Are you aware of the dark side of NFTs? If not then you are on the right article. NFTs hold great benefits for digital traders and crypto owners. However, there is a concrete fact attached to them. It is the environmental impact created by NFTs.
The power usage and heat production from NFTs is leading to alarming environmental situations. Due to a lack of filtration, these byproducts accumulate in the environment, making it exposed to the dangerous discharge of gases, heat, and emissions.
NFTs are like tokens with a rare combination and function through a Blockchain. Ethereum is a standard Blockchain for minting NFTs and performing their transactions. Due to this, Blockchains like Ethereum have securely made it more convenient to buy and sell NFTs on several marketplaces.
However, the minting of NFTs goes through an extensive process. For this reason, the experts believe it also influences the environment in a negative way. Supercomputers in minting increase the consumption of electricity. It increases the vulnerability of the environment to harmful gases and emissions also.
Source: nbcnews
How Do NFTs Generate Harmful Carbon Dioxide?
The core aspect of the entire minting process is the Proof of Work Consensus algorithm. The role of Proof of Work is to confirm the transactions and token mining. It requires miners to solve mathematical equations.
To do this, they need supercomputers and mining machinery. Due to this fact, nobody can tamper with the Blockchain. If we talk about Ethereum, a single transaction requires 40kWh-48kWh for smooth functioning.
As more transactions occur, this energy consumption also accelerates. The figures increase from 48kWh to about 70kWh. It is the energy consumed by one NFT transacted by many sellers and buyers.
Now this NFT generates carbon dioxide into the environment during this process. The emission of this CO2 gas makes up about 80Kg-83Kg in quantity.
The Proof of Work minting approach releases harmful carbon dioxide into the environment. But the amount of electricity the computation utilizes for minting is no less.
How Does Proof of Work Relate to Energy Consumption?
The computing network is the main reason behind this power or electricity consumption on a large scale by NFTs. To understand this point, we must dig deeper into the technical aspects of the process.
Step # 1
The primary step is to list an NFT on a marketplace like Opensea or Rarible. The seller will transfer the ownership of an NFT to a potential buyer. It does not require any energy, and the process is simple. It only requires a collection of NFTs and a crypto wallet like Metamask.
Such wallets store your digital currency generated in exchange for transactions. These marketplaces function on Ethereum, which consumes a large amount of energy. In this case, the main character is the Proof of Work consensus algorithm.
Step # 2
A buyer purchases NFT, which triggers an extensive network of crypto miners. They have a nexus of supercomputers and other hardware devices specially designed, programmed, and manufactured for NFT minting. It is the step where the Proof of Work approach comes in.
The miners must follow this approach and resolve some tricky mathematical calculations. These can be some algebraic problems to mint that particular NFT for transactions. It is the most energy-consuming step in the entire process of minting. Due to massive computational power, Proof of Work also demands a big chunk of electricity.
Step # 3
In this step, the buyer finally becomes the owner of the NFT. There is no consumption of energy at all. Due to Blockchains like Ethereum, the profiles of the users showcase the details of each transaction.
These include the usernames of the buyers and sellers, the revenue generated to the seller, and the royalty or credit acquired by the seller as future transactions occur. It makes everything available for the public to see as potential information.
Why Does NFT Mining Create an Adverse Impact on the Environment?
The Proof of Work algorithm is integral to Blockchains like Bitcoin and Ethereum. It requires impetuous minting hardware and computational power.
When crypto miners mint many NFTs for the buyers, they have to solve some challenging mathematical problems called Proof of Work. It means that the miners have to solve the calculations to earn the right to mine NFTs in real by giving “Proof” of their work.
The performance of these supercomputers during calculations consumes tons of energy and power. The systems produce heat as the byproduct of their functioning for the miners. Due to this fact, the machinery has carbon emissions with heat. The systems release these byproducts into the environment without any filtration.
It negatively affects the atmosphere and causes high rates of carbon emissions. For this reason, climatic fluctuations like global warming arise. It creates adverse impacts on the population as well.
As this issue about NFTs is drawing the attention of many people, different startups are spreading the word about it. It has been seen that these companies channel their adept workforce in manifesting this issue in a better way.
What Approaches NFTs Can Use for a Clean Environment?
NFTs are now an outstanding contribution to the digital world's slow but inevitable transformation. Some myths about the environmental impacts of NFTs create doubts among tech enthusiasts. But some viable measures can reduce the NFT-driven lethal emissions. These can be helpful in the long run.
Using the Proof of Stake method: The Proof of Stake is a leading cause behind low rates of NFT-caused emissions. It is because (PoS) does not need heavy computational power for mining. When miners follow this approach, they put forward a stake that says “Agree not to Sell or Trade” their digital assets or NFTs.
The reason behind mentioning this method is to highlight its crucial benefit. Such algorithms like (PoS) do not need miners to use supercomputers and energy for mining. It differentiates Proof of Stake from Proof of Work.
Renewable Energy Resources: These are a new trend among traders of NFTs. Because these can help reduce emissions. Solar energy, hydro energy, and wind energy can remove these fatal emissions from our environment.
Besides, investing in such energy forms can give birth to an unfamiliar method. It will be helpful to sustain a healthy balance between NFT trading and a clean atmosphere. People from these two sectors come together to make these transactions trouble-free. It will make the world witness some superior outcomes in the forthcoming years.
Energy-efficient NFTs: Various Blockchains are competent to use NFTs that are energy-efficient. It means that using these Blockchains will not negatively impact the environment. These are Solana, Cardano, Tezos, and others.
The plus point of these blockchains that sets them apart from Ethereum and Bitcoin is their Proof of Stake algorithm. It does not require miners to perform calculations. It follows the staking approach. Such an approach produces little or no carbon-based emissions. It also significantly contributes to the collateral reduction of electric or power wastage.
Image: Beeple, "EVERYDAYS: THE FIRST 5000 DAYS (detail)," 2021
The Bottom Line
Carbon emissions are an irrefutable fact connected to NFTs. The transactions involve the mining process by computational power. The process causes the large-scale generation of heat and other emissions.
The overall influence of NFTs on different sectors is hard to ignore. It has been obvious that the population is witnessing drastic shifts while NFTs are transforming the world. The execution of NFTs in futurity is going to be an unwavering aspect for both traders and investors.
Considering this fact, experts are trying to develop different ways to maintain the balance between NFTs and the environment. They are investing several person-hours in devising efficient ways to eliminate the carbon footprint produced by NFTs from the environment like Proof of Stake.
However, it demands time and patience. Similar to other technologies like AI, machine learning, and robotics, smart devices like smartphones and smart LEDs need sufficient power supplies and energy consumption for stress-free operational activities.
It is clear that shortly, professionals and experts will be able to rectify this problem that is causing uncertainty to environmentalists and the NFT-oriented workforce. With corrections and advancements in Blockchain systems and mining procedures, we will experience some remarkably modified versions for easy-going.
The progress will enable the developers and programmers to come up with viable ideas and rectifications, keeping the environment in mind. Since it is inevitable for the pursuit, the world is moving forward with the shift from primitive to modern and tech-based uses of devices in routine.