Why NFTs are bad for the planet

It's all about the blockchain.

Erika Goldring/Getty Images; Avishek Das/Shutterstock; Michael M. Santiago/Getty Images; Hanna Andresdottir/Shutterstock

Non-fungible tokens, or NFTs — essentially, one-of-a-kind items that can be bought, sold, traded, and maintained entirely digitally —  have taken the art and collectibles world by storm, creating new opportunities for creating and monetizing digital art, from the virtual equivalent of trading cards to original copies of famous GIFs. But while they continue to grow in popularity and value, there’s another cost associated with these digital tokens that has nothing to do with the price tag: their carbon footprint.

There may be no physical media to hold — no plastic containers produced, no shipping required — but there is a very real and increasing amount of emissions required to power the digital art trade.


The Ethereum blockchain

Bitcoin is the most well-known cryptocurrency, but most NFTs are created and traded on the Ethereum blockchain. This is because the Ethereum blockchain supports the necessary technology needed to create NFTs, which requires the ability to store additional metadata and other information that is not currently supported by the blockchain that powers Bitcoin.

While Bitcoin has come under fire for the amount of carbon emissions each transaction generates, Ethereum also has a carbon footprint problem.

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NFT carbon footprint NFT carbon footprint NFT carbon footprint NFT carbon footprint

According to the Ethereum Energy Consumption Index, a tracker created by Digiconomist, the Ethereum blockchain's carbon footprint has been skyrocketing as NFTs have gained steam. At the time of publication, the cryptocurrency was consuming just over 265 kilowatts of power per transaction — the equivalent to the amount of power the average U.S. household uses in nine whole days.


63 million

The projected annual carbon emissions, in metric tons, of Ethereum — about the same footprint as the countries Serbia and Montenegro.

Digiconomist Ethereum Energy Consumption Index

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Public networks like Bitcoin and Ethereum are notoriously energy-hungry, and that affects the NFTs being built on it. This will only get worse with the rising prices of Bitcoin and Ethereum.

Alex de Vries, founder of Digiconomist

194 years

How long it would take the average EU resident to match the footprint of artist James Jean's first NFT sale, which was responsible for more than 400,000 kilograms of carbon emissions.


The mining issue

Brendan McGill, a software engineer and co-founder of Carbon.fyi, an emissions calculator for Ethereum wallets, says that while there is an environmental cost associated with NFTs, it’s not quite as simple as saying “clicking ‘mint’ on an NFT will directly burn hundreds of kilowatt-hours of energy.”

According to McGill, 99% of the energy consumed in cryptocurrency transactions is consumed by people verifying that each transaction is legitimate. This process, known as mining, requires a lot of computing power, as miners need to decipher a series of very difficult codes that ultimately confirm each transaction. Because there’s no central source to confirm everything, miners need to offer up the processing power of their own machines each time an equation needs to be solved.


This computation happens totally independent of transactions or NFTs ... or any other data in the block. Miners are not choosing to mine because they want to process your NFT. They are mining because they are speculating that sometime in the future, the value of Ethereum might go up.

Brendan McGill, software engineer and the co-founder of Carbon.fyi

This is because miners are rewarded for contributing to the blockchain (by solving these codes) with Ethereum, a cryptocurrency token similar to Bitcoin.

While the fact that the mining process would likely be occurring without NFTs may take some of the climate burden off of the digital art trade, it's not exactly encouraging.

After all, the takeaway is that a significant amount of carbon emissions would be burned no matter what. While some miners have tried to turn to clean energy solutions to minimize the impact of their mining, they are in the minority; Cambridge University's Centre for Alternative Finance found that over 60% of miners still rely on dirty-burning fuels like natural gas, oil, and coal.

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I don't think the energy transition provides an excuse to waste as much energy as we want. An obvious problem here is that [crypto] may be using green energy that we could have used to clean up the grid elsewhere.

Alex de Vries, founder of Digiconomist

What’s the solution?

De Vries argues that the best fix for the environmental impact of NFTs and other crypto-centric transactions would be to replace the mining mechanism entirely with a greener alternative. “It’s possible to completely eliminate the need for wasting energy this way,” he says. “In fact, some NFTs are issued on blockchains that have already made such a switch.”

McGill is confident that Ethereum can achieve this, stating that the roadmap that has been laid out to eliminate the mining process is “really promising” and could “almost completely eliminate the emissions we are seeing right now.”

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This would require ditching the old system for confirming transactions, known as "proof of work," and adopting a model called "proof of stake" in its place. Instead of relying on complicated cryptography and encryption, proof of stake requires users to stake their own shares of Ethereum in order to validate a transaction. Essentially, if miners put skin in the game, they will be incentivized to accurately validate the information.

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The blockchain that would result from a "proof of stake" model, requiring less energy consumption and lowering the barrier of entry for miners. The problem is that Ethereum has been promising this model for years, with no clear timeline for when it will actually be implemented.


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“My dream would be to see the Ethereum network step up and pay to offset their entire footprint until ETH2 actually comes out,” McGill says.

“Crypto is awash with cash right now, we could totally make that happen. Too much carbon has already been emitted by these networks, tons of money has been made, not nearly enough of that has gone to pro-climate initiatives.”

For now, though, the people fortunate enough to buy and sell NFTs will turn a profit, the miners enabling each transaction will turn a profit, and the planet will continue to pay the price.