The Hidden Costs Of NFTs and their Ecological Impact

The ecological impact of non-fungible tokens (NFTs) has come under scrutiny from industry experts and artists due to growing awareness of environmental harm and climate change caused by technological advancement.

Although these digital assets have increased dramatically over the past year, it is still too early to gather reliable data to evaluate the environmental dangers of NFTs. Even while some numbers are emerging, there is no verification of this information by independent specialists, and we can not trust it.

Blockchain-based nonfungible token technology creates unique and one-of-a-kind digital assets. Digitally created images, videos, and musical works can be copied indefinitely, but blockchain smart contracts ensure that one piece of art or tape, for example, is the only one.

Additionally, because the technology enables transactions in a trustless environment, there is no need for third parties to confirm the user’s identity.

These factors give NFTs value and are the driving force for their expansion into various industries, particularly the arts. Artists that have taken multiple steps to fight climate change and lessen their NFT carbon footprint have likewise made their environmental impact a top issue.

Is NFTs Toxic To The Environment?

Digital artist Beeple, who attracted a staggering $69 million offer for his piece “Everydays: The First 5000 Days” at Christie’s, believes that NFTs will have a more sustainable future and has promised that his works would be carbon neutral. He believes that by investing some of his money in renewable energy, environmental conservation, and the development of CO2 emission-reducing technology, he can offset the emissions from his NFTs.

People may determine that he has to give $5000 to offset his environmental impact to balance the emissions from one of his collections using a straightforward tool like Offsetra to assist artists in calculating their footprint. To sell carbon-neutral NFTs and earn money for the Open Earth Foundation, Beeple and other well-known musicians agreed. The nonprofit company promotes sustainable

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These particular funds helped advance blockchain technology for environmental accountability. Each artist and piece of art earned 60 carbon offsets, which promised to make up for their NFT footprint and have a net-positive influence on the climate.

The Carbon Footprint Of An NFT

While it’s difficult to determine the ecological cost of cryptographic art with absolute certainty, various approximations can help us get a general notion of the carbon footprint of an NFT. For instance, a single-edition piece of art on Ethereum weighs 220 pounds (100 kg) of CO2, which is equal to a one-hour trip.

We can trace the effects of technology on the environment to the industrial revolution when new manufacturing methods were made possible by technical development. As a result of this development, environmental harm increased.

Large volumes of data are stored, processed, or distributed remotely using data centres, which are networks of networked computers used by companies like Google and Amazon.

One of these data centres processes our information when we send an email or a WhatsApp message, which requires a lot of energy to run well and to keep the equipment cool.

Data centres meet 1% of the world’s energy demand. Boosted internet use during the epidemic is thought to have increased emissions by up to 3.2 million metric tons of carbon dioxide equivalent.

Another issue with potentially adverse effects on the environment is cryptocurrency mining. Its products are comparable to those of data centres. Even though more information has recently been available, particularly regarding Bitcoin mining, it is still impossible to determine the precise environmental impact of blockchain technology because it depends on various factors.

Blockchain technology driven by a proof-of-work (PoW) consensus method and proof-of-stake (PoS), for example, differ significantly from one another.

Based on the proof-of-work mining method, most NFTs are traded and stored in the Ethereum network. Climate scientists have started discussing the environmental effects of NFTs because PoW is the consensus algorithm type that uses the most energy.

Due to its second-highest level of stability and dependability after Bitcoin, digital artists choose Ethereum for the sale of their works of digital art. Additionally, its design used smart contracts to transact data other than cryptocurrency transactions, making it a desirable platform for various uses.

How Harmful Are The NFTs Stored On Ethereum?

According to reports, Ethereum uses about 44.94 terawatt hours of electricity annually, comparable to those used by countries like Hungary and Qatar. Equal to Sudan’s carbon footprint, it contributes approximately 21.35 metric tons of carbon dioxide to the atmosphere.

Ether (ETH) enables every Ethereum transaction as it serves as a gas, with the blockchain recording the transaction. The gas percentage varies based on the volume of transaction data, as does the emission impact. Due to the numerous transactions involved in their production, such as coinage, bidding, trading, and ownership transfer, NFTs are data-heavy digital goods. Transaction transparency makes it simple to evaluate an NFT’s footprint.

What is in question is whether or not NFTs have a significant impact on the emissions produced by Ethereum mining. NFTs require unquestionably more energy than a straightforward Ethereum money transfer, but Ethereum mining was already active and damaging the environment before creators developed NFTs.

On the other side, if more people produced, traded, and stored NFTs, more energy-intensive transactions would need to be made, resulting in more carbon emissions. It is difficult to determine how much NFTs harm the environment and Ethereum transactions.

How To Improve NFTs’ Carbon Print

By creating systems on layer two built on top of the current blockchain, Ethereum developers might cut expenses and carbon emissions. These systems have the potential to save a significant amount of energy because all transactions take place off-chain, eventually replacing the energy-inefficient proof-of-work mechanism.

Like the Lightning Network, which is widely regarded as Bitcoin’s payment system and is a protocol built atop layer two of the blockchain, since it does not become reliant on the base chain’s proof-of-work consensus algorithm, it is scalable and ecologically friendly.

People or groups interested in trading NFTs might create a second layer channel, similar to the Lightning Network procedure, and conduct almost unlimited trading until they are prepared to settle all outstanding transactions back on the PoW blockchain foundation layer or layer one. With this process, we can avoid data-intensive transactions that demand a lot of energy instead of bombarding the blockchain with unlimited transactions.


It is not advisable to rely solely on renewable energy sources as they have not yet completely replaced the infrastructure used to generate electricity. The energy produced by renewable sources is still exceedingly rare and valuable, according to climate experts and opponents of blockchain technology and cryptocurrencies. It may be used for more essential purposes like heating and lighting.

Kolade Elusanmi

As a cryptocurrency and digital assets writer, I am knowledgeable about the latest developments in the world of digital currencies and their impact on the global economy. I also have a deep understanding of the various types of gift cards and their use in the modern retail landscape. With my expertise, I strive to provide informative and insightful articles that help my readers stay up-to-date on the latest trends and issues in these dynamic fields. I hope you enjoy my writing.

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