The Environmental Impact of Non-Fungible Tokens
2021, among other things, seemed to be the year of the NFT.
What are they? How do I get one? How do I sell one? Why are there so many silly little monkeys selling for millions? Can’t I just screenshot them?
Even just the term ‘NFT’ reached level 100 on Google Trends during the week of Dec. 12.
What are they? Ms. Revenue Rowdy is here to break down the hype and the environmental dangers that the world of NFTs thrive in.
Non-fungible tokens are units of data (non-interchangeable) stored on a blockchain, an almost digital excel sheet, primarily associated with the cryptocoin Ethereum. They are most popularly displayed by pictures (like the sleepy monkey seen above), but can also be videos or audio.
When you buy an NFT, you receive a certified statement of ownership. It’s like, anyone can own a print of the Mona Lisa, but only one person can own the original Mona Lisa. In this sentiment, NFTs play heavily into hypebeast culture; buying something for millions not because of its quality or the effort of labor that went into it, but because it is one-of-a-kind.
And personally, I’m a little tired of hearing about them 一on my social media showing videos of finance bros never having to work a nine-to-five and why you shouldn’t either, on r/ anything economic and at family dinners during the holidays with my older brothers in tech. (Sorry Rob and Luc, much love).
Cryptomining setup Credit: Tom’s Hardware
And upon further research, it seems like the environment is sick of hearing about them as well. The cryptocoin Ethereum, which is most associated with the world of NFTs, is deeply controversial in its organization.
Because there is no third-party system in place, like a bank would be, Ethereum relies on hundreds of people around the world known as cryptominers to monitor transactions with insanely environmentally costly setups (like the one pictured above). By estimating the amount these miners spend on electricity, it can be noted that one Ethereum transaction consumes 238.22 kWh, compared to 100,000 VISA transactions consuming only 148.63 kWh.
This process is intentionally energy inefficient so that messing up the blockchain wouldn’t be that profitable, given the environmental energy needed to cryptomine. In fact, it is claimed that the cryptocoin Ethereum uses about as much electricity as the country of Libya.
There’s also the statement that “the average NFT has a carbon footprint is equivalent to more than a month’s worth of electricity for a person living in the EU.”
So yeah, it’s not the most sustainable practice.
And if you’re so intent on entering the NFT art world, the good news is that there are cryptocurrencies that are less environmentally costly like SolarCoin, PowerLedger and Stellar. Additionally, Ethereum has plans to roll out a dramatically more environmentally friendly practice in 2022. I’m skeptical, but it would be nice.
Lily Olsthoorn is an online writer for the super cool, super lovely Rowdy Mag. If you’re wondering what she’s up to at this exact moment, she might be rollerskating, drinking tea, thinking about jazz piano solos, or petting a cat. Or all four. See her on Insta at lily.ols :)