Are NFTs Bad for the Environment? They’re Getting Better
by Corporate Trash
Many who are new to the NFT space want to know if NFTs are bad for the environment, since energy-intensive blockchains are a common concern among blockchain critics. Some of the blockchains that NFTs are created on — especially Ethereum Proof-of-Work (PoW) — use a surprising amount of energy to process transactions.
Improving its environmental impact is a core reason why Ethereum is transitioning to Proof-of-Stake with The Merge, and it will make NFTs more environmentally sustainable as well.
In the past few years, there have been several new blockchains which focus on low energy usage. Sustainable solutions take time. They will be necessary to address high carbon dioxide emissions from some NFT transactions. This should also foster more widespread adoption for NFTs and crypto overall.
Ethereum Proof-of-Work NFT Energy Usage
A majority of all NFT transactions are happening on Ethereum. One of the best parts about Ethereum blockchain transactions for NFTs is the speed. A single mouse click, some gas fees and the transaction is complete.
But what goes on behind the scenes during that processing time? Miners go to work — and that’s what expends a large amount of energy.
Simply sending or receiving cryptocurrency on the Ethereum blockchain doesn’t use as much energy as working with NFTs. Those transactions are more complex, and therefore demand more mining power.
One engineer studied 18,000 Ethereum Proof-of-Work NFTs. The average NFT on Ethereum gives a footprint of around 340 kWh, or 211 KgCO2. Keep in mind, this includes minting all the way through the sale, and therefore is a much higher figure than a simple Ethereum transaction (around 30 kWh).
To put this in perspective, according to this study, in its lifecycle a PoW Ethereum NFT uses the same amount of energy as:
- Flying for 2 hours
- Using a laptop for 3 years
- Driving 621 miles
But things are about to change for the better, with a switch to Proof-of-Stake.
A Note on PoW Energy Usage
Bitcoin is also a Proof-of-Work blockchain, with no plans to change to Proof-of-Stake. Bitcoin transactions use more energy than Ethereum transactions on PoW, and Ethereum will soon be moving to Proof-of-Stake, which is much more environmentally friendly.
The biggest proponents of PoW claim that overall, mining still uses much less energy than traditional banking systems, governments, gold mining and more. One example of this is shown below.
While some of this is still up for debate, this is definitely something to consider when looking at crypto overall from an environmental perspective. Is it any worse than the institutions we already have?
Ethereum PoS NFT Energy Usage
Here’s the good news — The Merge is moving Ethereum from a Proof-of-Work to a Proof-of-Stake mechanism in September 2022. This means that instead of miners, the network will now use validators to process transactions. This will cut Ethereum energy usage by up to 99.95 percent, including for Ethereum NFTs.
It’s going to be a major development to drastically reduce CO2 emissions on Ethereum, where many major NFT collections such as Bored Ape Yacht Club and CryptoPunks live.
Environmentally-Friendly Blockchains for NFTs
There are many other blockchains for NFTs that are already Proof-of-Stake, consuming a very small amount of energy to validate transactions.
- Solana is a PoS (Proof-of-Stake) network. Transactions use the energy of less than three Google searches. In 2021, the network achieved carbon neutrality, as it aims to do again in 2022.
- Flow transactions take even less energy than Solana, at the equivalent of one Google search. Flow is PoS but also has a unique “multi-role node architecture” to help it achieve its tiny carbon footprint.
- Polygon is another PoS network (a Layer 2 of Ethereum), and has pledged to go carbon-negative in 2022. It was found that each transaction on Polygon produces just 0.206587559 grams CO2. All Layer 2 chains do require the main Ethererum chain to operate, so the energy impact of transactions between Polygon and main Ethereum chain will improve with the switch to Proof-of-Stake.
- Binance Smart Chain is PoS, and is about 0.004 Wh per transaction.
- Tezos, another PoS chain (see the pattern?) is about 0.001 Wh per transaction. For comparison, each Google search uses .3 Wh.
TL;DR: Are NFTs Bad for the Environment?
So, are NFTs environmentally friendly? The answer is: We’re getting there.
Ethereum transitioning from PoW to PoS will essentially eliminate its carbon footprint overnight (by 99.95%). With $29 billion in all-time NFT sales volume, this is by far the dominant NFT blockchain. Moving to PoS will address a multitude of sustainability issues with the blockchain where the biggest projects and artists live.
It’s an answer to NFT critics who first turn to environmental concerns, as nearly all NFT transactions across the ecosystem will leave a tiny carbon footprint.
Artists have shown major interest in reducing the carbon footprint of NFTs, as they want to create digital art without that concern on their minds. Artnome is offering community bounties for solutions that reduce NFT energy consumption.
Let’s not forget about chains like Tezos, Solana and Flow which are successful implementations of the Proof-of-Stake mechanism for NFTs. While these chains have all had their own unique issues, they are a model for how greener NFTs can be implemented on a wide scale.
The image for this blog was created by Dall-E 2 by OpenAI.