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).