You may have heard something about non-fungible tokens (NFTs) and how they impact the environment. Even though NFTs themselves do not cause any environmental impact, the impact on our climate is linked to how an NFT is produced.
The way that NFTs are created is highly energy-intensive. Most NFTs are minted using the proof-of-work operating method, which uses large amounts of electricity. Any energy-intensive process, crypto-related or otherwise, can exacerbate climate change by adding to the atmosphere’s carbon dioxide emissions. However, there are other more environment-friendly ways to mint NFTs, in particular, methods using proof-of-stake.
Minting an NFT doesn't have to use vast amounts of energy. Keep reading to understand more about how NFT production consumes energy, and learn the options available to acquire NFTs without harming the environment.
NFTs themselves do not impact the environment, but how they are minted can have substantial environmental consequences. Let's take a look at how NFTs using proof-of-work are generated, to understand how their production uses so much energy.

You may be wondering exactly how the mining process consumes energy. Only miners with the most computing power are likely to succeed at solving the complex math problems the fastest, meaning that miners must operate a large quantity of computing hardware—and use a lot of electricity. A worldwide network of miners is competing to validate blocks of transactions, including NFT transactions, requiring every participating miner to extensively consume electricity—even though only one miner is selected to validate each new block of transactions.
Every transaction on the Ethereum proof-of-work platform, including every NFT transaction, uses more than 260 kilowatt-hours of electricity—equivalent to the electricity used by an average U.S. household over 9.05 days.

A single NFT transaction on the Ethereum platform emits almost 150 kilograms of carbon dioxide, equivalent to 331,056 Visa transactions or 24,895 hours of watching YouTube..

Minting or transferring an NFT is usually energy intensive, but does not need to be. Blockchain platforms using the proof-of-stake operating method can generate NFTs without excessively using electricity and negatively impacting the environment.
The proof-of-stake method uses less energy than proof-of-work because it does not require the extensive use of computing hardware. Whereas miners participating in a proof-of-work blockchain network are motivated to consume electricity in attempt to successfully mine a block, validators contributing to a proof-of-stake blockchain are obligated to stake—agree to not trade or sell—their cryptocurrency holdings. Implementing a staking requirement for blockchain validators is way to secure a blockchain without requiring the network's participants to excessively consume energy.
NFTs, in other creative ways, can be less impactful to the environment. Here are some options:
If you want to buy an NFT without causing harm to the environment, then you have several options for purchasing the non-fungible token. Each of these blockchain platforms uses proof-of-stake and supports the creation and exchange of NFTs:
The Ethereum blockchain is about to become less of an energy hog. Ethereum—which currently supports the majority of NFT transactions—is gradually transitioning to using the proof-of-stake operating method. The official switch or "merge" is planned to take effect in Q2 2022, according to ethereum.org.

Once the merge is complete, the expected energy consumption for a proof-of-stake Ethereum transaction should be the equivalent of 20 minutes of television.
If you care about fighting climate change but want to invest in NFTs, then you might feel that those two objectives are at odds. You can protect the environment and still purchase an NFT, but to avoid using almost nine days' worth of electricity, you can't purchase just any NFT.
If you are committed to aligning your investment portfolio with your stance on climate change, then aim to invest only in NFTs that are generated using the proof-of-stake consensus method. While that currently limits your purchase options, the limitation is likely only temporary. After the Ethereum platform completes its transition to proof of stake, then environmentalists can buy NFTs using Ether (ETH) with a clear conscience.
It's when an NFT is minted at an NFT marketplace using an energy-intensive method, like proof-of-method, the environment can experience an impact, like an increased carbon footprint. NFTs that are minted using proof-of-stake are designed to limit harm to the environment.
Minting an NFT on the Ethereum platform uses more than 260 kilowatt-hours of electricity—the same amount of power that an average U.S. household uses in about 9.05 days.
But once Ethereum switches from proof-of-work to proof-of-stake, the energy consumption is predicted to drop 99.95% or to about 20 minutes of television.
Investors who prioritize environmental, social, and governance (ESG) issues can still buy NFTs. Any NFT that is minted using the proof-of-stake method can potentially be considered suitable for an ESG investor's portfolio.
ethereum.org. "Proof-of-work (PoW)."
OpenSea. "Which Blockchains Does OpenSea Support?"
Digiconomist. "Ethereum Energy Consumption Index."
ethereum.org. "Proof-of-stake (PoS)."
Solana. "Ecosystem," Search Projects, Enter Marketplace.
Algorand. "Art and NFTs."
Cardano. "Ouroboros."
Galaxy of Art. "Home Page."
CNFT.IO. "Home Page."
Rarible. "Meet Rarible."
Tezos. "What is an NFT?"
etheruem.org. "The Merge."
Ethereum Foundation. "Ethereum's Energy Usage Will Soon Decrease By ~99.95%."
Cryptocurrency
Cryptocurrency
Bitcoin
Bitcoin
Bitcoin
Strategy & Education
Investopedia uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners.

source