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Nft Energy Consumption-do nft use so much energy: The rate of Nft energy consumption in our world today is becoming an alarming and increasingly disturbing issue in the world today due to the massive amount of energy required.
A French digital Artist who realized that the sale of six of his nft pieces would consume enough energy to power his entire studio for the next two years in just ten seconds had to say bye-bye to the sale of NFTs.
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This is the same for some other artists and Nft enthusiasts who have given up on NFTs because of NFTs energy consumption rate.
Content Outline
What are NFTs
Nft energy consumption
Do NFTs use so much energy
How much energy do nfts take up
Why do NFTs use so much energy
The environmental impact of NFTs
Nft Energy Consumption – What are NFTs
NFTs stand for non-fungible tokens.
Non-fungible means that something cannot be exchanged for another item because it is extremely unique. For instance one piece of art is not equal to another. Both have unique properties.
Nfts are tokens that live on blockchain that represent ownership of unique items that are used to track ownership of digital files since it can be copied and distributed effortlessly.
These NFTs are a hot cake today. People create, mint, flip and even trade NFTs. These NFTs sell for high prices such as $3million dollars! Many investors and traders are making whooping cash out from these tokens.
Nft Energy Consumption – What use or Utility Are in NFTs (Nft Utility: is Nft profitable?)
NFTs are indeed very very profitable. There are a number of utilities you can derive from these digital tokens of NFTs.
Jack Dorsey the co-founder of Twitter sold his first-ever Tweet which reads “just setting up my twittr” for as high as 3 million dollars. This might sound crazy, right? but it’s the reality.
You can just think of any of these nfts as very expensive trading cards that you can trade and own in the blockchain. Nft uses the same service used to trade cryptocurrencies like Bitcoin or Ethereum.
NFTs are mostly being used to sell digital artwork right now. Like a ten year anniversary Nyan Cat that sold for $621,408 Dollars.
The Nyan cat image
But they can also be used to sell ownership of audio files, videos and even text. A good example of this is Jack Dorsey as mentioned earlier, the co-founder of Twitter, who sold his first-ever Tweet “Just setting up my twttr” for nearly three million dollars! Just a mere text.
In case you have been wondering “how you could make money with NFTs?” From the above examples and instances, you can see that there is a whole lot of money in NFTs and thousands of people are already mining it.
Check out: Top Upcoming Nft Projects Drops That Will X10 Your Portfolio
Nft Energy Consumption – Challenges of NFTs Energy Consumption
If you have been following along, NFTs have been around since 2017 but they recently got a huge rise in popularity. But the main problem here with these NFTs is the Energy Consumption rate.
It is not the absurdity of what people are calling “The evolution of fine arts collection” or that you can still copy and download the art or file that someone paid for!
The problem is that all these types of crypto transactions like Bitcoin and NFTs require massive amounts of energy. The high rate of nft energy consumption is a threat to the universe.
Just the way these NFTs are hot today in the market so is their carbon footprint and effects on Earth’s climate.
When a non-fungible token (NFT) is minted at an NFT marketplace using an energy-intensive method, such as proof of work, The environment tends to experience an impact, such as an increased carbon footprint. NFTs that are minted using proof of stake are designed to limit harm to the environment.
NFT transactions require huge amounts of energy and that is because of the high-end computers required to sell, trade, and mint NFTs and other cryptocurrencies.
It has been reported that all these Nft transactions can consume as much energy as a small country. For example Ethereum’s annual energy consumption which is used to process crypto transactions is roughly equivalent to Nigerians annual energy consumption.
Then we have bitcoin trading, which consumes more electricity annually than the whole of Argentina.
To put things into perspective, according to an analysis by Cambridge University, Argentina is the largest country by land in the whole world. and of course all this power and energy consumption can be translated into carbon emissions since most of the electricity used is coming from fossil fuels. And not renewable energy sources. As a result of this, artists have stopped selling NFTs.
Read also: How To Get NFT Whitelist A Step-By-Step Guide
Just as mentioned before is the French digital artist, who realizes that the sale of just six of his nft pieces will consume enough electricity to power his entire studio for two good years in just 10 seconds.
It is important to highlight however that there are alternative energy platforms that are also called Sidechains that are less impactful on the environment.
There are also a number of platforms that buy carbon offsets to be more environmentally conscious.
But the main source solution most activists advocate for is “clean energy” more if not all cryptocurrency machines should run on renewable energy like wind, solar and hydropower.
Nft Energy Consumption – Environmental impact of these NFTs
Let’s take a quick look at a very important topic about the nft energy consumption that no one likes talking about!
The Environmental impact of non fungible tokens or NFTs. We take an in depth look into the carbon footprint
of blockchain technology, and we break down every watt hour of energy consumed in processing NFTs from creation to sale. We created this post to provide a factual, unopinionated view based on a recent study with the idea to spark a well informed conversation.
To throw more insight on the theme ‘NFTs’ for better comprehension. NFTs are a way to verify true ownership of a digital item by attaching a unique key to it via a process called minting. When an NFT is minted, data that represents ownership is stored on a blockchain network. And whoever started the minting process is given the key that unlocks the ownership data on the blockchain. When you buy an NFT you buy the only verifiable version of the item. This naturally increases its value because the item is unique in comparison to its copies that are non NFT versions,
Why do NFTs use so much energy –Power or Energy Consumption of blockchain technology
NFT data is stored on the blockchain and through the proof of work mechanism. data blocks are checked by miners in order to reach consensus about the integrity of the data. This process is what makes blockchain technology highly secure and decentralized.
Check out: how to invest in DeFi (Decentralized Finances) step by step guide
However, the continuous data checks cost computational power and energy, regular blockchain usage such as trading, cryptocurrencies require, simple put to actions; currency in registration, and currency out registration.
In the case of NFTs, multiple blockchain data blocks are added, which in comparison with regular usage requires more checks. Simply because all of the NFT data is larger in size than regular transaction data.
How Much Energy Do Nfts Take Up
This Blockchain technology for creating NFTs calls for the argument that the Energy Consumption and thereby carbon footprint for just NFTs is out of balance.
Carbon Footprint Calculation
To clarify first, What Exactly Is A Carbon Footprint?
A Carbon Footprint is the sum of all carbon emissions released throughout a product’s manufacture process and use. As you can imagine, there are many variables. So we usually refer to an approximation when discussing carbon footprint.
In the case of calculating the carbon footprint of NFTs, there are several phases in the process that have no carbon footprint, and there are very few scientific peer reviewed publications on the topic.
Hence, estimating the carbon footprint of creating an NFT is difficult and at this moment relies on estimations.
Ethereum Blockchain Technology:
Let’s look at the process specifically for NFTs that use the Ethereum blockchain. A couple of things must happen to create or maintain NFTs.
- Verified Blockchain commodity: At the moment of minting, the token must be verified as a commodity on the blockchain.
- Balance Reflection: The account balance of the owner must be adjusted to reflect the addition of that commodity. This enables it to be exchanged or verifiably owned in the future.
- Inclusion: The transactions mentioned above must be included in a block on the blockchain.
- Consensus: All miners must reach consensus that the block is valid via the proof of work mechanism. Miners are responsible for all of these tasks, and the proof of work mechanism informs the entire Ethereum network about the actual ownership status of the NFT. This means that mining must be sufficiently challenging, or else the proof of work system is susceptible to faulty data.
Looking at the NFT mining process, a single Ethereum transaction has a carbon impact of 33.4 kilograms of co2, which is roughly comparable to 74,000 visa transactions.
In contrast, the average transaction for NFTs has a carbon footprint of roughly 48 kilograms of co2,
Nft Energy Consumption – Carbon Footprint Data.
80,000 transactions were examined involving 18,000 NFts on the SuperRare NFT marketplace, which is one of the more popular NFT marketplaces at this moment.
The average footprint of a single transaction involving an NFT including minting, bids, sales and transfers is 82 kilowatt hour with outputs of 48 kilograms carbon.
This is more than twice the cost of a regular Ethereum blockchain transaction.
Now, a single NFT may include many transactions, including minting, bidding, canceling, sales and ownership transfers, dividing the footprint by transaction type we get;
Minting: 142 kilowatt hour, 83 kilograms carbon.
Bids: 41 kilowatt hour, 24 kilograms carbon.
Canceled deal: 12 kilowatt hour, 7 kilograms carbon.
Sale: 87 kilowatt hour, 51 kilograms carbon.
Transfer of ownership: 52 kilowatt hour, 30 kilograms carbon.
This often boosts the footprint of a single NFT into the 100 to 900 kilowatt hour range, as well as hundreds of kilograms of carbon emissions, if not more.
In reality, the average NFT has a footprint of roughly 340 kilowatt hour or 211 kilograms carbon of the 18,000 NFTs in the SuperRare marketplace.
A single NFT footprint is similar to a month’s worth of total electric power use for a European resident with emissions identical to driving 1000 kilometers or flying for two hours.
It’s also important to remember that each time an NFT is created or sold. It’s a new transaction.
Now imagine this one single additional energy costs and energy usage of 340 kilowatt hour and emissions of 21 kilograms of carbon.
A single artist would very likely sell multiple NFTs, which would multiply those numbers proportionately.
Nft Energy Consumption – How Nfts Are Impacting The Environment.
67% of the 633 artists on SuperRare have NFTs with a co2 footprint greater than one ton. Even though half of the artists have just joined the platform in the previous six months. 18% of the artist’s NFTs had a carbon footprint larger than 10 tons.
To put it in context. This is the equivalent of 12 transatlantic trips, or a five year supply of electricity for European residents in SuperRare. The average footprint of an artist’s NFT is 10 megawatt hour, six tons co2, whereas the median is three megawatt hour, two tons co2.
That makes the average NFT footprint equivalent to a European resident’s electricity consumption for three years, or driving for 30,000 kilometers in a petrol fed car or taking a flight for 57 hours straight.
Now let’s take all the NFT’s registered on SuperRare and see their combined impact on the environment to get an idea of the bigger picture.
The total number of NFT’s currently on SuperRare is 18,159. The ecological cost of keeping track of all these amounts to the energy usage of 6,154,717 kilowatt hour or roughly six gigawatt hours and emissions amounting to 3.8 metric tons of co2.
This is equivalent to 2000 years worth of electrical Energy Consumption by a single person in Europe, or driving for 20 million kilometers or flying for 37,000 hours. Keep in mind that these numbers are only for one of many NFT marketplaces and also based on numbers at the beginning of the NFT revolution.
Nft Energy Consumption – Solutions
Lower carbon NFTs: The fundamental reason for the high energy consumption of blockchains like Ethereum and Bitcoin is that they use a consensus mechanism called Proof of Work.
Proof of Work is an excellent system to verify data integrity, but as global adoption of blockchains that use proof of work technology increases, so does the Energy consumption by miners to verify the data. Other blockchain variants that offer NFT support such as Tesla, Symbol and Polygon, all make use of the improved Proof Of Stake Mechanism that does not require large amounts of computing power and therefore it uses less electricity.
Tesla, for example, claims that their blockchain uses only 0.00006 terawatt hours of energy per year, compared to 33.357 terawatt hour for Ethereum. However, there is good news for Ethereum fans with ETH 2.0, A greener proof of stake upgrade is proposed for the current Ethereum ecosystem.
Ethereum plans to bring down the costs as well as the ecological impact of not just NFTs but the theory in blockchain as a whole by as much as 99.98%.
Carbon offsets: Another possibility is the utilization of carbon offsets. A carbon offset is a payment that you make to help fund a project that reduces carbon emissions, such as developing solar power plants to reduce the use of fossil fuels, or removing carbon dioxide from the atmosphere like planting forests.
The number of offsets you can buy can theoretically match the number of carbon emissions you produce, so the two can be canceled out. Although, they appear to be a good solution. Specialists advised that they should only be used when there are no other options, because it can take decades to offset the carbon emissions.
Now you know how entities impact the environment and you are better equipped with knowledge to make an educated decision, whether you support or disapprove of their usage.
Keep in mind that regardless of whether the blockchain uses proof of work or proof of stake, electricity nft energy consumption isn’t the only factor that contributes to its carbon and environmental footprint. More computer hardware is used as the number of Bitcoin miners and stakers grows, which has its own industrial and extractive effects. As a result, the total carbon footprint of entities is almost sure to be larger than previously projected.
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