Are NFTs Bad For The Environment? (Not Anymore, Here’s Why)

Some NFTs are bad for the environment, but not all of them.

As NFTs continue to climb in popularity, as does the concern for the effects many NFTs have on the environment. With this exponential growth, many people are wondering: Are NFTs bad for the environment?

NFTs use to be bad for the environment when Ethereum used a proof-of-work consensus. More recently, the popular NFT blockchain merged to use a proof-of-stake mechanism, reducing its total energy consumption by nearly 99%

There is a lot to consider when talking about a complicated subject like an NFT’s effect on the environment. This article serves as your guide to asking the right questions and curating honest answers so that you can decide if NFTs are right for you.

Are NFTs Bad for the Environment?

In general, NFTs aren’t good for the environment per se, but that’s not to say that all NFTs are bad for the environment. Generally, when someone refers to NFTs as being bad for the environment, they are likely talking about the “old” Ethereum blockchain.

NFTs are bad for the environment because operators of mining rigs use several computers to solve complex computations.

The Ethereum blockchain is the most trusted and used NFT blockchain currently available. However, its’ popularity came with a price—the price of being one of the most inefficient blockchains.

As a result, the Ethereum blockchain used to use approximately 340 kilowatts of energy in the initial stages of an NFT. From the creation (minting) process to the sale (and transfer) of an NFT, this process used more than one-third of the energy a typical American home consumes in one month.

NFT transactions on Ethereum used to require solving complex mathematical problems by computers which leads to high usage of energy, resulting in millions and millions of tons of carbon emissions. 

This affects the climate and contributes to the degradation of the environment that is already occurring. This level of energy consumption is unacceptable due to the volume of subsequent greenhouse gas emissions.

Fortunately, Ethereum was quick to make changes so that it’s network is much more efficient today.

Why Are NFTs Bad for the Environment?

NFTs were thought to be bad for the environment because of the amount of energy used by Ethereum’s proof-of-work consensus mechanism. However, Ethereum merged to a more energy-efficient consensus called proof-of-stake that reduced energy consumption by nearly 99%.

As a result, his mechanism is considered to be a lot more environmentally friendly.

Additionally, there are other blockchains that operate on more efficient consensus mechanisms such as Solana and Avalanche.

Where to Buy Energy-Efficient NFTs?

Although the Ethereum blockchain might not be the most energy-efficient blockchain just yet, there are other marketplaces on more energy-efficient NFT blockchains, such as:

Are NFTs bad for the environment
  • Algorand: In addition to several NFT marketplaces, the Algorand blockchain enables Aorist, a climate-focused NFT blockchain for artists. Because the Algorand blockchain is designed to never split into duplicate versions, it is well suited to allow for NFTs.
  • Avalanche: Avalanche is a smart contract-capable blockchain that focuses on interoperability, scalability, and usability. Avalanche is often referred to as Ethereum’s rival blockchain, due to its smart contract and NFT capabilities.
  • Cardano: Cardano is the blockchain known for being environmentally friendly being that it is a Proof of Stake blockchain, that also offers NFTs.
  • Solana: The Solana blockchain is extremely energy-efficient and supports a wide range of NFT marketplaces, including Magic Eden, Solanart, and SolSea.
  • Tezos: The Tezos blockchain is very energy-efficient and utilizes several popular NFT marketplaces, including Rarible.

If you are wondering why people don’t use these other blockchains over Ethereum, the answer is simple. Ethereum is the most trusted NFT blockchain, and all the iconic NFTs currently reside on the Ethereum blockchain, hence making Ethereum the industry leader.

How to Offset NFTs Negative Effect on the Environment

NFTs, in other creative ways, can be less impactful to the environment. Below I have listed several options to help offset an NFT’s negative effect on the environment.

NFTs are bad for the environment
  • Utilize renewable energy: Miners who work with proof of work blockchains can utilize renewable sources of energy. Although the proof of work mechanism is very energy-heavy, the operator has the option to use renewable sources to run their computers.
  • Research better options for renewable energy: There is a lot of money circulating through the NFT industry, and with that, artists like Beeple are putting their earnings into research for a better future for NFTs and the environment.
  • Invest in experimental technologies: The money raised from the sale of NFTs can be used to fund experimental technologies aimed at reducing or reversing the consequences of climate change. Carbon capture and storage, which gathers and pumps CO2 emissions into the earth, is one example of an experimental technology that some hope will help solve the climate change problem.
  • Buy carbon offset credits: Carbon offset credits can be purchased by NFT investors who want to offset the environmental effect of their NFT investment. While acquiring carbon credits does not reduce carbon dioxide emissions, it does offer a financial incentive for others to lower their overall yearly emissions.

Key takeaways

Considering both NFTs and the environment are such complicated subjects, we need to understand the key takeaways from this article regarding NFTs and their effect on the environment.

  • Not all NFTs are bad for the environment. Ethereum is mainly to blame for NFT’s bad rep with environmental impact due to its previous Proof of Work consensus mechanism.
  • In 2022, Ethereum merged to a more energy-efficient consensus mechanism called proof of stake—reducing energy consumption by 99%.
  • There are other energy-efficient NFT blockchains besides Ethereum where you can buy, sell, and create NFTs, including Solana, Cardano, and Avalanche.
  • You can offset the negative effects NFTs have on the environment by utilizing renewable resources as a miner, researching better options, investing in experimental technologies, and even buying offset carbon credits.

Even though it might seem like we are headed in the wrong direction right now, I believe we are looking toward a more energy-efficient future, both in the NFT industry and all around the world.

Alex Gomez

Alex is a professional writer and the creator of Cyber Scrilla. His passion for Web3 and blockchain tech comes from years of experience in the space as an investor and collector. He previously worked for Gary Vaynerchuk as his NFT Editor at ONE37pm and still contributes to this day.

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