NFTs, or “non-fungible tokens,” are digital-only assets bought and sold online that have been growing in popularity. But their production has caused some concerns about how they could be producing more greenhouse gasses.

How NFTs are made

NFTs are developed through blockchain technology, similar to cryptocurrencies like Bitcoin.

When an artist uploads a piece and “mints” it into an NFT, they begin a data mining process that uses a large amount of computing power and energy.

Most NFTs use the blockchain Ethereum, which runs on a system called “proof of work,” which forces users to solve complex puzzles through energy-guzzling programs to build a new “block” to a decentralized ledger called the blockchain.

Ethereum saw a major spike in energy consumption beginning in February 2021, with an annualized electricity consumption footprint exceeding countries like Colombia and the Czech Republic.

What are NFTs' environmental impact?

The full impact of NFTs is still being studied.

The New York Times reports that one estimate, backed up by independent researchers, found that an average NFT produces a footprint of more than 200 kilograms of planet-warming carbon.

Research from Cambridge University has estimated that mining Bitcoin uses more electricity than entire countries like Argentina or Pakistan.

However, there has been some pushback to claims of their dangers, with NFT trading platform Super Rare arguing that NFTs do not add to the emissions of blockchains such as Ethereum.

Sustainable alternatives?

Ethereum has said it will reduce its carbon footprint by moving to a different model called “proof of stake,” which won’t require miners to compete to add assets to the blockchain.

This model would reward participants based on how much cryptocurrency they own, cutting down on computational work. While it introduced “proof of stake” in a new version late last year, it has still not been fully integrated into the platform.

Many users of NFTs are skeptical that Ethereum will make the full transition. If Ethereum cannot convince everyone that “proof of stake” is the preferred model, they fear the system could fall apart.

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