With the rise of cryptocurrencies such as Bitcoin and Ethereum, many companies, industries, and even governments have hopped on the trend of crypto investment and trading. More recently, artists and celebrities have profited off the blockchain database to sell and trade exclusive digital content for enormous sums of money. As the craze over this trend persists, the environment suffers deep, long-lasting consequences.
This digital content, formally known as Non-Fungible Tokens (NFTs), has become increasingly popular as prominent figures like Twitter CEO Jack Dorsey or Canadian musician Grimes have begun to sell their own work. NFTs are unique from other digital artwork, however, because they cannot be replaced or exchanged like dollar bills or cryptocurrency. The promise of an exclusive collectible asset is what attracts buyers to spend millions for NFTs.
NFTs are part of the Ethereum blockchain which allow for the creation of such unique tokens. The first ever NFT, Etheria, was distributed in the network in October 2015, but NFTs rose to popularity in the beginning of 2021, when American digital artist “Beeple” sold a digital image for a whopping $69.3 million, making him one of the most valuable living artists at the time.
As the buyer virtually collects luxurious digital pieces of art, the planet collects tons of greenhouse gas emissions generated by the system that sustains NFTs – cryptocurrencies. Used to buy, trade or sell goods and services, cryptocurrencies have previously raised concerns in terms of price volatility and energy consumption.
Simply put, the system is built and sustained by a process known as mining, in which transactions are confirmed by the network using computing systems that solve complex math problems. To keep the operation running, these computers must run 24 hours a day, adding to the growing climate crisis.
Furthermore, experts estimate the amount of power an NFT uses up to an average of 369 kWh, over 10 times more energy used per Ethereum cryptocurrency transaction. Considering that Ethereum currently consumes the energy equivalent of a medium-sized country, normalizing NFT transactions could lead to devastating environmental repercussions.
According to a report by ARTnews, Ethereum alone is responsible for approximately 96,200,000 tons of carbon emissions since its inception in 2013. This number equals the combined annual carbon emissions of the 84 least carbon-extensive countries. Buying and selling NFTs could potentially drive up an increase in Ethereum consumption, multiplying the number of machines miners use.
It is worth acknowledging that there are several benefits to NFTs—especially for rising artists. Besides providing a unique opportunity to sell their artwork for considerable amounts of money without relying on art galleries and auction houses, NFTs allow artists to keep more of the profits by receiving a percentage of sale whenever their art is sold to a new owner. However, the costs outweigh the benefits by a significant margin.
Gas emissions will rapidly increase as people keep buying or selling NFTs through the cryptocurrency system. Left entirely unregulated, their growing popularity is a threat to the environment and any effort to stop the permanent consequences of the climate crisis.
The growth of NFTs, though novel and considered popular by many, must ultimately be considered in light of the serious damage it could do to our planet. This is not to say that all the rescuable aspects of NFTs have to be discarded altogether. Nevertheless, it means that systems that intentionally address sustainability must be prioritized, while alternate systems that can hurt the environment must be prudently regulated.
There are different approaches for keeping a blockchain that are more environmentally friendly than mining. But these changes depend on how much invested parties—organizations and individuals alike—are interested in preserving our only home. Despite calls to colonize Mars, it is our moral obligation to be wise stewards of this Creation. As we continue finding new ways to consume art and other media, environmental efforts must be strong priorities to consider.