The environmental impact of NFTs: are they harming the planet?

NFTs (Non-fungible tokens) are unique, nonduplicable digital tokens protected by blockchain technology and purchased via cryptocurrency. The popularity of this medium is increasingly growing and virtual artworks are being sold at exorbitant prices. Through the emergence of new technologies that simplify and improve the way art is bought and sold, there are always downsides and someone pays the consequences. In this case, the impact of NFT on the environment is not to be underestimated, however, solutions are already being planned. 

The Carbon Footprint

Before we begin, it is good to know that NFTs are not directly responsible for Ethereum’s increased carbon footprint. The system of securing an NFT is done through decentralization, which is a typical feature of Ethereum. This means that any person can verify the purchase and truthfulness of the ownership of an NFT, so that the entire system can be trusted. To make a digital object unique and ensure that it is not stolen or duplicated is possible at a cost. Blockchain technology, like that used for Ethereum, consumes a significant amount of power. Because when minting an Ethereum, to be used to purchase an NFT, different steps are taken to ascertain “ownership” from the seller and confirm the transaction. To make the system secure and certified, tests are required that require intense mathematical calculations and systems that consume electricity and release carbon dioxide.

The Environmental Impact

The environmental impact is due to the actual mining of the coin, which is an issue that occurs in all cryptocurrencies, and is not directly related to NFTs. A very small portion of all transactions performed with Ethereum are performed to purchase NFTs. On top of that, some people or companies have chosen to perform mining operations through sources from renewable energy or using the energy consumed in some other way (for home heating for example). Since Ethereum has been in circulation, plans are being explored to make this currency greener. The technology has been evolving to make it more energy efficient since its creation. Once improved, the footprint on carbon will decrease by 99%, making this the most efficient system ever. 

A new experiment: Eth2

Ethereum developers are working on a series of updates that will replace mining with staking. From the name Eth2, software will be used that validates the data of a transaction and stores it. In this case, it is no longer necessary to use computer power. The system is still under development and even though you can use it now, there is a risk of falling into theft or duplication of data if you go offline. With the new experiments, Ethereum could become a cryptocurrency ecosystem used for any kind of transaction and that would consume less amounts of energy than the most popular credit card payment systems. 

Crypto Art and global emission

Crypto art plays a tiny role on global emissions and a bigger change is needed. Artists themselves are the first to fight to defeat the problem of mining pollution and in a short time we could see significant changes that do not harm our planet. Big changes and new discoveries present another side of the coin and through study and research a solution has been found to make things better. Ethereum open source technology allows us to do this now, together and quickly.

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