Environmental Impact Of NFTs: Are NFTs Bad for Our Environment?

NFTs are an exciting new way to prove ownership over digital assets, and they’re good at it. But while artists and collectors are celebrating their ability to protect the value of digital work, NFTs have drawn criticism for an uncomfortably large carbon footprint. Asking whether NFTs are “green enough to be good” isn’t a question with a simple answer — but it is an important one. Let’s take a closer look at the question on everyone’s mind: are NFTs bad for the environment?

Environmental Impact Of NFTs: Are NFTs Bad for Our Environment?

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.

Other posts you may enjoy

What is a 'Buyout' for Solar Certificates?

Suncash has been making waves with its innovative solar projects. Let's dive into the prospect of Buyouts on Projects and what that could look like for you.

4 min read

Momint Partners with Cybera to Prevent and Respond to Cybercrime

We can now perform advanced customer due diligence in order to wipe out any attempts at fraud on the Momint marketplace with CYBERA.

2 min read

Can You Earn While Funding Solar Power?

Solar crowdfunding solutions and digital assets allow just about anyone to invest in solar while earning a passive income.

52 min read

The Future of Royalties in NFTs: Should NFT Royalties Exist?

Royalties are a cornerstone of the growth of NFTs, but what future do they have in various ecosystems?

6 min read

portal to metaverse image

Want to learn more
about Web3?

Understand the crucial concepts that will be shaping our world over the next decade, from early internet to NFTs, from modems to metamask from Web2 to Web3.

Sign Up on Momint