Why NFT is Bad for Environment?

Next to the buzz of the increasing popularity of NFTs, you must have heard that NFTs are harming the environment. In this article, we will explore the environmental impact of NFTs and potential solutions to mitigate their environmental effects. After reading this article, your question will be answered: is NFT bad for the environment?

Environmental impact of NFTs

NFTs are rapidly gaining popularity as a means of buying, selling, and collecting digital art and other unique digital assets. However, despite their potential benefits, NFTs have significant environmental drawbacks that must be addressed.

The energy consumption, the carbon footprint of NFT creation and transactions, and the environmental impact of the blockchain technology used to create and maintain them are all areas of concern for environmental organizations and others.

The energy consumption of NFT creation and transactions

The creation and transaction of NFTs require significant energy due to the computational power needed to maintain the blockchain network on which they are based. Each time an NFT is created or traded, it requires a complex cryptographic algorithm to be solved by the network of computers that support the blockchain. This process, known as mining, requires much energy to power the computers that perform the calculations.

According to recent studies, the energy consumption of NFTs is significantly higher than that of traditional digital assets, such as streaming music or movies. For instance, creating a single NFT on the Ethereum blockchain can require the same amount of energy an average US household uses in a week. Furthermore, each transaction of an NFT also contributes to the overall energy consumption of the network.

The high energy consumption of NFTs has raised concerns about their environmental impact, as most of the world’s electricity production still comes from non-renewable sources, such as coal and natural gas, which generate significant carbon emissions. In light of this, creators and users of NFTs must take steps to mitigate their energy consumption and reduce their carbon footprint.

The carbon footprint of NFTs compared to other digital assets

The carbon footprint of NFTs is significantly higher than that of many other digital assets, including streaming music or movies. This is due to the energy-intensive process of creating and maintaining the blockchain network on which NFTs are based.

According to recent studies, the carbon footprint of a single NFT transaction can be as high as 211 kg of CO2 emissions, which is equivalent to driving a car for 1,000 kilometers. This is compared to the estimated carbon footprint of streaming music or movies, which is around 0.01 kg of CO2 per stream.

Furthermore, the environmental impact of NFTs is exacerbated by their popularity and the increasing number of transactions being made. In just the first three months of 2021, the total number of NFT sales exceeded $2 billion, which is more than the entire market for NFTs in the previous year.

This trend is expected to continue, leading to a further increase in energy consumption and carbon emissions.

In light of this, it is crucial that creators and users of NFTs take steps to mitigate their carbon footprint and reduce their environmental impact. This includes exploring alternative blockchain technologies with lower energy consumption, promoting sustainable NFT creation and trading practices, and offsetting carbon emissions through investments in renewable energy and other carbon offset projects.

The environmental impact of the blockchain

The blockchain technology used to create and maintain NFTs has a significant environmental impact, in addition to the energy consumption and carbon footprint of NFT creation and transactions.

Blockchain technology uses a distributed network of computers to maintain a decentralized ledger of transactions. This network is supported by a complex cryptographic algorithm that requires a large amount of computational power to solve. This process, known as mining, involves solving complex mathematical problems to validate transactions and create new blocks in the blockchain.

Moreover, mining for blockchain technology requires specialized hardware that quickly becomes obsolete, contributing to electronic waste. Electronic waste disposal can have significant environmental and health impacts, including releasing toxic chemicals into the environment.

In response to these concerns, some blockchain networks are exploring alternative consensus mechanisms with lower energy consumption, such as Proof of Stake (PoS), which does not require the same level of computational power as mining.

Additionally, efforts are being made to promote sustainable practices in creating and using blockchain technology, including using renewable energy sources for mining and proper disposal of electronic waste.

Ethereum mechanism, Merge update

NFTs themselves do not directly affect the environment. Instead, it is the production method of NFT that harms the environment. Today, many tokens are based on the Ethereum blockchain and, as a result, have the ERC-721 or, more specifically, ERC-1155 standard. Every blockchain has its own NFT token standards.

Until September 15, 2022, the Ethereum network operated on a Proof-of-Work (PoW) algorithm. This method requires a lot of energy to validate transactions. But how is this energy consumed?

In the first step, an NFT is listed in one of the NFT marketplaces, such as OpenSea.

Second step: Buying NFT. Digital currency miners must record and solve extensive and complex calculations so that mining is done and the purchase of NFT is recorded in one of the blockchain blocks. This whole process requires energy.

The third step is NFT storage and transfer. Storing an NFT in the wallet does not consume energy, but transferring it to other markets or another person means using the PoW algorithm, equally to consuming energy to transfer NFT to another wallet.

In all these steps, some miners confirm transactions by consuming electricity. Miners, a set of circuits, were designed for computing operations. These circuits are installed on special boards and are used as special devices with high computing power to solve complex mathematical problems. These calculations consume a lot of electricity.

The Ethereum blockchain made this change in its system in September 2022 with the name Merge Upgrade and changed its work algorithm from PoW to PoS. After this change, each transaction consumes as much electricity as watching TV for 20 minutes.

But don’t worry! There are also methods to produce NFT that do not harm the environment, which we will explain further. Before that, you should know that the electricity used to create an NFT with the PoW algorithm equals the electricity consumption of 9 days of a family in America and one month of personal electricity consumption in Europe.

Also, as we said before, some methods make the production of NFT not harm the environment or minimize the damage to the environment. Not all blockchains work with the PoW algorithm. The Proof-of-Stake (PoS) algorithm requires high-end computers to handle the calculations. But to share cryptocurrencies, confirm NFT, and confirm digital transactions, you can use the PoS algorithm.

Criticism of NFTs’ environmental impact

Despite their popularity and potential benefits, NFTs have been subject to significant criticism due to their environmental impact. NFTs rely on blockchain technology for their creation and maintenance, which has been criticized for its high energy consumption and carbon emissions. The growing number of NFT transactions and the associated energy usage have raised concerns about the sustainability of this technology. As a result, there has been a call for increased awareness and action to mitigate the environmental impact of NFTs.

Environmental organizations’ concerns about the rise of NFTs

Environmental organizations have expressed concerns about the rise of NFTs due to their significant environmental impact. The energy consumption and carbon footprint associated with the creation and transaction of NFTs have been identified as key areas of concern for environmental organizations.

Many of these organizations are raising awareness about the environmental impact of NFTs and advocating for the development of more sustainable practices in the blockchain industry. They have called on blockchain developers and NFT creators to consider the environmental impact of their activities and explore alternative approaches that minimize their carbon footprint.

Moreover, some environmental organizations are exploring the potential of blockchain technology for sustainable initiatives, such as carbon offsetting, renewable energy trading, and supply chain transparency. They argue that the blockchain’s decentralized and secure nature can enable more sustainable practices while also ensuring transparency and accountability.

Overall, environmental organizations are urging the blockchain industry and NFT creators to take responsibility for their environmental impact and to work towards more sustainable practices. By doing so, they can help ensure the long-term viability of NFTs while minimizing their environmental impact.

The pushback from the art world and other NFT users

Despite the criticism of NFTs and their environmental impact, there has been pushback from the art world and other NFT users. Many artists, collectors, and investors see NFTs as a valuable and innovative way to create, collect, and trade digital art and other unique digital assets.

Some NFT supporters argue that the energy consumption and carbon emissions associated with NFTs are comparable to those of other digital assets, such as streaming services and social media platforms. They also point out that the blockchain technology used for NFTs can promote transparency, security, and ownership rights, which are particularly important for digital assets that are easy to copy and distribute.

Additionally, some NFT users are exploring ways to minimize the environmental impact of their activities, such as using renewable energy sources for mining and purchasing carbon offsets to compensate for their carbon emissions.

However, the pushback from the art world and other NFT users has not diminished concerns about the environmental impact of NFTs. As the number of NFT transactions and the associated energy usage continue to grow, there is a need for increased awareness and action to address the environmental impact of this technology.

The need for a balanced approach to the use of NFTs

As the use of NFTs continues to grow, there is a need for a balanced approach to their use that considers both their potential benefits and their environmental impact. While NFTs offer a valuable and innovative way to create, collect, and trade digital art and other unique digital assets, their energy consumption and carbon emissions cannot be ignored.

A balanced approach to using NFTs involves recognizing this technology’s environmental impact and taking steps to minimize it. This can include using renewable energy sources for mining and transactions, purchasing carbon offsets to compensate for carbon emissions, and exploring alternative blockchain technologies that are more energy-efficient.

At the same time, a balanced approach to using NFTs also involves recognizing the potential benefits of this technology and finding ways to maximize them while minimizing their environmental impact. This can include exploring the potential of blockchain technology for sustainable initiatives, such as carbon offsetting, renewable energy trading, and supply chain transparency.

Ultimately, a balanced approach to using NFTs requires a willingness to engage in an ongoing dialogue about the environmental impact of this technology and to work towards sustainable solutions that meet the needs of both users and the environment. By doing so, we can ensure that the benefits of NFTs are realized while minimizing their impact on the planet.

The potential solutions to mitigate NFTs’ environmental impact

The recent surge in the popularity of NFTs has brought attention to the environmental impact of this technology. The high energy consumption and carbon emissions associated with NFTs have led to concerns about their sustainability. To address this issue, various potential solutions have been proposed to mitigate the environmental impact of NFTs.

These solutions range from using renewable energy sources for mining and transactions to exploring alternative blockchain technologies that are more energy-efficient. This part of the article will explore some of the potential solutions that can help reduce the carbon footprint of NFTs and promote more sustainable practices in the blockchain industry.

Ways to reduce NFTs’ energy consumption

There are several ways to reduce the energy consumption of NFTs and make them more sustainable. One approach is to use renewable energy sources such as solar, wind, or hydropower to power the blockchain network used for NFT transactions. This can significantly reduce the carbon footprint of NFTs and make them more environmentally friendly.

Another approach is optimizing the blockchain algorithms used for NFT transactions to reduce energy consumption. This can be done through various methods, such as proof-of-stake (PoS) consensus mechanisms, which require less energy than traditional proof-of-work (PoW) mechanisms. PoS also reduces the need for high-powered hardware and reduces the incentive for large-scale mining operations.

Additionally, implementing transaction batching and compression can reduce the number of transactions processed and the energy required for each transaction. This can reduce the overall energy consumption of the blockchain network used for NFT transactions.

Finally, exploring alternative blockchain technologies, such as directed acyclic graphs (DAGs), that are designed to be more energy efficient than traditional blockchain networks can help reduce the energy consumption of NFTs.

Overall, reducing the energy consumption of NFTs is crucial to making them more sustainable and environmentally friendly. By implementing these various solutions, the blockchain industry can work towards more sustainable practices and reduce its impact on the environment.

Using alternative blockchains

Alternative blockchain technologies have emerged as potential solutions to reduce the environmental impact of NFTs. One of these technologies is directed acyclic graphs (DAGs), which operate differently from traditional blockchain networks and require less energy to process transactions.

In a DAG-based network, each transaction is validated by a small group of nodes instead of the entire network. This reduces the energy required for validation, making it more energy-efficient than traditional blockchain networks. DAG-based networks also allow for more transactions per second than conventional blockchain networks, which can make them more scalable.

Another potential alternative technology is the use of sidechains or layer-2 solutions. These are separate blockchains connected to the main blockchain network and can process transactions more efficiently. This reduces the load on the main blockchain network, which can reduce its energy consumption.

Furthermore, some new blockchain networks are being developed specifically to address the energy consumption and scalability issues of traditional blockchain networks. These networks use alternative consensus mechanisms, such as proof-of-stake (PoS) or proof-of-authority (PoA), that require less energy than the proof-of-work (PoW) mechanism.

While these alternative blockchain technologies are still in their early stages and may have their challenges, they have the potential to significantly reduce the environmental impact of NFTs and other blockchain-based applications. As the blockchain industry continues to grow and evolve, exploring and developing more sustainable solutions to mitigate its effects on the environment is crucial.

Eco-friendly Blockchains

Blockchains like Polygon, Solana, Flow, and Tezos use the PoS algorithm. This method does not require any giant miner. Because it keeps mining equipment and receives and confirms transactions using powerful nodes.

So far, the Polygon network has set aside 20 million dollars to compensate for the damage caused to the environment. It has also published a green statement mentioning the issue of “Carbon Negative”. Every NFT in the Polygon network will not negatively affect the environment.

This network has recently published news that the analysis shows that 99% of the carbon emission in the Polygon network in the past was due to the connection of this network with the Ethereum main network. In this regard, it has invested 450 million dollars in finding solutions for scaling the network to reduce the environmental damage to zero.

For example, the Bored Hamster NFT project is based on the Polygon blockchain. One of the reasons this project was designed and produced based on the Polygon blockchain is the concern about environmental damage to neutralize the issue of climate change, which is the biggest threat to Web 3.0, according to the Polygon network. Therefore, you can invest in this project without worrying about harming the environment.

The role of NFT creators and buyers

NFT creators and buyers play a crucial role in promoting sustainable practices in the use and creation of NFTs. By taking an active role in reducing the environmental impact of NFTs, creators, and buyers can contribute to the overall sustainability of the blockchain industry.

Creators can take several steps to reduce the environmental impact of their NFTs. They can start by considering the energy consumption of the blockchain network used to create and sell their NFTs. By using more energy-efficient networks or opting for greener energy sources, creators can reduce the carbon footprint of their NFTs.

Creators can also promote sustainable practices by using eco-friendly materials and reducing waste in the production of their artwork. This can include using recycled or sustainable materials in their art and reducing the use of non-biodegradable materials.

Buyers can also play a role in promoting sustainability by choosing NFTs that are created using sustainable practices. This can include supporting creators who use eco-friendly materials or networks and choosing NFTs that support environmental causes or initiatives.

Additionally, buyers can offset the environmental impact of their NFTs by participating in carbon offset programs or making donations to environmental organizations.

Overall, the role of NFT creators and buyers in promoting sustainable practices is crucial to the long-term sustainability of the blockchain industry. By prioritizing sustainability in creating and purchasing NFTs, creators, and buyers can contribute to a more environmentally friendly and sustainable future.

Conclusion

After mentioning all these, it is important to note that the impact of NFTs on the environment is still a relatively new issue, and more research and innovation is needed to fully understand and address it. The future of NFTs and their environmental impact will depend on the continued efforts of the blockchain industry and its stakeholders to prioritize sustainability and reduce their carbon footprint.

Recap of the environmental impact of NFTs

NFTs have been criticized for their significant environmental impact, particularly due to the high energy consumption required for their creation and transaction on the blockchain network. The carbon footprint of NFTs has been compared to that of other digital assets, and environmental organizations have expressed concerns about their growing popularity.

The art world and other NFT users have also faced pushback for their contribution to the environmental impact of NFTs.

However, there are potential solutions to mitigate the environmental impact of NFTs. These include reducing energy consumption through more energy-efficient networks or greener energy sources, exploring alternative blockchain technologies with lower environmental impact, and promoting sustainable practices among NFT creators and buyers.

By taking these steps, the blockchain industry can prioritize sustainability and contribute to a more environmentally friendly future.

Final words

As we’ve discussed, the environmental impact of NFTs is a growing concern, and creators and users of NFTs need to take responsibility for their actions. Whether you are a digital artist, collector, or investor, it’s time to consider the impact of your involvement in the NFT market.

We urge you to educate yourself on the environmental impact of NFTs and explore ways to reduce your carbon footprint, such as using more energy-efficient networks or supporting renewable energy sources. Additionally, consider supporting NFT platforms and marketplaces that prioritize sustainability and promote sustainable practices among their users.

By taking these steps, we can collectively work towards a more sustainable future for the blockchain industry and ensure that our actions do not come at the cost of our planet’s well-being. It’s time for all of us to take action and make a positive impact on the world. Hoping for an evergreen world 🌱