Kiera Jefferson
The rise of non-fungible tokens (NFTs) has sparked a debate about their environmental impact. NFTs are unique cryptocurrency tokens that can represent digital art, GIFs, or even tweets. The process of creating and purchasing NFTs, particularly those on the Ethereum blockchain, has been criticised for its high energy consumption and associated greenhouse gas emissions. Artists and environmentalists are concerned about the carbon footprint of NFTs, with some taking steps to offset their emissions or explore more sustainable alternatives. While there are efforts to reduce the climate impact of NFTs, the industry's rapid growth and reliance on energy-intensive blockchain technology continue to pose challenges.
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What You'll Learn
The carbon cost of secondary sales of NFTs
The secondary sales of NFTs, or the resale of previously purchased NFTs, also contribute to carbon emissions. Each time an NFT changes hands, there is a carbon cost associated with the transaction. The sale of an NFT typically produces 51 kg of CO2, while the transfer of ownership adds another 30 kg, resulting in a total of 81 kg of CO2 for each secondary sale. This is equivalent to 1.35 trees needed to offset the carbon emissions.
Some NFT collections have a particularly high environmental impact due to the large number of secondary sales. CryptoKitties, for example, has had 2.02 million primary sales and 892,390 secondary purchases, resulting in 72.28 million kg of CO2 emissions from the secondary sales alone. Other collections with significant carbon footprints from secondary sales include Sorare, Axie Infinity, and Art Block NFTs.
The carbon cost of secondary NFT sales is an important consideration in the broader discussion of the environmental impact of NFTs and blockchain technology. While there are ongoing efforts to develop more sustainable cryptocurrencies and blockchain platforms, the current energy consumption and emissions associated with NFTs are contributing to global warming. Artists and environmentalists are pushing for change, and there is optimism that the emissions from NFTs will become a non-issue in the near future.
To address the carbon cost of secondary sales, NFT marketplaces may need to adopt more efficient technologies and explore alternative blockchains that do not rely on energy-intensive mining processes. Additionally, individuals can use NFT carbon footprint calculators to understand the environmental impact of their NFT transactions and make informed decisions about their purchases.
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Artists' efforts to reduce the environmental impact of NFTs
Artists are at the forefront of pushing for change in the NFT space, advocating for more sustainable crypto art. Some artists are choosing to swear off NFTs altogether, despite the high financial gains, due to their environmental impact. Artists are also leading the charge in exploring more sustainable alternatives to Ethereum, with some choosing to mint their NFTs on cleaner cryptocurrency marketplaces.
One such artist is Damien Hirst, who launched a collection of NFTs on the Palm sidechain, which is claimed to be 99% more energy-efficient than PoW systems. Other artists are raising awareness about alternatives to Ethereum, with one artist stating that if creators do not want to be associated with an inefficient and wasteful network, they should not mint NFTs on Ethereum or any other proof-of-work chain.
Artists are also coming together to sell carbon-neutral artwork and raise funds for organisations like the Open Earth Foundation, which works on the development of blockchain technology for climate accountability. Artists are even leading efforts to raise money to reward those who can figure out new ways to make crypto art more sustainable.
Some artists are taking a closer look at their own energy use and committing to reducing their carbon footprint. For example, Joanie Lemercier, a French artist and climate activist, has tracked his energy use and vowed to reduce it by 10% each year, a goal he has successfully met.
While the debate continues over the direct emissions responsibility of NFTs, artists are actively exploring and implementing solutions to reduce the environmental impact of their work.
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The energy intensity of blockchains like Ethereum and Bitcoin
Bitcoin, on the other hand, is estimated to consume 127 terawatt-hours annually, more than many countries, including Norway. The Bitcoin network's carbon footprint is comparable to that of Qatar, and its power consumption is similar to that of Poland. The mining process for Bitcoin requires a significant amount of energy, and the carbon intensity of electricity used has increased due to the mining crackdown in China, which resulted in miners moving to countries relying on coal- or gas-based electricity.
The large energy consumption of Bitcoin is due to its proof-of-work mining algorithm, which is an energy-intensive process that requires significant computing power and specialised hardware. Ethereum, however, has moved away from proof-of-work and adopted a proof-of-stake consensus mechanism, reducing its energy consumption by over 99.9%. This shift makes Ethereum's energy usage similar to that of a Mastercard transaction, significantly reducing its environmental impact.
The high energy intensity of blockchains has led to debates within the crypto community about the future of these technologies. Artists, in particular, are pushing for a more sustainable future for crypto art, and some are even taking individual action by investing in renewable energy projects to offset the emissions from their NFTs. While there is optimism that the emissions will become a non-issue in the near future, the current energy intensity of blockchains like Ethereum and Bitcoin remains a pressing concern for those involved in the industry and beyond.
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The environmental cost of blockchain technology
Blockchain technology, which forms the basis of cryptocurrencies like Bitcoin, is associated with substantial greenhouse gas emissions. The process of creating and purchasing NFTs, or non-fungible tokens, has come under scrutiny for its environmental impact.
The creation and sale of NFTs require a significant amount of energy, resulting in notable carbon emissions. For instance, the sale of a piece of crypto art by Joanie Lemercier consumed as much energy as his studio uses in two years. This sale produced 8.7 megawatt-hours of energy, leading to concerns about the environmental consequences of the burgeoning crypto art world.
The Ethereum blockchain, which is commonly used for NFT transactions, has been singled out for its high energy consumption. Ethereum uses a system called Proof-of-Work (PoW), which demands massive computing power and electricity usage. The energy-intensive nature of Ethereum has led to comparisons with the energy usage of entire countries, such as Libya.
The environmental impact of NFTs extends beyond the initial creation and sale. Secondary sales and transfers of ownership also contribute to carbon emissions. It is estimated that the sale of an NFT produces 51kg of CO2, while the transfer of ownership adds an additional 30kg. As a result, each secondary sale of an NFT generates 81kg of CO2.
However, it is important to note that the carbon impact of the NFT process is not entirely clear, and there are uncertainties regarding the carbon footprint of specific steps. Some argue that the Ethereum network itself is to blame for the emissions, rather than attributing it solely to NFTs. Additionally, the concept of individual carbon footprints has been criticised for shifting the focus away from large corporations and industries that contribute significantly more to carbon emissions.
Despite the concerns, there is optimism for a more sustainable future for crypto art. Artists are advocating for change, and alternative blockchain systems like Proof-of-Stake (PoS) offer more energy-efficient solutions. Ethereum itself is transitioning to a PoS system, which is expected to significantly reduce its energy consumption. Artists are also exploring ways to offset the emissions associated with their NFTs by investing in renewable energy projects or technologies that mitigate carbon emissions.
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The carbon footprint of minting an NFT
The process of minting an NFT has a significant carbon footprint, contributing to the climate controversy surrounding NFTs. Minting an NFT involves using blockchain technology, which requires a significant amount of energy and results in greenhouse gas emissions. The specific carbon footprint of minting an NFT is difficult to estimate due to the many unknown variables in the process, and there is a lack of scientific peer-reviewed studies on this topic. However, we can look at some estimates and examples to understand the scale of the environmental impact.
The sale of an NFT will produce an average of 51 kg of CO2, with an additional 30 kg for the transfer of ownership, resulting in a total of 81 kg of CO2 for every secondary sale of an NFT. To put this in perspective, a single tree can offset 60 kg of CO2, so it would take around 1.35 trees to offset the carbon emissions of a secondary NFT sale. Over its lifespan, an average NFT is estimated to produce 211 kg of carbon dioxide into the atmosphere, which would require 3.52 trees to offset.
Some artists and environmentalists are optimistic about the potential for a more sustainable future for crypto art and NFTs. There are efforts to raise money to reward people who can find new ways to make crypto art more sustainable, and some artists are committing to making their artwork carbon "neutral" or "negative" by investing in renewable energy projects or technology that removes CO2 from the atmosphere. Additionally, blockchain platforms like Tezos, Symbol, and Polygon support NFTs and use a Proof-of-Stake (PoS) system, which consumes much less electricity.
While the carbon footprint of minting an NFT is a cause for concern, it is important to note that the responsibility for reducing the environmental impact should not fall solely on NFT artists and consumers. The cryptocurrency industry as a whole needs to transition to more sustainable practices, and individuals can also contribute by making conscious purchasing choices and supporting sustainable alternatives.
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Frequently asked questions
It is difficult to calculate the exact carbon footprint of NFTs as there are many unknown variables in the process. However, it is estimated that an average NFT will produce 211kg of carbon dioxide (CO2) over its lifespan.
Secondary sales of NFTs also have a large carbon cost. The sale of an NFT will produce 51kg of CO2 on average, and 30kg is used for the transfer of ownership. Therefore, every secondary sale of an NFT produces 81kg of CO2.
Ethereum, the cryptocurrency that is most commonly used to buy and sell NFTs, uses a large amount of energy and produces a lot of greenhouse gas emissions. It is estimated that Ethereum uses as much electricity as the entire country of Libya.
