Could NFTs Be Costing The Planet?

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Cryptocurrency has become a bit more artistic with NFTs exploding in popularity over the last year.

People are making millions of dollars selling digital art online, and here in Australia the first ever NFT Christmas tree has been unveiled in Sydney.

But there’s concern about how NFTs could be impacting the environment, with some experts pointing out that there’s a massive carbon footprint attached to them.

Pls Remind Me What An NFT Is

In case you’ve totally missed what the hell NFTs are, the phrase NFT stands for non-fungible token.

The word ‘fungible’ means exchangeable, so ‘non-fungible’ means something is non-replaceable.

NFTs are basically unique collectible tokens that can take the form of pretty much anything digital, like art, music, or even a GIF.

And like Bitcoin, they use blockchain technology and are a form of cryptocurrency.

But NFTs are a bit more like baseball cards – each token has a different value, and they can’t be used to actually buy anything.

When someone buys an NFT, what they’re buying is a unique certificate of ownership.

One of the earliest attempts at using blockchain for something like this was a game called CyrptoKitties, where players could buy, breed, and sell virtual cats.

It took off in 2017 and, back then, rights to a single digital image – or in this case a virtual cat – was valued at around $60 US dollars.

NFTs have turned this on its head; earlier this year, Twitter CEO Jack Dorsey sold his first ever tweet as an NFT for $2.9 million dollars.

But NFTs Could Be Having An Impact On The Environment

Most NFTs are part of the Ethereum blockchain.

And Ethereum operates on a decentralised computer network that uses a lot of energy and generates millions of tons of carbon emissions.

Experts believe that the Ethereum platform uses about 48 kilowatt-hours of energy per transaction, which is roughly the equivalent amount of power that a conventional household uses over a day and a half.

Take this “Space Cat” NFT for example – yes, it is a GIF of a cat in a rocket heading to the Moon.

According to the website, the Space Cat’s carbon footprint is equivalent to an EU resident’s electricity usage for two whole months.

What Are People Saying?

Because NFTs have become so popular this year, questions are now being asked about the industry’s carbon footprint and who should be responsible for it.

Some people are pointing the finger at whoever is creating and buying NFTs for driving the market.

One online marketplace for digital artists, ArtStation, was planning to launch a platform for NFTs.

But within hours of announcing, it received heaps of backlash from advocates and artists, who called NFTs “an ecological nightmare pyramid scheme”, and crypto art environmentally unethical.

One person even tweeted about ArtStation’s plans to offset emissions, likening it to setting a house on fire then placing a single potted plant on the burned property as “compensation”.

ArtStation ended up stopping its project.

But the NFT industry maintains that it isn’t really responsible for Ethereum’s carbon emissions because Ethereum would be running anyway, with or without NFTs.

Some NFT enthusiasts think that the increase in popularity is a good thing, because it could force the industry to shift to renewable energy sources.

But until that happens, NFTs will remain one of the most carbon intensive artworks to date.