NFTs and Climate Impact: Exploring the Connection

The art world is becoming highly polarized, and artists are struggling to understand the raging debate over non-fungible tokens or NFTs. NFTs are being hailed as the next horizon of digital artworks, praised by many as a method for artists to make money, and denounced by many as an earth-killing pollution problem.

The environmental effect of NFTs, on the other hand, has been called into doubt, and in times of rapidly changing climate, this has sparked even greater worry. Because several stages in the system have no established carbon footprint and there is little scientific peer-reviewed research on the issue, estimating the carbon footprint of minting an NFT is challenging.

A single Ethereum transaction has a carbon impact of 33.4 kg of CO2, according to Digiconomist, whereas an average transaction for NFTs has a carbon footprint of around 48 kg of CO2, according to artist and programmer Memo Akten. It is important to remember that every time an NFT is created or traded, it is a new transaction.

According to calculations, a single NFT trade has a carbon footprint more than 14 times that of mailing an art piece, which Quartz estimated to be 2.3 kg CO2. Notwithstanding the limitations in the estimates, this is sufficient to determine if such a large carbon footprint is appropriate for the practice of trading artworks.

Some artists shun NFTs since they believe that a single art transaction should not have such a large carbon footprint – a single Ethereum transaction, according to Digiconomist, is roughly comparable to 74,000 VISA transactions. Limiting flying or eliminating beef from your meals are examples of such decisions.

Yes, traveling and nutrition are important, but flying and consuming beef has a large carbon footprint when compared to many of their counterparts, so making just a few modifications may drastically lower your carbon footprint. Beef has roughly 10 times the carbon footprint of chicken, which is a smaller gap than the gap between an Ethereum transaction and mailing an artwork.

Considering this as an analogy, if you believe that moving from beef to chicken is a worthwhile compromise because of the emissions savings, you might feel the same way about eliminating NFTs and adhering to art paintings.

Ethereum is presently expected to use 44.94 terawatt-hours of electricity per year, which is equal to the yearly power usage of nations such as Qatar and Hungary. It emits around 21.35 metric tons of carbon dioxide per year, which is equivalent to Sudan's carbon footprint. Efforts to assess the environmental effect of mining and NFTs have given mixed findings, but researchers concur that the blockchain's cumulative carbon footprint is massive.

Where do they differ? Whether the emissions can be traced back to particular NFTs or the entire blockchain. Memo Akten, a digital artist, studied 18,000 NFTs and discovered that the typical NFT had a carbon footprint equal to even more than a month's worth of power use for the average European Union resident.

The enormous footprint is partly due to the numerous transactions associated with NFTs, such as minting, bidding, cancellations, sales, and ownership transfers. These emissions are expected to be ten times that of a typical Ethereum transaction.

When Lemercier placed six pieces of art on the Nifty Gateway platform in November 2020, he was ecstatic in seeing them sell out in less than 10 seconds. However, when the artist, who had been environmentally aware for years, inquired about his CO2 emissions and energy usage, he received no reply, prompting him to do his investigation.

"It turns out that my publication of six CryptoArt pieces utilized more power in 10 seconds than the entire studio consumed in the previous two years," he said on his blog. "This lack of openness effectively sabotaged two years of work."

Ethereum stated many years ago that it would abandon the POW paradigm in favor of a "proof of stake" (PoS) mechanism that pays users depending on how much bitcoin they currently own, decreasing computing work. Because "proof of stake has practically no emissions" because it doesn't require mining, the switch to "Ethereum 2.0" may cut NFT energy usage by 99 percent, according to McGill. However, this shift has yet to occur, and the community is beginning to question if it ever will.