Non-fungible tokens (NFTs) have been getting a lot of attention lately. But what are they? And what is their environmental impact?
NFTs are digital assets that are stored on a blockchain. Blockchain is a distributed database that is secure and immutable. NFTs can represent anything that is unique and can be stored digitally, such as a piece of music, an image, or a video.
Since NFTs are stored on a blockchain, they are not subject to the same environmental regulations as traditional assets. For example, NFTs can be created and traded without using paper or other physical resources. However, the environmental impact of NFTs comes from the energy used to power the computers that run the blockchain.
The Ethereum blockchain, which is the most popular platform for NFTs, is estimated to use about as much energy as the country of Denmark. In order to create an NFT on Ethereum, someone must “mine” it by solving a complex mathematical problem. This process requires a lot of computing power, and therefore uses a lot of energy.
While the environmental impact of NFTs is significant, it is important to remember that the technology is still in its early stages. As the industry matures, we can expect to see more efficient and sustainable NFTs.
NFTs on Other Blockchains
Solana’s September 2022 energy use report states that the blockchain consumes about 4,056,273,936 Joules per hour. That’s the equivalent of 9.87 KWh (or just under 0.01 TWh) per year, slightly less than Ethereum now uses.
Other blockchains that support NFTs require similar or even more energy than Ethereum. For example,Flow blockchain from Dapper Labs requires 111 kWh per transaction. TRON’s blockchain uses an estimated 12,880 MWh annually, while EOSIO’s consumption is at least double that. Cardano uses about as much energy as Ethereum.
The high energy consumption of NFTs has led some to question their sustainability. Some argue that NFTs could help drive blockchain adoption and lead to more sustainable practices in the future. However, others contend that the environmental impact of NFTs is not worth the hype.
- NFTs on Other Blockchains
- The high energy consumption of NFTs
- The environmental impact of NFTs
NFTs: the new way to fundraise, and the new way of wasting electricity
NFTs are the new fad in town. Whether you’re an artist, musician, or just a creative individual, you can now put your work up for sale as an NFT. And people are buying them! In fact, NFTs have raised over $250 million so far this year. But there’s a dark side to this new trend.
It turns out that NFTs are extremely energy intensive. In order to create an NFT, a process called mining is required. This process uses a lot of electricity, and as a result, emits a lot of carbon dioxide.
According to research conducted by artist and computer scientist Memo Akten, by the end of 2020, mining an NFT took at least 35 kWh of electricity. This is the equivalent of emitting 20 kg of CO2.
If you’re considering buying an NFT, or creating one yourself, be aware of the environmental impact. NFTs may be the new way to make money, but they’re also a new way of wasting electricity.
Are NFTs sustainable?
Traditional methods of minting and verifying NFTs are indeed energy-intensive. Most of today’s NFTs live on OpenSea, an Ethereum-based platform that is notorious for consuming energy. In these cases, yes, NFTs are harming the environment.
However, it’s important to note that not all NFTs are created equal. Some platforms are working on ways to make their NFTs more sustainable. For example, the Wax network recently announced that it had minted the first-ever “sustainable NFT.” This NFT was made using solar energy and runs on a blockchain that is more energy-efficient than Ethereum.
There are also other platforms working on ways to make their NFTs more sustainable. For example, the Dapper Labs team recently announced a new partnership with Energy Web to create “crypto carbon credits” that will offset the carbon footprint of the games and apps built on Flow, their blockchain platform.
While it’s true that some NFTs are harming the environment, there are also many people and organizations working hard to make NFTs more sustainable. In time, we may see a shift away from energy-intensive NFTs to those that have a minimal impact on the environment.
How does NFT affect the environment?
The traditional methods of minting and verifying NFTs are energy-intensive. Most of today’s NFTs live on OpenSea, an Ethereum-based platform that is notorious for consuming energy. In these cases, yes, NFTs are harming the environment.
The high energy consumption is due to the proof-of-work (PoW) algorithm that most NFT minting platforms use. PoW is an algorithm that requires miners to solve complex computational puzzles in order to verify transactions and add new blocks to the blockchain. The miner who solves the puzzle first is rewarded with tokens. The process of solving these puzzles requires a lot of energy.
OpenSea mints its NFTs using the Ethereum blockchain, which also uses PoW. This means that every transaction on the OpenSea platform requires energy to verify. And because NFTs are often traded multiple times, this verification process happens over and over again, consuming more and more energy each time.
There are some efforts to make NFTs more environmentally friendly. For example, the Enjin platform uses a different algorithm, called proof-of-stake (PoS), which is less energy-intensive. And some platforms, such as SuperRare, only mint a limited number of NFTs, so they don’t contribute to Ethereum’s ever-growing energy consumption.
But even with these efforts, the bottom line is that NFTs are currently harming the environment. If we want to continue using and enjoying them, we need to find ways to make them more sustainable.
Is it expensive to create NFT?
On average, the cost of creating NFT ranges from $0.05 to over $150. The cost of creating NFTs depends on various factors such as the cost of blockchain, gas fee, marketplace account fee, listing fee etc. Ethereum and Solana are the most expensive and cheapest blockchain, respectively.
The cost of blockchain is one of the major factors that determines the cost of creating NFTs. Ethereum, the most popular blockchain for NFTs, has a high cost of entry due to its high gas fees. Solana, on the other hand, is much cheaper to use for NFT creation due to its low gas fees.
Another factor that affects the cost of creating NFTs is the marketplace account fee. Some marketplaces, such as OpenSea, charge a percentage of the total value of the NFT when it is sold. Other marketplaces, such as Rarible, charge a flat fee per transaction.
Listing fees are also a significant cost when creating NFTs. Most marketplaces charge a listing fee in order to have an NFT listed on their platform. The listing fee typically ranges from $0.01 to $1.00, depending on the marketplace.
Overall, the cost of creating NFTs can vary widely depending on the factors mentioned above. However, it is generally not very expensive to create an NFT.
How much energy does Ethereum consume?
One single blockchain transaction of Ethereum equaled the energy consumption of more than several thousands of VISA card transactions in September of 2020. This is according to data from
Characteristic
- Energy consumption in kWh
- 1 Ethereum transaction
- 0.031
- 100,000 VISA transactions
- 148.632
- 2 sept 2022
The data also showed that the energy consumption of Ethereum will continue to increase as the network grows.
As of September 2020, the total energy consumption of Ethereum was about 707 kWh per day. But by september of 2022, it is estimated that the network will require 2800 kWh daily – an increase of almost 400% in just two years.
The reason for this sharp increase is simple: as more and more people use Ethereum, there will be more transactions being made. And each transaction requires energy to be mined.
How can we make sure that Ethereum doesn’t become a huge energy guzzler? The answer lies in making sure that the network is as efficient as possible. And that’s something that the team at Ethereum is constantly working on.