The Climate Consequences of NFTs

Non-fungible tokens (NFTs) are a new form of crypto tokens that are sweeping through the world and quickly becoming cryptocurrency's "next big thing." NFTs are one of a kind pieces of digital property that track the value and authenticity of anything from drawings to music to quotes. They are designed to give the buyer ownership of the original work and the acclaim that comes with owning one of these valuable pieces. NFTs popularity and value are currently growing at an exponential rate and are headed towards a much larger and fluid market, but not everything about these NFTs are as good as they may seem.

The problem stems from NFTs being part of the Ethereum blockchain. Ethereum is a major cryptocurrency built on "proof of work," a security system for cryptocurrencies that is needed as there is no third party involved with their transactions. To remain safe, this "proof of work" system creates extremely complicated puzzles and mazes that can only be solves by machines that have to burn through extremely large amounts to energy to acquire the cryptocurrency. This defense is actually done on purpose to make the act of "mining" for this cryptocurrency less profitable, but it has an extreme negative effect on the environment.

Any time somebody buys or sells an NFT they are partially responsible for the emissions generated by those Ethereum miners, but while it's hard to say that one is responsible for the emissions from those miners because they would've mined anyway, each sale of an NFT drives up the popularity and demand around NFTs, mining, and therefore greenhouse gas emissions as well. A single NFTs carbon footprint can be estimated to be around the same amount as an EU residents electricity usage for a few weeks, so in the context of their being thousands of NFTs with the market and supply growing everyday, it becomes clear just how damaging this industry can be.

This is not to say that to protect the planet we have to abandon all NFTs, there are ways to make them more eco-friendly. One solution that companies are taking is using oil waste and having it undergo the process of pyrolysis to generate alternate electricity to use in mining, cutting out the emissions coming from during fuels to make energy. Another route to take, and the route I see as the most sustainable for an eco-friendly future of NFTs is "proof of stake" security protection. This is a form of security for NFTs part of a non-Ethereum blockchain that requires owners to put up tokens or money as proof of their stake in the process that are taken away under suspicion, removing the need more complex miners and their emissions. With the current state of climate change and the need for change across all fields, the NFT world and community also has a role to play in reducing emissions and stopping NFTs from becoming another climate threat as their market grows.

Sources:

https://time.com/6120237/nfts-environmental-impact/

https://www.wired.com/story/nfts-hot-effect-earth-climate/

https://www.cnn.com/2021/03/17/business/what-is-nft-meaning-fe-series/index.html