There has never been any major technological or digital advancement that did not come with some sort of price. When we started exploring oil and its possibilities in the 90s, we didn’t know that we would raise the temperature of the earth by almost 100% Climate change and global warming has been a major issue for the past 30 years, and sadly, cryptocurrency might be compounding that problem today. Recently, Elon Musk (CEO of Tesla, SpaceX) announced that Tesla is no longer buying any bitcoins because of the impact on the environment and He did so for good reason. The carbon emissions that accompany cryptocurrency mining and transactions will only get worse as it grows popular worldwide. In this article, we want to take a look at NFTs (the new buzz in the blockchain space) and the carbon footprint.
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What is an NFT?
Before we take a look at the carbon footprint of NFTs and their impact on the environment, we should have a little background on what NFTs are and the purpose that they serve. An NFT is a non-fungible token used as proof of ownership for a piece of digital art. They allow artists and creatives to assert originality in their work by providing the art with a digital identity that is verified on the blockchain ledger. Even though NFT can still be copied, the original minted version will always be on the blockchain record and nobody can steal it away from the artist.
What is a carbon footprint?
The carbon footprint of any product is a round figure of all the carbon emissions released from creation to consumption of a product. It is not easy to calculate the exact carbon emissions generated by anyone product because the process is always very diverse. For example, if you want to calculate the carbon footprint of a football match, you have to look at the gas emissions released by the cars of football fans and teams, the gas emissions that come from running the stadium, and all its equipment during the match and also the gas used in running all the broadcasting stations all over the world. It is safe to say that it is impossible to accurately measure the carbon footprint of any product or service. This is why we use estimates for the calculation
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NFTs and Carbon Footprint
The digital art themselves do not carry any carbon footprint. However, the process of minting and transacting NFTs has outrageous carbon footprints. An average transaction for one NFT is 48kg C02 and that occurs anytime an NFT is minted, bought, or sold. This is because NFTs run on the Ethereum blockchain and over the years, Ethereum has been notorious for its increasing gas fees. The blockchain consumes a lot of energy to process a single transaction. If you want to gain perspective on the issue, then look at it from this angle. The carbon footprint generated by a single NFT/Ethereum transaction is equivalent to 74,000 VISA transactions.
The solution
Ethereum runs on a proof of work system and that is why it consumes so much energy. Ethereum developers are set to launch an upgraded Ethereum 2.0 version that runs on a proof of stake system and significantly uses way less electricity than what we currently have today. Proof of stake blockchains like Tezos and Polygon already consume much less electricity and NFTs enthusiasts can divert their trade to these platforms in the meantime.
Summary
NFTs have such a huge potential for the future and people are currently making a lot of money from it today. Should you stop exploring the NFT space because it is slowly destroying the planet? Well, that is up to you. However, you must have this information so you can make well-rounded decisions.