Why Do NFTs Consume So Much Energy?
|— NFTs are taking over the arts and entertainment industry. Buyers are flocking to online auction sites to place the highest bid on rare collectibles. |
— However, beneath the surface, there’s more than meets the eye. Climate activists are sounding the alarm on the carbon footprint of NFTs.
— But NFTs themselves are not exactly the culprit. They are minted and traded on Ethereum’s PoW (proof of work) blockchain, which uses up incredible amounts of energy.
— There is a silver lining, since climate activists, as well as those in the NFT community have been pushing for eco-friendly solutions. More and more NFTs are being minted on PoS (proof of stake) blockchain networks which offer energy-efficient alternatives.
Ever wondered why do NFTs consume so much energy? we’ve got you covered.
A new age of digital entertainment is unfolding. It is the age when a piece from a digital art collection can sell for almost $70 million. Or a video clip of Lebron James dunking fetches over $200,000. It is a culture of possibly owning a piece of history, without having to leave your sofa. So, while we have been doing our due diligence, trying to figure out what exactly is going on, we kind of dug up some dirt.
Welcome to the flip side of NFTs.
Coming in hot
NFTs (non-fungible tokens) are the hottest topic in the cryptoverse at the moment. Nevermind that, NFTs are the hottest topic anywhere. Unfortunately, they are not the most eco-friendly art one could venture to collect. In fact, the very process of minting even a single NFT requires a hefty amount of energy consumption. So it’s no wonder that they have fallen victim to scrutiny from climate change activists.
But, what if I told you that these emissions are happening anyway? For example, with commercial air travel, flights are going to leave whether you book tickets, or not. With NFTs, the blockchain networks that they are minted on, are going to run whether you mint an NFT or not.
NFTs are not the problem
Let’s put this into a real-world scenario. Prolific French artist, Joanie Lemercier, minted and sold 6 NFTs on Nifty Gateway before realizing the true cost of the process. It took no time at all for his fans to send tweets issuing a rather bleak dose of reality: the sale of his NFTs came close to two years of energy use in his very own studio.
Remember, NFTs themselves are not the culprit. Ethereum processes over 1 million transactions per day, so it’s safe to say that its blockchain is not exactly energy efficient. In terms of scalability, one typical Ethereum transaction could power your house for a day, maybe half a day, if you are eco-friendly.
The problem with Ethereum’s PoW protocol is that it is consuming way more resources than it returns. Its mining process is a web of mathematical computations that need to be solved and it’s not the little guy that’s solving them. In fact, there are enormous computer warehouses all over the world dedicated to solving these computations. Once they do, they cash in on the rewards and move on to the next computation.
Ethereum 2.0: A new hope
The good news is, the devs at Ethereum have been working night and day for the last six years on an alternative to the PoW protocol. The grand reveal…Ethereum 2.0. The entire crypto community has been eagerly anticipating its arrival. The truth is nobody in crypto wants to waste energy. PoW is an outdated algorithm but it has been the only algorithm in place to allow us to have a taste of financial freedom and to experience true transparency.
On that note, Eth 2.0 is a completely overhauled algorithm which will essentially be “99.9% energy efficient” according to Danny Ryan, who is the Lead Coordinator for the Eth 2.0 rollout.
Not bad, right? This will be the new backbone of Ethereum and it comes with its own algorithm, PoS (proof of stake.)
Instead of millions of computers competing to process the same transaction, the new PoS algorithm randomly picks just one to do the job. Who would have thought? The shift to Ethereum 2.0 is already underway but it will take some time before it can be fully integrated into the existing network.
Ethereum 2.0 will set the standard for a new, sustainable, eco-friendly future not just for NFTs but for decentralized finance as a whole. And it’s right around the corner.
NFT platforms for the earth-lover
The future for NFTs is brighter than ever.
Thankfully, several proof of stake NFT platforms are already paving the way for eco-friendly adaptation. The highly popular NFT Showroom is built on top of Hive network. Also, Atomic Hub currently lists over 11 Million NFTs, while Enjin’s Efinity will mint NFTs on Polkadot’s PoS blockchain.
This is not by any means an exhaustive list of eco-friendly NFT platforms. More and more are popping up every month, offering pleasing alternatives for both NFT fanatics and climate activists across the universe.
After all, we only have one Planet Earth, and we’re sure she’s quite happy to hear the news.