In my most recent from April, I said computation for blockchain processes — such as for NFT transactions — use exorbitant energy. That translates to a carbon footprint and environmental damage (exacerbating climate change, pollution), but is it really how things are?
Just now, I did a search for terms ‘nft, environment’ and tweets along these lines were at the top. From that, I found this link on Medium from Memo Akten that thoroughly makes the case for this eco-destructiveness especially with NFTs.
The crux of the dilemma (mentioned in that link towards the end) is the Proof of Work method required for nodes / miners to verify transactions on Ethereum. Proof of Stake is a newer, energy efficient way of verifying. It’s used with some other blockchains.
Eth2 a term used for the next iteration of Ethereum, which will use Proof of Stake. It exists now with something called the beacon chain, but it has to merge with the existing infrastructure. Before that, some technical steps need to happen called hard forks. Q1 2022 is the best estimate for ‘The Merge’ meaning the switch to PoS.
Ethereum in it’s current 1.0 form with PoW is the most widely used in NFT marketplaces. OpenSea, Rarible, SuperRare, Foundation are among the most popular and are exclusive with Eth (although OpenSea announced plans to also support Tezo).
The Ethereum blockchain is the one the majority of NFTs live on. It’s because creation and use of NFTs require that a blockchain software support smart contracts, which Eth does.
After the merger, disproportionate energy consumption really will be resolved on the Eth network by a factor of 99.99%. For now though, a creator on SuperRare is boiling a kettle 120 thousand times as per that Medium post.
As a creator myself, besides Ethereum, I’ve minted NFTs on two crypto platforms that use Proof of Stake and support Smart Contracts: Tezos and the Binance Smart Chain (BSC).
Hic Et Nunc is the largest NFT marketplace based on Tezos. HEN launched in March, and at one point in April had more unique active wallets than some of the top Eth marketplaces.
TQ Tezos used data from the Cambridge University to show Tezos validation processes using 1.5 million times less energy than on the PoW Eth network. #cleanNFT is most often used on Twitter for this reason.
Binance Smart Chain (BSC) combines Delegated Proof of Stake and Proof of Authority, a unique method that’s faster, more efficient and costs less. The platform works in similar ways as Ethereum, which makes it strong for DAPPs (decentralized apps) and NFTs. BSC is presented as a competitor, calling its mechanism for validation more environmentally friendly.
For minting NFTs with BSC, I’ve used Liquidity and it has been cheaper even than with Tezos. Other NFT marketplaces running BSC are AirNFTs and Enter.Art.
So the answer to Are NFTs Eco-Destructive?
They don’t have to be because there are good #cleanNFT alternatives to Ethereum. Ethereum’s problematic energy consumption will be resolved after Eth2.
This piece on the Verge I came across gives additional perspective, The Climate Controversy Swirling around NFTs.
However, the elephant in the room for crypto generally is Bitcoin. Energy for a transaction with Bitcoin is more than double that needed for Ethereum. Elon Musk used the word insane.
This is my condensed version of rationale justifying Bitcoin’s energy use.
Using Bitcoin is less wasteful than inflationary fiat monies with banks and exchanges. The eventual benefits and efficiency gains justify the cost. Besides, there are harder to explain energy drains, such as military armaments.
Michael Saylor’s tweet was more eloquent. A similar case could be made for NFT energy use.
