Are NFTs Bad for the Environment?

January 30, 2023

With the release of Bondee, the trending social app that lets you and your friends meet together virtually as cute avatars, this controversial statement sparked debates on social media:

“If you support NFTs, you're contributing to greenhouse gas emissions and harming the environment.”

But, do NFTs really have such a big effect on your carbon footprint? If you buy NFTs, does that mean you’re guilty of destroying Mother Earth?

To answer that, let’s examine the facts.

Ethereum was the first blockchain to feature NFTs, and to date, most popular NFT collections run on Ethereum. The problem is that until September 15, 2022, before an event known as The Merge happened, Ethereum used a consensus mechanism (a system the devices on the network use to add data to the blockchain) called Proof-of-Work (PoW).

This is how PoW works: miners (computers carrying out transactions on this network) would compete to be the first to solve complex mathematical equations. The first to unlock the solution gets the right to add the new block of data to the blockchain. Since multiple miners try to solve the same mathematical problem and the solution is so complex that it takes a lot of time and computing power to figure out, a lot of energy gets wasted each time someone makes a transaction on the blockchain.

For more information on PoW, check out our Introduction to Bitcoin course.

Analysts estimate that in a blockchain using Proof-of-Work, each NFT minted could release anywhere from 33 to 211 kgs of carbon dioxide to the environment. On average, carbon emissions at this level would be even more than what three trees could absorb from the atmosphere.

Everything changed last September 2022, when Ethereum switched to a more environmentally-friendly consensus mechanism called Proof-of-Stake. In this system, validators (computers carrying out transactions on this network) only need to stake or lock up tokens online, rather than invest in computers, to verify transactions. This way, with less duplication of resources, so much energy is saved.

In fact, according to estimates, Ethereum uses 99% less energy now than it did before The Merge. That means that NFTs running on this blockchain and other blockchains using energy-efficient mechanisms are much, much less harmful to the environment than they used to be.

What about NFTs on other blockchains?

The good news is that NFTs on Cardano, Tezos, Near, and other popular blockchain protocols are also relatively safe for the environment. Or at least, as environmentally friendly as any massive computer network can get. Let us not forget that everything we do that involves our devices—from watching videos to playing games on our phones— increases our carbon footprint.

For reference, a study concluded that one minute of using TikTok produces the equivalent of around 2.63 grams of carbon dioxide, and one minute on Instagram produces about 1.05 grams of Co2. Multiply that by how many hours an average user spends on social media daily and those figures go up fast.

So, are NFTs carbon neutral? No, they’re not. But do they cause massive harm to the environment in comparison to other digital activities? The answer is a firm no. As with every digital product, app, or asset, it’s up to us to exercise moderation if we truly want to make the Earth a better place.

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