green digital assets. The green NFTs record shallow energy usage, leaving little to no-carbon effects.
Yes, most NFTs are hosted by the Ethereum blockchain. In the past, the heavy power consumption by Ethereum led to heavy criticism of NFT. However, as already mentioned, several other blockchains support NFTs and use different consensus mechanisms. Among them include;
- Binance Smart Chain
NFTs, as already established, have been quite a problem for the environment, especially when Ethereum was still using PoW. However, after the move to PoS, most of the energy-related issues in Ethereum were reduced by over 99%. Other blockchains like Solana and Tezos support eco-friendly NFT production. Therefore, while the anger on NFT was slightly justified in the past, it currently isn’t.