You've definitely heard of non-fungible tokens, or "NFT" for
short, the new BIG Thing that’s been in the talks for around
the world, even though you have no idea what it actually
means.
Well, in order to help you understand the sole
concept of NFTs in a simpler way, consider them to be highly
costly trading cards, like the Yu-Gi-Oh Duel Link cards that you
can sell, trade, and possess on the blockchain. If you're
interested in cryptocurrencies, you're probably familiar with
the same service that's used to exchange Bitcoin or
Ethereum.
NFTs are popular right now, but so is their carbon imprint on
the planet's environment, which has raised alarms
throughout the eco-friendly community of the world. But the
question here is how does a digital technology that’s
supposed to only exists virtually harm our real world?
The Impacts of NFTs
Right now, NFTs are generally used to sell digital art, such as
a 10 year anniversary nyan cat or popularly known as the
Rainbow cat that sold for hundreds of thousands of dollars,
but they may also be used to sell ownership of audio files,
films, and even text. An excellent example of this is Jack
Dorsey, the co-founder of Twitter, who sold his first tweet for
over three million dollars! I know, it doesn’t make any sense
but that’s the whole point, it shouldn’t because NFTs are like
the expensive art that’s sold out in the auction for millions of
dollars but anyone can have a copy of it.
But these NFTs are now taking over the traditional items in
games, imagine buying the expensive CSGO skins that are
one of a kind, now wouldn’t that just add a new level of flex
to the game that’s already too popular for players flexing
with their highly expensive skins.
NFTs have existed since 2017, but their popularity has
recently skyrocketed. The primary issue here isn't the
ridiculousness of what some are calling the progression of
fine art collecting, or the fact that you can still duplicate and
download the file that someone spent millions of dollars for.
The issue is that all of these crypto transactions consume
large quantities of energy due to the high-end computers
necessary to sell, trade, and store bitcoin.
It's difficult to believe how much energy these transactions
necessitate, and you'll be surprised by the figure. According
to some of the reports, all of these transactions combined
can consume as much energy as a small country! For
example, the yearly energy consumption of Ethereum utilized
to execute crypto transactions is almost similar to Nigeria's
annual energy use! To put things into perspective, bitcoin
trading consumes more power yearly than the whole country
of Argentina, which if you don’t already know is ranked as the
8th largest country in the whole world, land-wise.
Of course, because the majority of electricity is generated by
fossil fuels rather than renewable energy sources, all of this
power consumption may be converted into carbon emissions.
As a result, several artists have ceased selling their NFTs
upon realizing just how much energy is needed to facilitate
such transactions over the blockchain network, which
requires a lot of computational power, consequently using
more energy.
How to Tackle NFTs’ Impact on Environment
It is crucial to note, that there are alternative NFT platforms
known as side chains that have a lower environmental effect.
There are other sites that purchase carbon offsets in order to
be more ecologically conscientious. We have seen a surge in
the popularity of cryptocurrencies that are built upon a more
sustainable network to reduce the impact of carbon
emissions around the world.
More if not all cryptocurrency machines should run on
renewable energy like wind solar and hydropower until then
the key takeaways here are NFTs are good for artists bad for
the environment and nothing more than a flex for the buyers.