Is NFT energy consumption really that big? Are NFTs bad for the environment?
The debate around NFT energy consumption raged most wildly during and immediately after JPEG Summer.
At the time, Ethereum functioned on a proof-of-work protocol. The annual ecological footprint of Ethereum was calculated to equal that of Hong Kong. NFT environmental impact calculations were not happy.
Since then, however, the infamous Merge moved Ethereum to a proof-of-stake protocol, reducing its carbon output (and NFT energy consumption) by >99%.
Now minting an NFT is ecologically on par with 1–3 Google searches.
Since the Merge, no significant NFT blockchain has used the proof-of-work model or any substantially similar model, so the total NFT environmental impact is lower than that of physical art.
This, however, does not mean that every blockchain is environmentally friendly. Notably, Bitcoin mining remains environmentally detrimental. NFTs do get minted on Layer-2 Bitcoin protocols, but they comprise a diminishingly small percentage of the total NFT ecosystem.
I’ll leave you with this, an optimistic look at web3’s future to not only approach carbon neutrality but to turn things around toward a more carbon-negative future.
Thanks to the immutability and transparency of blockchain, an environmentally friendly blockchain ecosystem could go a long way toward solving some of the world’s most intractable environmental issues.
Here are a few of the use cases and projects for building a more sustainable future with blockchain technology.
- Creating a more transparent supply chain to track products from the producer to the store to prevent waste, inefficiency, fraud, and unethical practices. (FoodTrax and Provenance)
- Lending compute power to underserved users in developing countries. (Golem Network)
- Using crypto rewards to track recycling and protect the environment from pollution and unsustainable disposal practices. (Reflow, REcycle Coin, RecycleToCoin, and Plastic Bank)
- Energy sharing to eliminate energy storage and loss. (SunContract)
- Renewable energy investments for citizen investors (Ecochain and Sun Exchange)
- Tracking donations and actions for greater accountability at non-profits. (Bitgive and BitHope)