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The NFT Environmental Costs as well as Impact Blog

Apr 28, 2022

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Buy, create the NFTs of your choice, sell them and more.

But there's also a serious price to these technologies. The environmental impact of NFTs, like for example, could be astronomical.

Then what is it that can be considered to cause NFTs detrimental to the environment? What are the implications of NFTs and changes in the environment? Below, we dig into this buzzword in search of the solution.

     What are the reasons why NFTs are bad for the Earth?

It consumes huge amounts of energy to run the transaction technology that underpins NFTs. Here's how the system works--and some of the most up-to-date estimates of the amount of power that is required.

The NFT Ecosystem

Ethereum is the most favored blockchain used today to facilitate NFT transactions. It is fully compatible with both cryptocurrency (its own currency is Ether or ETH, which is currently the most well-known crypto to facilitate NFT transactions) and smart contracts which are software programs that run themselves that monitor legally important transactions (including NFT purchases).

It is a part of the "proof-of-work" security system which is not energy efficient according to its design. The high energy consumption of crypto mining creates scarcity, and deters undesirable actors from participating in the process.

NFTs and the Environment NFTs and the Environment

Although there are some strategies being developed to cut back on emissions of carbon from cryptocurrencies such as Ether at the moment at the moment, it is still consuming a staggering quantity of energy, a large portion of which is generated by fossil fuels. Actually an internet-based resource discovered that Ethereum consumes more power than a number of countries.

NFT Pollution

Through a thorough analysis of over 18,000 transactions in the NFT market One artist Akten observed that an average NFT has a carbon footprint equal to 1 month's worth of use of electricity for the average UK resident (it's vital to keep in mind that this research has not been confirmed by institutions of science). A different artist to be noted, Beeple, estimated the cost of carbon offsets which aid in reducing carbon emissions from his works that are digital art is around $5,000.

NFTs along with NFTs as well as Climate Change

Then, what's the connection between NFT and the climate crisis? As with any other issue pertaining to environment-related effects, the position of the individual user, artists and the public is debating. There are some who think that the NFT ecosystem can exist independently of individual contributions--sort of like how the plane can take off no matter how many passengers there are on the plane. However, some critics highlight the strain that individual actions, when viewed collectively, could put on businesses as well as economies, which could ultimately lead to changes in the entire system.

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     NFT Pros and Cons

The answer to the question "Why are NFTs bad?" It's not a straight-line answer. There are many advantages and disadvantages of NFTs which are far more than can be addressed in a single piece. Below are a handful of the most well-known ones:

Pro: Re-democratizing art buying and selling process

Pro: An ongoing source of income for creators

Con: Are NFTs harmful for the Earth?

One of the drawbacks to the "pros and cons NFTs" debate which has been discussed before, is that the technology is extremely demanding of energy. There's some discussion over the extent of role of NFTs is for the overall emission of cryptocurrency; they probably account for only tiny fraction of general Ethereum transactions.

     What Are Blockchains making to help improve

Blockchain technology is currently changing. Both emerging and established ones are rethinking how distributed ledger technology and their native cryptos rely upon fossil fuels. These are just a few innovative ways that the innovators are working to limit the negative environmental effects of NFTs.

Proving Stake. Proof of the work

An option to cut down on the environmental cost associated with NFT is to look at its "proof-of-work" technology on the basis of which it's built. Another choice, "proof of stake," lets users sequester a portion of their cryptocurrency on a third-party platform to be able to confirm new transactions as well as modify the blockchain. This process guarantees that they are the right to "stake" in order to guarantee the authenticity of the ledger. Additionally, this theoretically eliminates the need for powerful machines to mine cryptocurrency.

The NBA's Top Shot, a marketplace that lets fans purchase NFTs for NBA highlights, makes use of this technique. The next edition of Ethereum, ETH2, which is believed to be to be released around 2022, is anticipated to use the proof of stake. There are other blockchains as well, for instance Tezos the open-source blockchain that utilizes the native cryptocurrency , Tez already runs on its consensus mechanism.

Green Energy Sources that Cut down on the Climate Change risks of NFT

Many examples show "clean crypto" operating. In Canada, for instance one company is working to convert oil waste into green energy that powers cryptocurrency mining. Within Texas there are numerous firms that are developing renewable-powered mines for cryptocurrency. It is possible to reduce the environmental impact of NFT art as they will help make the whole system more sustainable from the beginning.

     What else should be done?

While the above solutions are promising, they're only speculation. As blockchains, cryptocurrency, and NFTs remain relatively in the early stages of technologies. In order to reduce the environmental impact of NFT additional research, collaboration and continued advancement is essential.

Other studies and data analysis

To improve the energy intensive NFT environment, additional studies that quantify the effects of current systems--and predicts the ways in which new systems can be improved upon -- must be carried out. Sources like the Bitcoin Energy Consumption Index are a key part of this process.

Organizations studying the relationship of NFTs with Climate Change

Other initiatives such as that of the Crypto Climate Accord and The Blockchain to Climate Foundation call for collaboration, private sector buy-ins for cryptocurrency, in order to ensure that its transactions green. Collaboration efforts such as this would likely play a pivotal role in creating a sustainable future for NFTs and the other cryptocurrency-related products.

Innovative Innovations that Inspire NFTs and for the planet

Numerous companies are working to tackle the NFT sustainability challenge. From businesses that have developed Proof-of-Stake technologies to those working on novel methods of carbon offsets to NFTs to those building blockchain-based carbon neutral platforms, you can expect a sea change in the very near future. Certain studies indicate the negative effects of NFTs on the environment could be reduced significantly within one or two years.

     Weighting the NFT Cost of the Environmental Cost

When thinking about the NFT effect on environment, it's worth factoring in all the available information--including the foundational technologies that make NFTs bad for the environment to begin with.

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