By Ben Hopper
Over the past few months, NFTs or Non Fungible Tokens have skyrocketed in popularity. Celebrities and artists all over the world have been creating and selling NFTs, with some raking in anywhere from thousands to even millions of dollars in an extremely short amount of time. But NFTs are more than just a get-rich-quick scheme; they are also an extreme danger to the environment.
An NFT is a digital asset that is unique and unable to be replicated. It’s like a painting, for example; each painting is unique and one of a kind, that’s why it has value. Whereas a poster or photo of that painting has significantly less value because it is not unique, and it is recreatable. NFTs can range from a drawing, photo, video, gif, piece of music, etc. The sale of NFTs is all online, and due to their digital nature, someone could easily record or photograph them. But its value comes from the fact the owner of it has the original.
The thing that makes NFTs so environmentally harmful is that they are sold using the cryptocurrency Ethereum. Ethereum is a cryptocurrency like bitcoin, and using it results in the release of extremely high amounts of greenhouse gases. The security of Ethereum uses a system called “proof of work.” Proof of work keeps Ethereum secure due to “miners” creating new “blocks,” which store the transactions. The miners then add them to a “blockchain,” which is a linking of blocks together. Miners create blocks by solving difficult puzzles on computers. Along with providing security, miners who create blocks earn Ethereum as a result. But mining results in the use of a staggering amount of electricity. This is because of the number of computers that are running to mine Ethereum.
The annual electrical energy consumed by Ethereum is about the same as the amount used by the entire country of Serbia and with a carbon footprint about the same as the entire country of Lithuania, according to Digiconmist. But it’s not just the mining of Ethereum that causes CO2 emissions. Using Ethereum for transactions is also to blame. Digiconimist estimates that the electrical energy used by a single Ethereum transaction could’ve powered an average household in the U.S. for over two days. As for the carbon footprint of a single Ethereum transaction, that’s equivalent to over 73,000 VISA transactions.
The electrical energy and carbon released from the sale of NFTs, however, is even larger though. Erin Davis in an article for qz stated, “Although we can’t estimate the carbon footprint of each step of the NFT minting process, we do know the print would have to be bought and sold at least 91 times to be as carbon-emitting as one average sale of an NFT and that driving a car 100 mi releases just 20% of the emissions of the average NFT sale.” This shows the extreme harm the sales of NFTs are doing to the environment. As well, NFTs can easily be resold an unlimited amount of times. This could lead to an endless cycle of emissions being released as the result of a single NFT.
Although Ethereum 2.0 is being developed and will be a cryptocurrency that’s much better for the environment. The current proof of work system Ethereum relies on will be replaced by a “proof of stake” system that wouldn’t use mining and, as a result, won’t be using as much energy. But it could take years for Ethereum 2.0 to be released, and using Ethereum prior to that will only cause more environmental harm. The cost of an NFT is more than what you spend on it. It also costs the health of the planet.