The main reason NFTs and climate change are linked is because of the current shortcomings of blockchain technology. Solutions seem far away.
Non Fungible Tokens or NFTsCryptocurrencies are everywhere. Everyone wants to be part of the new trend, from top tennis players like Serena Williams or Academy Award winner Reese Witherspoon, to top music artists like Eminem or Tony Hawk. Climate change activists are also following the NFT wave, but for a different reason. Blockchain, primarily Ethereum is the core technology behind the entire NFT ecosystem. The blockchain’s artsyside, like the more well-known creation known as cryptocurrency, is a great energy guzzler. The topic of how significant digital art has been is still a hot topic.
Cryptoart.wtf was a website that estimated the energy consumption and environmental impact of NFTs. It has since been taken offline. It estimated that an average NFT uses the same amount of electricity as an average EU resident for months. SuperRare, OpenSea and other marketplaces rely on Ethereum blockchain to process transactions and create NFTs. It is expensive to mint digital art that is registered on the Ethereum blockchain. This price is often referred to ironically as Gasoline feeUsually paid in Ether. How much exactly? DigiConomist estimates that a single Ethereum transaction uses the same amount of energy that an average American household spends in nine days. The carbon footprint of an Ethereum transaction is equal to the carbon footprint of 273,985 VISA transactions or 200,003 hours of YouTube watching.
In terms of annual figures, the total electricity consumption of the Ethereum ecosystem can be compared to the national energy need of the Netherlands. DigiConomist. As Ether’s market value rises and the gas cost goes up, so does the value of transactions on the proof of work blockchain. Digital artist Chris PrechtHe calculated that 100 copies of his three NFTs would require the same amount electricity as a European home for two decades. It is difficult to quantify the impact NFTs have on each piece of the global blockchain network. This is because NFTs only make up a small portion of the global blockchain network. NFTs are experiencing explosive growth which means that their energy consumption and resulting environmental impact are increasing rapidly.
An Industry-Wide Shift Is Needed
Per an EstimateIndependent researchers have determined that one NFT piece can emit a carbon footprint of approximately 211 kilograms. That’s equivalent to flying for 2 hours, driving around 1000 km in a petrol car, and using a laptop 3 years. A digital art piece requires very little energy. It is the following blockchain-linked activity like bidding, ownership transfer, minting, and bidding that consume the most energy. There are a few ways to alleviate the environmental impact of NFTs. The first is to switch from the proof-of work blockchain architecture to a proof of stake system for verifying transactions.
It is still a work-in-progress for Ethereum, and is expected to occur in the second quarter 2022. Cardano, Solana and others have adopted the proof-of–stake blockchain system. This would ensure that Ethereum transactions are less energy-intensive. Experts also suggest adding a LayerOn top of the existing blockchain. The second layer of the blockchain is used for trading. When a deal is done, the parties switch back to the first layer to authenticate the transaction. Although it doesn’t solve all NFT-related environmental problems, it can at least reduce their impact. Another solution is to link all blockchain activities with renewable energy sources like solar harvesting. In a world that still depends on fossil fuel energy, the shift towards a cleaner and greener blockchain is necessary. NFTsIt is still far away.
Sources: DigiConomist, Chris Precht / Instagram, Memo Akten
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