NFTs are warming the planet – and not enough people know about it

As NFTs become more and more popular, their carbon footprint grows. Their blockchain technology consumes huge amounts of energy, but a lot of people are unaware of the scale of this issue.  

About a month ago, the first ever tweet of Twitter’s founder, Jack Dorsey, was sold for 2.9 million dollars. You might wonder, why would someone pay so much money for a tweet? But also, how is it even possible for a tweet to be sold? Two other examples of similar sales are NBA-licensed clips of Lebron James selling for 208.000 dollars and a digital mosaic by the artist Beeple selling for a whopping 69.3 million dollars at the first digital-only art auction at auction house Christie’s. How is it possible for these digital items to be sold for so much money? And why is their sale such an environmental issue? The key are non-fungible tokens (NFTs).

What are NFTs?

NFTs are unique digital certificates that state who has ownership over certain digital items. These items can include basically anything digital, for example drawings and songs, but also animated GIFs, items in a video game, or tweets. NFTs can either be unique one-offs or limited edition copies, comparable to a painting versus collectable trading cards in real life. They are used in the CryptoArt market and their sales have surged over the past year, perhaps in part due to the Covid19 pandemic.

One of the interesting things about the phenomenon of CryptoArt is that, unlike with physical art, everyone can own the exact same item. For example, anyone can download a GIF and use it, whereas only one person can own an actual Rembrandt (others might decorate their walls with a poster or picture of it). NFTs are a way to create scarcity in the digital art world, like the one we know for the physical one, and allows for ownership to be claimed.

Similar to cryptocurrencies like Bitcoin, CryptoArt NFTs make use of blockchain technology. The consensus algorithm used for Bitcoin, Ethereum (popular for CryptoArt NFTs) and some other cryptocurrencies is Proof-of-Work (PoW). This algorithm is designed to be inefficient and computation intensive, as a way to make the process more secure. This leads to the big problem related to NFTs, which is their enormous energy consumption.

NFTs’ huge carbon footprint

Very little was known about the energy consumption and related carbon footprint of NFTs. A technology artist called Memo Akten started investigating and found that absolutely no information was given anywhere regarding this topic. Since he believed this lack of transparency was unacceptable if more people were to learn about the environmental issues surrounding NFTs, he wrote an article and created the website cryptoart.wtf. There, he calculates and shows the carbon footprint of CryptoArt NFTs as a result of PoW-based blockchain methods. Akten took the website down a month ago, according to a message by him because the information it provided was being used for abuse as harassment. But in his article, he gives an overview of his findings. He analyzed about 80000 transactions relating to roughly 18000 NFTs on the CryptoArt NFT market site SuperRare. Many more CryptoArt NFT platforms exist, and SuperRare only trades unique one-off NFTs, not limited edition copies. These editions have even bigger carbon footprints, since the same artwork is sold multiple times and thus more NFT transactions take place. Anyway, let’s take a look at the numbers for the transactions on SuperRare.

The energy usage and CO2 emissions (and their equivalents) of a single NFT and of all 18159 NFTs on the platform SuperRare that Akten analysed. Source: The Unreasonable Ecological Cost of #CryptoArt (Part 1)

As can be seen from these figures, one single-edition NFT consumes 340 kWh of energy and emits 211 kg of CO2. This is equivalent to, amongst others, an EU resident’s electricity consumption for a whole month. The footprint of all the 18159 NFTs on SuperRare that Akten investigated together is more than 6 GWh, and more than 3.8 Mt CO2, equivalent to an EU resident’s electricity consumption for two thousand years.

Important to mention is that these numbers only include the energy consumed by using a PoW-based blockchain. The energy consumptions of the production of the actual artwork, of storing the work online, of the website itself, and of the computers used during the whole process are not included. And as I mentioned before, this is only one of many NFT CryptoArt platforms and one that only sells unique one-off NFTs, not the even more energy-consuming editions.

It is safe to say the environmental costs of NFTs are huge.  

So what can be done?

In another article by Memo Akten, he lists ways for CryptoArt to become more sustainable. Firstly, he mentions that he hopes platforms such as Ethereum will themselves become more transparent and provide their users with more information about the sustainability issues surrounding NFTs. Secondly, he encourages artists to take their business to platforms that provide sustainable alternatives. Currently, these platforms are still smaller and thus elicit less sales, but as demand for more sustainable platforms increases, they can be developed further and grow.

The key to these more sustainable platforms is that they use a different blockchain algorithm than PoW. One example is the Proof-of-Stake (PoS) algorithm, which can cut energy consumption by more than a hundredfold. Ethereum is working on moving from a PoW to a PoS system, which would require only one percent of the energy currently consumed. This sounds like hopeful news, but since announcing their idea several years ago, the company has been vague on when the change will actually be implemented.

Right now, it is very important to raise awareness about the environmental burden of NFTs, since too many people are unaware of the environmental impact their NFT sale has.

All in all, NFTs are a crazy phenomenon whose recent surge in sales is very bad news for the climate, and more people need to know about their huge carbon footprint. I think this tweet by Limericking sums it up quite nicely (but please do not try to buy it).

13 thoughts on “NFTs are warming the planet – and not enough people know about it

  1. Super interesting blog post! I had no clue that these cryptocurrencies had such an enormous carbon footprint. Correct me if I’m wrong, but as I understand it, the energy consumption comes from the blockchain technology behind cryptocurrencies that is very energy-intensive, so not the NFTs themselves, right? So even if we are to abandon NFTs, Eutherium in this case will continue to exist and contribute to carbon emissions. Or do you think that the growing demand for digital art is such a major contributor to the use of the technologies, that besides using more sustainable blockchains, it is also necessary to restrict the use of these crypto art collectibles?

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  2. Thanks for this super interesting blog! I never knew practices like these took up so much energy. I was just wondering whether you knew if there is a way to make companies like Ethereum switch from a PoW to a PoS system? Can they be forced to do so or does this have to be based on an inherent motivation to make their CryptoArt more sustainable? Also, if PoW is using such an insane amount of energy, wouldn’t the PoS systems also still use quite a bit? So, is cutting the energy usage by switching to PoS even enough?

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  3. This was a very interesting blog! I’d heard about the big environmental impact of cryptocurrencies, but I’d never known what could be done about it. I’m familiar with the Proof-of-Work concept of cryptocurrencies, but I was wondering what exactly a Proof-of-Stake algorithm would entail? I know the work required in Proof-of-Work makes sure that not too many cryptocoins are made, but what exactly are the “stakes” in Proof-of-Stake? Also, on ethereum’s website (https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/), they state Proof-of-Stake algorithms would have a lower barrier of entry. Do you think this could make the world of cryptocurrency and NFT’s more accessible to all, and would that be a good thing?

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  4. Great post, I think this topic is particularly interesting as cryptocurrency, NFTs and blockchain technology is still in its early phases and companies are quickly developing new technologies. I’m going to introduce an alternative perspective to the conversation but firstly, I would like to delve a bit deeper into what makes NFTs polluting. The technology behind NFTs is called blockchain technology, as Noor said, the culprit is thus the technology used to confirm these NFT transactions which, at the moment is either Proof of Work, or Proof of Staking. However, an important aspect which wasn’t mentioned in your blog post, is that blockchain technology provides an alternative means of trading by removing the need of a third party member to confirm a transaction (like a bank would). For this reason, cryptocurrency is actually a monetary system, and its energy use should thus be compared to the energy that banks consume. Most importantly, cryptocurrency offer people a decentralized monetary system, which is not the case with banks (which have done a fair share of environmental damage, not to mentioned the social and economic havoc reeked by banks). Consequently, banks are slowly beginning integrating cryptocurrency into their system, as they are afraid of becoming obsolete. I’m all with you regarding using methods which consume less energy, though I think that the idea of a decentralized monetary system is one to consider. Proof of Staking already loses some of that aspect as participants with big stakes have a higher probability of confirming the blockchain and thus earning more cryptocurrency, perpetuating wealth. That being said, the technology is still new and there is tons of room for improvement!

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  5. Thank you for sharing this well-written and informative post, I had no idea about this!

    This again begs the question of why are consumers not aware of the huge environmental impact of NFTs and cryptocurrencies like Bitcoin? And if they are, would an increase in awareness change consumer behavior? Shouldn’t the company be responsible for disclosing such information to the consumer? The website of Bitcoin, which also uses a PoW system, mentions nothing about this, even under the ‘some things you need to know’ tab. I also couldn’t find any information about Bitcoin moving to PoS, unlike Eutherium. Surely, if this system is so energy-intensive shouldn’t companies like Bitcoin at least offset their emissions or switch to more renewable forms of energy? Very recently, Elon Musk suspended bitcoin transactions for Tesla precisely because of the environmental impact of Bitcoin, maybe this will put pressure on Bitcoin to take the necessary steps to minimize its carbon footprint.

    It is also interesting to think why Elon Musk was the first to criticize Bitcoin and not governments. Governments could have surely used the environmental argument against cryptocurrencies, like Bitcoin, precisely because they pose such a threat to the current monetary system because of their decentralized nature. Instead, they have opted to jump on the bandwagon of cryptocurrencies (Govcoin).

    Finally, in line with Rosalie’s comment, do you it is enough for companies that supply cryptocurrencies and NFTs to move to a PoS system, or should consumers of such technologies (cryptocurrencies, NFTs or Crypto art) have to pay an additional carbon fee, similar to flying? Whose responsibility is it? Only the companies or also the consumers? What about the societal benefits attached with such technologies, is the societal benefit a sufficient trade-off?

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  6. Hey Vivian, thank you for your interesting blog post! It got me thinking about how exactly these emissions are generated. If I understand it correctly, it is because the NFTs (along with the rest of the internet) are all part of the ‘cloud’, which, although the name might suggest it, is actually a very tangible object in the form of servers in data centers (such as those in Science Park). In order to power and cool these servers, incredible amounts of energy are used (according to one paper, up to 2% of global emissions, which is about the same as the global aviation sector) (Vereecken et al., 2011:https://biblio.ugent.be/publication/1965588).
    However, many companies like Facebook or Google have or will in the next decade replace their data centers by much more efficient and clean ones (Google says their servers are now completely run on renewable energy:https://www.datacenterknowledge.com/energy/new-google-cloud-data-show-how-green-its-global-data-center-regions-are). Even more, as most are increasingly becoming aware of the very tangible, real-life impacts the often intangible and abstract concept of the internet can have, much more time, research and money is being dedicated to increasing the efficiency of these data centers. According to the IEA, these more efficient data centers are projected to overtake traditional ones within the decade (https://www.iea.org/reports/tracking-buildings).
    So I was wondering to what extent this issue will still exist in the future if data centers become more efficient and the technologies for these NFTs largely switch to PoS, for instance. What do you think? Maybe I’m being a bit too optimistic!

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  7. Hi Noor, thank you for your comment! As Ethereum states on their website (https://ethereum.org/en/) “Ethereum is the community-run technology powering the cryptocurrency, ether (ETH) and thousands of decentralized applications.” This means that NFT transactions are only one part of all the different applications Ethereum supports. And as you mention, the energy consumption relating to NFTs comes from the blockchain technology behind them (the one used by Ethereum) being very energy-intensive, not the NFTs themselves. Therefore, indeed, Etherium will continue to exist and contribute to carbon emissions even if we were to ban NFTs completely (although its emissions would be lowered somewhat). I am not sure how big NFT’s share in Ethereum’s emissions is, but I do not think the solution is to ban NFTs of CryptoArt completely, but rather to make companies switch to more sustainable blockchain technologies that use less energy.

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  8. Hi Rosalie, thanks for your comment! While I was writing my blog post I remember reading in a source somewhere (I am unable to find it again at the moment) that a tricky thing about forcing companies like Ethereum to switch their blockchain technology (so PoW to PoS, for example) is that they are big, multinational companies that are active in many different countries. Therefore, a similar problem as with other environmental regulations can occur, where the companies simply move to countries where the legislations do allow them to use a certain technology. So I would personally think that unless countries work together and all implement legislation that forces Ethereum and similar companies to switch their blockchain technologies to more sustainable alternatives, it will be very difficult to make them change and it will have to come from inherent motivation. But if you have any additional thoughts on this, please let me know!
    To answer your second question: as I mentioned in my post, the energy usage of Ethereum would be cut back more than a hundredfold by using PoS. This is such a significant difference that switching to PoS is at least a good first step. And since the involved technologies are still evolving at a rapid pace, I can imagine even more sustainable alternatives will become available in the future.

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  9. Hi Johanna, thank you for your comment! One of the sources I read while writing my blog (https://www.theverge.com/2021/3/15/22328203/nft-cryptoart-ethereum-blockchain-climate-change) describes PoS as follows: “[…] instead of having to pay for huge amounts of electricity to enter the game, they instead have to lock up some of their own cryptocurrency tokens in the network to “prove” they’ve got a “stake” in keeping the ledger accurate. If they get caught doing anything fishy, they’ll be penalized by losing those tokens. That gets rid of the need for computers to solve complex puzzles, which, in turn, gets rid of emissions” I hope that clarifies it for you!

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  10. Hi Amedeo, thank you for your comment! This is a valuable contribution that I indeed did not cover in my blog post. I think there are different pros and cons with the different blockchain technologies (PoW vs PoS), and I also agree that PoS is still very much under development and thus that improvements might still be made in the future!

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  11. Hi Alexia, thanks for your comment and contribution! I think you mention some very interesting and important points. Regarding your questions at the end, I think these are some of the core questions regarding cryptocurrencies that could be extensively debated. On the one hand, I think an additional carbon fee would be a good idea, but on the other hand I think it would diminish or make less accessible to all some of the benefits cryptocurrencies provide (as Amedeo explained, they provide a decentralized monetary system).

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  12. Hi Nicky, thanks for your comment! I do agree that this provides hope for the future. A combination of needing less energy and the use of much more efficient data centers seems like a golden solution. I think we will have to see how the technologies develop. I also think the energy usage by cryptocurrencies, CryptoArt, etc. will still grow in the near future, due to the increased popularity we have seen over the last few years and still see now.

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  13. Thank you for this super interesting blogpost.

    I agree that a big issue is the lack of awareness of the actual environmental impact of NFTs among the artists. Of course these issues apply to energy intensive cryptocurrencies (especially Bitcoin) in general, but it becomes especially problematic because making and selling NFTs has become such a big internet trend. More and more creators pile onto the hype, blowing it completely out of proportion to its actual use. Most likely very few of them take the time to understand the devastating impact.

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