Reducing The Environmental Impact of NFTs and Proof-Of-Work

With the record sale of Beeple’s $69 million NFT, the acronym has officially entered the world’s lexicon.

The ecological consequences of creating NFTs are considerations that have yet to enter the limelight.

An NFT is a ‘Non-Fungible Token’, or in other words: a unique piece of digital art. For the first time, digital art can be reliably verified. An NFT cannot be copy-pasted or screen-shotted. This has opened the door for digital artists to truly be able to share their art without fear of compromising their ownership or IP.

Unfortunately, what many miss is that these digital pieces have non-digital consequences. The way an NFT is created and traded is by using platforms built upon Ethereum.

Ethereum is a blockchain that relies on members of the network to reach a consensus so that changes to the ledger can be reflected in every copy. However, the way in which this consensus is reached, and these changes reflected, is not very environmentally friendly.

Ethereum uses a Proof-of-Work algorithm to ensure the integrity of the
blockchain and is the method in which changes to information on the network are verified and added. For example, if Bob sends Alice an NFT, this is a change of information on the blockchain as the ownership of the NFT has changed.

This is a great way of enabling the transfer of ownership – the only issue is the environmental impact of Proof-of-Work. This method of verification requires a lot of computing power for it to function, and therefore, a lot of electricity. This electricity is produced in ways that harm the environment and the wellbeing of all organisms that live within it.

Therefore, NFTs are not environmentally friendly.

The use of this innovative new technology and the observation of our values are not mutually exclusive.

There are alternative blockchains to Ethereum that can be used to make and transfer NFTs that do not require vast amounts of electricity. This is due to the fact that they do not rely on Proof-of-Work to function, but rather use different algorithms such as Proof-of-Stake which has no carbon footprint.

NFT marketplaces with the highest volume of traffic are currently ones built on Ethereum, such as OpenSea and Rarible.

There do exist greener alternatives however that operate on blockchains that do not use Proof-of-Work.

Here is a useful list of NFT marketplaces - and the blockchain they are based upon - that are currently operational, public, and do not cause environmental harm.

These are all examples built on blockchains that do not use Proof-of-Work or any other type of energy-intensive method to maintain their integrity.

Using these options as opposed to ones built on Ethereum has a negligible environmental impact, and means that the benefits of non-fungible digital art can be enjoyed by all without the negative ecological consequences.