NFTs and The Environment
Over 1,700 jurisdictions and municipalities around the world have declared a Climate Emergency. This means that the governments of over 1 billion people have officially accepted what scientists have been saying since 1979: that climate change exists, and that we have to do everything possible to stop human-caused global warming.
It also means that we’re now aware that a product (like an NFT) is only sustainable if making it doesn’t add carbon dioxide (CO₂) to the atmosphere, or if the amount of CO₂ removed from the atmosphere equals the amount released by making it. This is called being “carbon neutral”. Generally, the more energy it takes to make or move something, the more CO₂ gets released during its manufacture, and the larger its carbon footprint.
NFTs — along with other cryptocurrencies and blockchains in general — have been called out by the climate-conscious for leaving a carbon footprint that’s perhaps a bit too big for comfort.
Are NFTs Really Bad for the Environment?
In a nutshell? No, but the blockchain they’re stored on can be. To answer this question properly, we first have to unpack the difference between Proof of Work (PoW) and Proof of Stake (PoS) blockchains.
Proof of Work Blockchains
Blockchains are distributed public ledgers that record transactions, and the key difference between PoW and PoS blockchains lies in how they verify these transactions. PoW blockchains (like Bitcoin) confirm transactions are valid with advanced mathematical equations that are so difficult only powerful computers can solve them. Each equation is unique, which is why the network can confirm that the transaction on the blockchain is authentic.
Verifying every transaction on the blockchain in this way takes a huge amount of computing power — which translates into a lot of electricity and inflates the carbon footprint.
Proof of Stake Blockchains
In terms of carbon emissions, PoS blockchains have greened up the cryptocurrency space in the same way electric cars have revolutionised the automotive industry.
PoS doesn’t need to solve a large number of complex equations to verify every transaction on its blockchain. It still uses a cryptographic algorithm (complex mathematics), but what those equations are checking for is slightly different. This means it takes less processing power to initiate each transaction and validate data. It’s faster to run and has a significantly smaller carbon footprint because it uses less electricity to confirm each transaction.
Basically, just how much NFTs harm the environment is based on which blockchain they’re stored on. And if they use a Proof of Stake blockchain, they can have a carbon footprint that’s 2.4 million times smaller than a bitcoin transaction and be up to 306x more energy efficient than a typical visa transaction.
Momint Uses a Proof of Stake Blockchain
We take our environmental responsibility very seriously. This means that wherever possible, we’ll work to be carbon neutral. However, we also know that any new technology can take a little time to perfect itself, and the fact that it’s still iterating may not be a good enough reason to avoid it. In this case, we commit to being at the forefront of NFT technology because we believe in its power to transform the lives of digital artists and collectors for the better.
That’s why we built Momint around a Proof of Stake blockchain. Every NFT transaction still has a carbon footprint, but it’s far smaller than it would be on a Proof of Work blockchain (and even smaller than the footprint you create every time you swipe your Visa credit card). It’s not carbon neutral, but it’s getting there.