The NFT craze infuriates me, even though it's great to empower artists,and support a vital part of society through a devastating pandemic. The cost of this support is far greater. NFTs have a catastrophic impact on the environment, the true scale of which we can't even begin to understand.
I am not an IT-mad person by any stretch of the imagination. I am, however, very interested in art. NFTs got me very interested from an art perspective at first. Having dug the rabbit hole of NFTs, I was shocked to find out the environmental impact of these modern seemingly good platforms, and you will be too. You don’t have to be a tech person to understand the severe extent of the harm that NFT’s are causing.
Before I go any further: artists are at no fault here. The ones that manage to sell their artwork are benefiting from NFTs financially. For the past year, the arts industry has suffered incredibly. I encourage supporting artists by all means. I am opposed to harming the planet in the process.
How Do Popular Cryptocurrencies Work, and Why Are They Harmful?
The cryptocurrency on which most NFT sales are based is called Ethereum. The price of Ethereum is linked to how much supply/demand there is. When a currency grows, there is a lot of demand, leading to a sudden increase in transactions. Physical energy must be used to complete every transaction. The more popular a currency is (increased demand), the more energy is used in processing transactions. This is called Proof of Work. In order to do any transaction with Ethereum, the system must show that it has done work. The higher the value of each transaction, the more work has to be done. The more people hop on the hype train, the more popular the currency. The more popular, the higher the number of transactions. The higher the number of transactions, the more energy is used. This is a never-ending loop.
An average Ethereum transaction takes up 35 kWh of energy. To put that into perspective, that’s how much an EU citizen consumes in 4 days. This is unbelievably high already. But it gets higher, depressingly higher.
What Are NFTs?
The idea behind NFTs is to create a unique token that cannot be exchanged, divided, or changed in any way, hence the non-fungibility of the token. Therefore, an NFT is a collectible item, like a collectible dollar that’s been issued once, sort of like buying an expensive painting. It holds value as an item. You can’t pay with a piece of painting for ice cream. An NFT is a digital version of this.
The Energy Consumption of NFTs Is Catastrophic
The trick with NFTs is that they are unique. The more artists mint NFTs (create digital assets for their artworks), the more transactions happen. Moreover, every bid, canceled bid, purchase, etc. is also a transaction. This suggests that an NFT is very transaction-heavy. And because of the nature of an NFT transaction, it takes much more energy compared to a regular cryptocurrency transaction. In numbers: 82 kWh, with 48 kg of CO2 emitted. That’s more than 2.3 times higher than a normal transaction.
You already know that an NFT transaction takes up a lot of energy. But an NFT sale from start to finish can be hundreds of transactions. It is estimated that an average NFT takes up 340 kWh of energy and emits 211 kg of CO2. This compares to flying for two hours or driving for 620 miles. Worst, most NFTs will never be sold, causing artists to lose money while also harming the planet irreversibly.
What About Artists?
A few anonymous case studies will come in handy.
Say an artist sold around a small number of artworks, with each having a few hundred editions, totaling 800. Over a course of 3 months, these sales totaled 138,272 kWh of energy and 85 tons of CO2. This is comparable to flying for 825 hours and consuming electricity for 40 years.
Another artist is more popular. They have made more artwork and sold around 1,500 editions. During that time, they have used 263,538 kWh and emitted 163 tons of CO2 as result. This compares to the total energy consumption of an EU citizen for 77 years and flying for 1,500 hours. If you fancy boiling a kettle, you’d have to boil it 3.5 million times.
You can interpret these values however you wish. But energy consumption of NFTs is unbelievably high, unnecessarily high.
What About the Platforms?
Open Sea, one of the most popular platforms for digital art, underwent (as of 2021 March 31) 869,077 transactions, resulting in 67,824,222 kg of CO2 emitted. Another popular platform, Nifty Gateway, underwent 130,904 transactions, resulting in 15,382,066 kg of CO2. The nine most popular NFT platforms have undergone 1,606,435 transactions in total. This emitted 115,811,072 kg of CO2. That’s 115,811 tons. You would have to fly for 146 years nonstop to emit that amount. An EU citizen would have to use electricity for 83,266 years to emit that amount.
Can Something Be Done?
The short answer is yes, there are ways to do NFT’s without harming the environment on such a biblical scale.
The solution that has been in development for the past seven years is Ethereum 2.0. It uses a different method that is called Proof of Stake. The mining capability of a new block is not linked to energy, but to the amount of currency already present. Current news suggests ETH 2.0 being released to the general public in the next few years. Hopefully, the sense of urgency that is created by the sudden jump in NFT popularity will speed up the rollout of ETH 2.0. However, once launched, ETH 2.0 will only enable faster greener transactions. A better solution than ETH 2.0 is also in development.
That solution is Efinity. A recently introduced NFT chain (part of the futuristic Polkadot network) is created with the goal of minting NFTs at heart. Efinity claims to be cheaper for creators and a lot cleaner for the environment. For the end-users, Efinity will allow fast (no more than six seconds) transactions, and what is even more exciting, no need for a blockchain wallet. This improves accessibility for all users and allows for NFTs to grow even more while being sustainable. This growth will be encouraged by how easy it will be to use Efinity for a new user. The general idea of the NFT is great; however, the execution is terrible. Efinity aims to solve that.
The CEO of Enjin (the company developing Efinity) claims:
NFTs should be for everyone. Building with Polkadot will enable us to deliver an accessible, scalable solution that empowers everyone to participate in the emerging NFT economy. With the end-user in mind, Efinity will provide a fun, simple, and accessible experience for all.
Closing Thoughts
For now, NFT’s are truly deadly for the planet. Until ETH 2.0 launches or even better, Efinity, I discourage NFT transactions. There are greener ways of supporting artists, such as donations or auctions.
Please, do not harass artists using NFT platforms. Instead, share this article in order to raise awareness of the pressing issue. I don't condone anyone who used the information in here to attack an artist.
What are your thoughts on this? Should NFTs be protested against in spite of what they offer artists? Should we boycott NFTs? Let me know in the comments; I always read them.
I’ll be the first to admit I probably don’t fully understand NFTs, but at first glance they seem almost entirely pointless. The numbers you’ve laid out suggest that they’re not only dumb, but massively unhelpful at a time when we can’t afford any more climate/energy mistakes as a civilization. Thanks for posting this.
May I suggest that you include a few links to back up some of these statistics?
Yes, will add soon.
Perhaps this link helps to understand NFTs?
Maarten Heilbron - a cynics guide to NFTs (for photographers)
https://www.youtube.com/watch?v=Dz6VlohHRPw
Sources:
In-depth research into the environmental problems with NFT's: https://memoakten.medium.com/the-unreasonable-ecological-cost-of-cryptoa...
Statistics per NFT platform: https://github.com/kylemcdonald/cryptoart-footprint
More on:
Efinity: https://enjin.io/blog/efinity
Solutions to the problem: https://flash---art.com/2021/02/episode-v-towards-a-new-ecology-of-crypt...
Other articles: http://cryptoart.wtf
This is not in-depth. All I see are some basic calculations on computing power and emissions, using some out of the box figures they got online somewhere. Absolutely nothing in context or nuanced using experts in computing, physics, and ecology. Let us seem some peer-reviewed studies instead of some bloggers who need to get a website hit or are promoting their own technology.
Check these articles, perhaps you find them more scientific?
https://arstechnica.com/tech-policy/2017/12/bitcoins-insane-energy-consu...
https://arstechnica.com/tech-policy/2018/05/new-study-quantifies-bitcoin...
Thanks a lot for the suggestions, I'll check them out. I wish I could pin the comment with sources haha ;-)
I will relent it is pretty silly and agree that after EIP 1559 hits this may become a more viable economy.
That being said I think it is ignorant to completely ... ignore that traditional currency uses a massive amount of energy as well. Since that system is so huge and ubiquitous I imagine it's hard to calculate the amount of energy an auction at Christie's consumes for instance. At least in this case you are paying the artist directly (with a little spiff for the hosting site) and paying the miner's to maintain the network. On top of that, NFT's are able to pay out to the original artist a dividend vs making some millionaire even more rich through said Christies auction where the original artist will get jack shit down the road.
There's plenty of things on this planet causing harm to the environment. NFT's and crypto are just the latest culprits that happen to be very easy to calculate energy consumption for. Like anything new - it will settle into actual viability or blow away like dust in the wind.
NFT's are by far not the biggest source of CO2 emissions, but they emit surprisingly high amounts. To me, those are astronomical figures.
I like the idea of an NFT, but not how it's being done now.
Well put - agreed.
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Big difference is traditional currency is built on actual goods and services that make up the GDP of the government that issues that currency. NFTs are built in the digital realm with no connection to anything of actual value other than the number of transactions and energy used in creating them. They are smoke and mirrors. If there is a major financial collapse, they will be worth nothing. Traditional currency isn't a whole lot better, but it will retain some sort of value even if greatly diminished by hyper inflation. Gold and precious metals on the other hand will always retain some value. Unlike NFTs which again are strictly digital and hold no physical value.
I'd argue that soon crypto will be very widespread, and NFT's will expand. They offer quite a lot to artists and users. Besides, I think when credit cards were introduced, many people also said that they can't feel the money.
Credit Cards are not a form of currency and aren't comparable to NFTs or traditional currency
They're not, but they show how something virtual can represent actual financial value.
Credit cards don't hold any value. You can only go as far into debt as a creditor feels safe in your ability to pay back with currency.
Yes absolutely, I'm just using them as an example of something virtual that is linked to monetary value. You can't touch the money on a credit card, but it's there. With an NFT, you can't touch it, but it's there.
NFTs only exist in the digital world. They are not based on goods and services. Credit Cards are a form of accounting, not currency. They are not a form of value.
I used the credit card analogy to show how something new is often met with confusion haha. Believe me, I completely understand that NFT's are only digital, not physical.
I'm quite sure u r a baby boomer
We are so far detached from the gold standard that it's nearly irrelevant at this point. Governments saying money is worth something is the biggest influencer in this and second is stake in the currency. More than $2 trillion worth of crypto exists - the people that own this crypto and run the networks aren't going to just let the currency die. This is why ETH is moving to staking vs proof of work this year. Enough people have ETH that it has solidified itself. Currency can literally be anything that people agree has value.
The idea that something digital can't have a corresponding physical connection in the world is fully dumbfounding. And also incorrect. If there were a major financial collapse by a country, I'd actually wager that crypto is safer than FIAT since it is NOT tied to a government or singular company / entity. As long as computers, the internet, and electricity (duh) exist - crypto will not die.
When you really really think about it - there isn't much difference between crypto and FIAT unless we are in a global apocalypse in which case who knows what will be worth value? Soda caps? Bread? RTX 3060 ti's?
I truly hope that the proof of stake currencies will be used for NFT's as soon as possible. Although Efinity sounds promising too.
Digital can and does translate to physical. If someone sells an NFT, they can take the cash out of the wall. I think the confusion is around the artwork itself being in the digital world only, without having any tangible coorelation.
POS chains are doing NFT’s...look no further than the massive volume on WAX.
Any artist can always vault the physical item and allow it to trade again and again in the form of a non-fungible token. If the owner of that token wants to redeem the physical artwork, simply request and show ownership. It’s already happening friend.
Currency is base on GDP. That's physical in the form of goods and services transacted on a macro scale. There is not enough physical gold to back up all the goods and services transacted in today's economy. Crypto is solely based on what people are willing to spend to acquire it. It has no connection to anything physical. It's only worth something to the people who wish it to be worth something. Unlike Fiat currency which is tied to GDP which is tied to the economy.
Crypto is also part of this equation even if it's not printed by a government.
It's amazing that people on here can't see how fiat currency, which is not all the same - the US Dollar is a very strong fiat currency for example - is significantly different from crypto and how crypto is ultimately going to take a dive if not collapse completely (if something awful happens).
More amazing is that people can argue fake digital money is somehow better than fiat currency backed by the entire government of a nation - at least a very stable and strong nation that isn't about to collapse economically or be overthrown or something.
The ebb and flow of world economic cycles predicts with absolute certainty that at some time, there will be a major, global depression. What goes up always goes down. It's the nature of Capitalism.
We are in a recession right now because of COVID. I'm sure that a certain crisis will have a major effect on crypto prices. But this is way outside of my area of expertise, I'm not a macroeconomist who can accurately comment on the prices of crypto.
Food, property and precious metals will always retain value.
If there is huge supply and low demand, they perhaps won't. I agree that primary goods will always be required. In war, food is the currency. Golden rings were exchanged for bread etc. I think the value of goods is directly dictated by the supply/demand ratio.
GDP is a bad measure of the economy. It includes money spent on policing crime, illegal drug deals as well as the drug enforcement and rehabilitation, prosecuting and defending criminals, the cost of clearing up environmental damage, gun-running, prostitution, fake goods, managing prisons, the medical costs of treating poor health, counselling families after a murder and so on. You can have a totally failed society with a growing GDP.
As for the value of money, governments have no control over the money supply. When you or your nation borrow money, it is from privately owned banks. The banks don't have that cash, they just lend it and charge you for magicking it out of thin air. The private banks create most of the money in the world economy and the governments have no control over most of it and therefore no control over inflation. Money is an abstract concept.
Similarly, economic growth, touted to be a good thing for the world, is not. Growth means more consumption and more consumption is not possible much longer because there are insufficient resources to sustain us all, even at our current rate of consumption.
I'm concerned when NFTs go poof in the wind, just the shear value of them (and growing rapidly), will bring down traditional currencies and economies along with them This is a Soros wet dream.
NFTs as they are today are one of the biggest scams of the past couple decades.
Upfront: I know very little about all this fake cryptocurrency stuff, though I do invest in crypto along with my stocks via robinhood. So I welcome anyone to correct me or to add on to what I'm going to say because I am fully open to the possibility that I am entirely wrong, and I'd kind of like to know more about these confusing as hell NFTs.
The original intent, as far as I understand, was good. I believe it was that each NFT would be a unique item (like a limited edition print) - there may be only one, maybe 50, whatever. But most importantly, NFTs were sold by the artist themselves, or maybe someone selling for them. They were *official*. The issue is that its ballooned into a giant Ponzi scheme, where anyone can take anything that's ALREADY ON THE INTERNET and sell an NFT of it. They don't have to own it, it doesn't even have to be unique in any way - anyone can already access it.
On twitter recently, one of the Winklevoss Twins tweeted in support of NFTs and suffice to say, a lot of people disagreed. One notable exchange was in response to his assertion that it frees art for the entire world, because now you can be anywhere to see, say, a painting that's in the Metropolitan Museum of Art. Someone asked how that's the same thing (viewing an image of a painting), and then asked why anyone needs an NFT of that when you can literally google the photos. Winklevoss responded by saying the NFT is the "original" and that "copies" are degraded in quality. The person correctly noted that 1) it's not an original anything, it's a digital link, and 2) digital data like that doesn't degrade.
It seems to be something rich hucksters (like the Winklevosses) support and take to the bullhorn for, but what they're talking about is literally meaningless (I'd think any logical person would figure out immediately that it makes no sense).
So, if the original intent was to sell "limited edition" art sold by the artist (or controlled by the artist), I think that's great. I think it's weird, but hey, I think a lot of things are that people love.
Now, can someone explain the average Ethereum transaction uses as much energy as an average EU citizen does in FOUR DAYS???
That's another side of the argument. Most artists don't sell their artwork. There is value in investing in an NFT for the buyer just like investing in a Van Gogh was very smart a long time ago.
If you're interested in looking at the reasons why crypto transactions are so energy-consuming you may want to watch this video: https://www.youtube.com/watch?v=3EUAcxhuoU4&ab_channel=BinanceAcademy
It does a great job at explaining it.
Van Gogh's and other artists work are physical and exist in the real world, unlike NFTs and Crypto.
Digital art on the other hand, exists in the digital world. With the rise of PS came rise in digital art. Digital artists can only sell their work as prints. When digital artists sell NFTs they make quite a bit more. Personally, I'd never buy an NFT. I don't have the money nor can I be bothered. Here's an article that offers insight into people who buy NFTs https://fstoppers.com/humor/nft-nft-just-sold-10-million-556336
Prints are physical. Digital art can be created and used in the digital realm but in general their value is transitory and diminish rapidly over time. Old movies, and composite images generally are free after copyright expires. Holding no lasting value.
We'd have to see about the value of NFTs down the road. I strongly encourage you to read the article I linked.
Oh their value is increasing exponentially. It doesn't mean they now, or ever will be actually based on any physical standard form of value. It's 100% digital. Not physical.
I forecast that the NFT bubble will burst at one point. What goes up must come down.
There's absolutely no doubt, at least that any reasonable person would assume, that this ponzi scheme is going to crash and when it does it'll crash hard.
The whole thing is nothing but a joke. Scammers and rich jackasses selling vaporware to people who don't know enough and are just trying to get in on the current "thing."
Frankly, it should be illegal.
Yep, scammers and jackasses. I don't know if it can be made illegal. But it's all just smoke and mirrors, earning money on digital illusions.
Like trading stocks where the value of stocks is far removed from the actual value of the company whose stock is being traded...
I have to agree with Matt.
I see why. I'm not buying NFTs, or commenting on their value to investors. I'm sure there is something since so much is spent on it. I'm simply saying that NFTs, as they are now, are extremely harmful to the environment.
I don't think anyone can take an artist's original work and sell it as an NFT. They would get stopped at one point or another in the process.
Nope. There is rampant "counterfeiting" with NFTs.
Thank you for bringing that up, Matt. I'll look into this a bit more. Perhaps I'll write another article on counterfeit NFTs haha. Although when I finished this one, I was properly depressed.
I don't blame you - all this fake money/fake ownership of digital items.... it's all so bizarre. I still don't, and never will, understand how crypto like bitcoin came to have the value that it does and what the point of it is really is. I've tried to use bitcoin a couple times and to send, say, $20 of bitcoin to someone you'll get slapped with some ridiculous fee (no joke it may be $8 or something insane, just to send $20). There are even the same insane fees just to buy or sell bitcoin!
What is the point?? Why is it useful??
I'm 31, I'm too old to understand this shit anymore.
I think the ownership of crypto is real, as many people do own crypto. The fee for sending crypto is how service providers get profit.
One benefit of owning crypto is the anonymous nature of it. Many people find it useful because of that. There is a bad side to it, unfortunately.
Why is digital money useful? You have any idea how costly and inefficient it is to move physical money around?