Are NFTs Bad for the Environment?
You'll probably see another person who has banked a fortune from the generation and sale of NFTs. That notion is what's inspiring more investors to take heed of these profitable opportunities.
However, increasing public awareness has also sparked concern about how these NFTs are created and how they may impact the ecosystem. Can a digital asset like an NFT be bad for the environment?
First, we need to recap the definition of an NFT and how they work to gauge an understanding of how they affect the environment.
What is an NFT?
You've probably heard the buzzword NFT floating around the web. Still, many struggles to understand what they are and why they are so relevant in today's marketplace.
An NFT stands for non-fungible token. In simple terms, it's a one-of-a-kind digital asset that takes the shape of real-world objects such as art, music, video game items, and more.
NFTs are traded in marketplaces, generally with cryptocurrencies. They use the same blockchain technologies to authenticate owners and ensure that each asset is uniquely identifiable. However, because their authentication, sales, purchases, and transfer consumes significant amounts of energy to validate, NFTs have drawn environmental concerns.
But can a digital asset be that bad for the environment?
Can an NFT Affect the Environment?
NFT purchases and sales use the same blockchain technologies in cryptocurrency transactions, which have raised criticism of their environmental impact. As the NFT trade grows in popularity, we see sizeable transactions in the marketplace, validated by energy-guzzling computers.
The growing concern is that the more NFTs become of interest to the global population, the more carbon emissions are caused by the energy consumption of the mining rigs. The computing power required to solve the complex math problems involved fast will use a lot of electricity. It will only rise if the general population starts trading NFTs more.
Their environmental impact is not seen, but it's undoubtedly having a negative effect. We can break down how NFTs affect the environment by investigating the different ways they leave a carbon footprint.
3 Ways That NFTs Impact the Environment
Ethereum is the blockchain technology that oversees much of the NFT trade. The cryptocurrency that supports the sale and purchase of the assets requires 'miners' to validate the transactions, using hefty computing power that consumes a concerning amount of energy, thus increasing the carbon footprint.
Getting a better understanding of the environmental impact means looking at the core factors behind the NFT marketplace.
1. The location of the NFT listing
NFTs will get listed on marketplaces such as the popular OpenSea platform. Listing an NFT is environmentally harmless, though the purchase and sale process of the location where it's listed is an essential factor.
Most marketplaces will integrate the Ethereum platform to facilitate the purchase and sale of the NFT. The transaction will use an energy-heavy process known as the 'proof-of-work' that verifies and mints the NFT.
Any location that uses the proof-of-work process arguably leaves a carbon footprint in each transaction.
2. The minting process after purchasing the NFT
The minting process involves publishing your NFT to the blockchain, giving it a unique token to guarantee authenticity. That validates the digital asset as one-of-a-kind to make the product more attractive to potential buyers.
The critical factor of why the minting process can be an environmental concern is the computational power needed to store the NFT on the blockchain and that each mint requires cryptocurrency fees. Most of these payments are made in Ethereum (ETH), where intense mining power is necessary to create the currency. Buying it means there's a continual demand for more.
The energy consumed in the mint and mining processes double-down on the environmental impact.
3. Storing and transferring the NFT
Storing the NFT refers to when the purchase is complete, and your new asset sits in your digital wallet. There isn't any environmental harm from holding your NFT, but the rinse and repeat cycle of sale brings the most worry.
Should an owner wish to resell their NFT to another keen buyer, the transfer of the asset involves the mining and mint process all over again. This could be relatively infrequent, but more public awareness in NFTs sees a more rapid trade of assets, similar to that seen in the stocks and shares market.
Increased trade with energy-guzzling machines could be detrimental to the environment.
The environmental impact of NFTs is challenging to gauge, considering they aren't immediately seen by those that trade them. It leads many to question the statistics behind their ecological damage and whether they are unsustainable.
How Bad are NFTs for the Environment?
The common misconception is that NFTs are just digital assets found on the internet. But as mentioned earlier, the emissions that they cause are staggering.
We're seeing the average NFT emit about 211kg of carbon dioxide. That's nearly 100 times more than the emissions associated with selling a piece of art, or the same as driving 100 miles in your car.
The proof-of-work process proves that it's an unsustainable practice for the future. Despite the 'gas' fees (mining costs) behind each transaction's promise to donate to offset carbon emissions, the concern rises faster than action.
The bottom line is that the current proof-of-work practices found in the NFT transactions are unsustainable and are heading to be a grave worry for the environment. But that won't stop persons trading NFTs if they continue to be profitable.
Is there an answer to a more sustainable NFT trade?
Is There an Eco-Friendly Solution to the NFT trade?
As more people get involved in the NFT trade, there has been a significant investment of time and resources to find solutions to offset the environmental impact of mining and minting. There have been a few innovative advancements that make the current process less harmful to the environment, including the following:
Using Renewable Energy to Power Machines
Electricity required to power these directed mining rigs can come from renewable sources. Solar, wind, and hydropower are options that will not emit any carbon emissions, no matter how intensive the computer's performance.
Portions of Proceeds Invest in Eco-Friendly Solutions
Some marketplaces now commit to investing a portion of profits towards renewable energy or environmentally-friendly technologies.
Carbon Offset Credits
Prominent NFT investors may see their practice questioned by the general public. Allowing the purchase of carbon offset credits could provide an additional financial incentive to research and develop technologies to minimize or eliminate the impact of the NFT trade.
While these ideas can help reduce the carbon footprint of the current NFT transaction process, the environmental impact they have is still severe. The most eco-friendly solution to the marketplace would be to change the transactional method entirely.
The proof of stake method effectively generates NFTs without impacting the environment.
The Proof of Stake Method
The proof of stake method is one of the leading solutions to making NFTs more eco-friendly. The core value of the process is that it doesn't use excessive computing hardware and, subsequently, energy to carry out the work required to mint the assets.
How does the proof of stake method work? In simple terms, the process uses random miners to validate transactions. They will stake coins to become a validator.
The mechanism replaces the need for computational power by randomizing miners' ability to verify rather than picking one based on the size of their mining rig. This discourages the practice of building environmentally unfriendly hardware farms.
Blockchains that use proof of stake can operate without needing a lot of electricity to power the mining machines. The Polygon Blockchain is leading the pack in making the NFT trade more sustainable.
The Polygon Blockchain
Polygon has committed to a carbon-negative platform in 2022 and will become the first blockchain to be climate positive. The team has already committed to proof of stake mechanisms to validate transactions. They have now pledged $20 million to offset carbon footprints, spearhead initiatives, give resources to eco-driven miners, and donate to NGOs fighting climate change.
But if you're an NFT buyer, is there more you can do to help the environment?
Are There NFTS That Help the Environment?
NFTS that is minted on the Polygon blockchain make a significant impact on reducing carbon emissions, given their recent pledge. The most prominent NFT collectibles that care about climate change are The Inus. They are a series of adorable, aesthetically pleasing dogs quickly being snapped up because of their considerable value to buyers.
The Inus are Your Eco-Friendly NFTs
If you're looking to invest in sustainable NFTs, The Inus assets are a good choice now and in the future. They are an eco-friendly NFT range driven by considerable care for climate change and respect for the environment.
They choose to generate the NFTs on the Polygon blockchain because they share the same environmental values and the low gas fees for purchase. Let's not forget the wealth of other benefits such as affordability, mentorship programs, and IP rights.
So if you have yet to jump on to the rewarding NFT trade, why not start with The Inus?