NFTs and the Environment, Will Non-Fungible Token NFTs Harm the Environment?

Dec 29,2022
NFTs and the Environment, Will Non-Fungible Token NFTs Harm the Environment?

The method of NFT creation can be very energy-intensive. Since Ethereum transitioned to Proof-of-Stake, most NFTs are minted by the blockchain, without the large amount of energy that Proof-of-Work blockchains require. Blockchains that require energy-intensive processes, whether crypto-related or otherwise, generate excess carbon if they consume energy from non-renewable resources.

Read on to learn more about how energy is consumed in production and learn about what developers are doing to reduce their environmental impact.


Key Takeaways:

1. Non-fungible tokens (NFTs) can be harmful to the environment depending on how they are produced.

2. Minting a single NFT using a proof-of-work blockchain consumes the same amount of electricity as the average American household uses in about 47 days.

3. Blockchain developers and communities are working hard to find ways to reduce or eliminate the impact of NFT on the environment.

4. Ethereum is the leading blockchain for minting NFTs. Its transition to called TheMerge on September 15, 2022 resulted in a significant reduction in Proof-of-Work NFT energy usage.


How NFTs Impact the Environment

NFTs themselves do not affect the environment, but the method of their minting can have a significant impact on the environment. Let's take a look at how the following content NFT is made:

NFTs are minted (usually) on digital marketplaces: NFT creators use marketplace platforms to upload NFT information, which is then tokenized and stored on the blockchain. Token is the process of generating a key for an asset. NFT is "cast" through this process.

NFT Listing: Once an NFT is minted, the creator can put it on the market. NFTs can be listed or auctioned for a fixed price.

Buy NFT: When buying NFT initiates a blockchain transaction. The blockchain network will start verifying the transaction and will start verifying that the NFT transfers ownership to a new owner.

Different blockchains will process transactions according to their programming. Below are the two most commonly used consensus algorithms, Proof-of-Work and Proof-of-Stake, and how each algorithm NFT is handled.


NFT passes proof of work

When buying NFT when the transaction occurs. On a proof-of-work blockchain, this means that a network of miners must compete to be the ones validating transactions so they can earn blockchain rewards. The process is as follows:

1. Transactions are queued and broadcast to the network.

2. Once a job is received, the network starts mining.

3. Mining is the process of sending a long hexadecimal number through a hash function (for example, SHA-256) to generate another hexadecimal number smaller than the assigned NFT. The miner's first attempt is to add a nonce to the original hex, then on each attempt the value 1 is added to the nonce. For example, the first random number might be 21. The next attempt will use 22, then 23, and so on.

4. The mining process becomes a grind, producing a number that is done by a computer. The probability of guessing a hexadecimal number is 1 in 115quattuorvigintillion (115 followed by 75 zeros). The first to generate a number smaller than the block header, the raw hexadecimal number, may take trillions of tries.

5. Once a number is generated, the block is confirmed, the transaction is closed and the network is moved to the next unimaginable test time to solve the hash. Sending a number through a hash function and the act of doing so is called hashing. Miners "hash" or can "hash" at a certain rate. One attempt is one hash, and a miner can do millions of hashes per second. In the long run, the hash rate of the entire Bitcoin network is about 228 exahashes per second (228 followed by 18 zeros), working on a block at a time, averaging about 10 minutes per block.


Because of the huge proof-of-work network working on one block at a time, all miners are trying to generate a lower number, so there is a high energy demand.


NFT via Proof of Stake

On a proof-of-stake blockchain (such as Ethereum), it goes through the market NFT process is the same before the transaction can start:

1. Transactions are queued in the network.

2. Randomly distribute mortgage 32ETH to verify the transaction.

3. Only one validator is doing the work, so the energy consumption is much less. In fact, Ethereum claims that it now uses 99.95% less energy under proof-of-work consensus.

4. The verifier verifies the transaction and broadcasts the information to other verifiers, who vote to confirm the block and transaction.

5. The process is not generated with competing numbers, so the energy is less than 0.03 kWh or 30 Wh (equivalent to about 6 x 90 Wh batteries).


A single NFT transaction on the Ethereum platform emits nearly 0.02 kilograms of carbon dioxide, which is equivalent to 44 Visa transactions or watching YouTube for 3 hours.


Can NFT use less energy?

Minting and transferring NFT it may consume a lot of energy, but it is not necessary. Blockchain platforms using a proof-of-stake method of operation can produce NFTs without excessive use of electricity and negative impact on the environment. Unfortunately, the reduction in energy usage has not yet been achieved under proof-of-work blockchains.


However, NFT creators and fans have some options:


Use of Renewable Energy: Using proof-of-work blockchain miners can use renewable energy to power their machines. While proof-of-work mining is energy-intensive, the source of the energy required cannot be emitted.

Renewable Energy Investing: Because some NFT prices are impressive, a portion of these revenues could potentially go toward renewable energy investments. A large-scale transfer of renewable energy could dampen or eliminate the environmental impact of producing NFTs.

Invest in experimental technologies: Proceeds from NFT sales can also be invested in experimental technologies aimed at reducing or reversing the effects of climate change. Carbon capture and storage is one example of an experimental technology that some believe could solve climate change.

Opt for NFTs minted on proof-of-stake blockchains: The most obvious option is to only buy minted NFTs on proof-of-stake blockchains, and only mint them on one blockchain.


Where to Buy Energy Saving NFTs

Buy an NFT if you want to buy it without harming the environment, so you have a lot of buying options. Choosing to use a proof-of-stake blockchain or mint it in an NFT marketplace can significantly reduce its environmental impact. Some well-known proof-of-stake blockchains are:

1. Ethereum: Blockchain is used for everything from simple token swaps to NFTs. Smart contracts. dApps and more. NFT marketplace OpenSea Ethereum.

2. Solana: The Solana blockchain supports a wide range of NFT markets, including MagicEden, Solanart and RabbitHole.

3. Algorand: In addition to several NFT marketplaces, Algorand supports the blockchain Aorist, a climate-focused artist NFT blockchain. Algorand is a perfect fit for a blockchain to support NFTs because this blockchain is designed to never fork or split into duplicate versions.

4. Cardano: Cardano is an environmentally friendly blockchain. NFT marketplaces hosted on Cardano include CNFT and GalaxyofArt.

5. Tezos: Tezos has multiple blockchain NFT marketplaces, including Rarible, which operates NFT artists and supports artists to create NFTs.


Can Environmentalists Invest in NFTs?

If you care about fighting climate change, but want to invest in NFTs, you might feel that those two goals are at odds. You can buy NFTs while protecting the environment, but, to avoid using electricity for nearly 48 days, you can't just buy NFTs of anything.

If you are committed to keeping your portfolio aligned with your stance on climate change, you should only invest in proof-of-stake NFTs generated using consensus methods. The Ethereum platform has completed the transition to certificates of equity, so environmentally conscious investors can buy NFTs minted on Ethereum (ETH) without worrying about environmental issues.


Are Non-Fungible Tokens (NFTS) Bad for the Environment?

When energy-intensive methods such as Proof-of-Work are used, NFT minting is a market where the Non-Fungible Token (NFT) environment may suffer, such as increasing the carbon footprint. Instead, mint using a proof-of-stake blockchain. NFTs have significantly less environmental impact.

How Much Energy Do NFTs Use?

Minting an NFT on the Ethereum platform uses less than 0.03 kWh of electricity - three hours watching YouTube. Minting one on a proof-of-work blockchain uses the same amount of electricity that an American household uses in about 47 days.


Can Environmental. Social and Governance (Esg) Investors Buy NFTs?

Prioritize the environment. Investors with social and governance (ESG) issues may consider minting proof-of-stake blockchain NFTs, as their environmental impact has been significantly reduced.