Crypto trading has taken the back seat in the digital economy in 2022, with the market remaining under the bears' control for most of the year. Furthermore, traders have seen their faith rocked by the consecutive failures of centralized exchanges. These intermediary marketplaces have been the powerhouse of the industry since its humble beginnings. Now, they seem to crumble under mounting allegations of scams, lawsuits, and solvency concerns. Meanwhile, they make a convincing case for the imminent decentralization of crypto…
A multi-billion dollar sector was born out of the non-fungible token (NFT) market in 2021. Environmentalists are increasingly alarmed about the ecological impact of this growing sector.
Is NFT minting a cause for concern for our planet’s environment? What options do we have in resolving this problem? These crucial questions will be the core of today’s guide.
Minting New NFTs
Minting, the act of adding a specific item to the blockchain, is similar to producing a physical coin. It has been an exciting year for non-fungible tokens, or NFTs. There has been much attention paid to NFTs recently.
Inventors, artists, and large corporations are keen to cash in on this trend. In the process of generating an NFT, one of the most crucial steps is minting.
It’s difficult to predict how long it will take to mint NFTs. Since most NFT markets make creating an NFT simple, this is usually not a problem.
Digital material may quickly become NFTs and enter the marketplace. More and more systems allow you to mint NFTs in a similar way as you upload a video on TikTok. NFTs may be a quick way for some digital creators to make money.
Keep in mind, though, that this movement is just getting started. NFTs found their first usage in the online creative economy.
Monetizing material long after the sale may be a game-changer for artists, musicians, multimedia creators, and video game makers.
Assessing the Environmental Costs of Minting NFTs
A report by NFT Club opened a considerable debate over the environmental cost of NFTs. The main problem seems to be the NFT minting CO2 emissions.
You must pay a “gas fee” before you may create an NFT. You must complete this milestone for your NFT to enter the blockchain distributed database. Remember: NFTs must be on a blockchain if you want to show that you are their sole owner and creator.
According to the study, adding any NFT to a blockchain requires around 83 kg of CO2 emissions. What’s even worse is that the carbon cost of each NFT continues to rise even after the minting process.
Specifically, the report estimates the following costs:
- Submitting a bid for an NFT costs 23 kg of CO2.
- Selling an NFT involves the emission of 51 kg of CO2.
- Transferring an NFT emits 30 kilograms of CO2 into the atmosphere.
- Re-selling an NFT on the secondary market has an environmental cost of 81 kg of CO2.
To the general trader, minting and buying NFTs simply comes down to a mouse click. However, if we consider the vast amount of NFTs on the market, this report is undoubtedly alarming.
What if NFTs Consumed Less Energy?
Typically, the process of minting or transferring an NFT requires much energy. But what if we had alternatives to this system? As it turns out, we may have new options.
You can generate NFTs on blockchain systems utilizing the proof-of-stake operating technique without consuming excessive power and harming the planet.
There is less energy consumption in the proof-of-stake approach than in the proof-of-work method. In simple terms, proof-of-stake doesn’t require much computational power.
There are incentives for miners to use power in a proof-of-work blockchain network to mine blocks. To participate in a proof-of-stake blockchain, instead, validators must stake their tokens.
It is possible to protect a blockchain without needing excessive energy consumption from network members. This is the fundamental mission of any proof-of-stake system.
People can use NFTs in inventive ways to reduce their environmental effects. The following subsections provide more information on the matter.
To create NFTs via proof of work, miners can use renewable energy sources. Proof-of-work mining consumes much energy, but the energy doesn’t have to be polluting.
Solar power is a popular alternative, but wind and hydroelectric power are also viable possibilities.
With certain NFTs reaching high prices, some earnings help invest in renewable energy. The environmental effect of generating NFTs might decrease with a large-scale move to renewable energy.
Carbon Offset Credits
The environmental effect of an NFT purchase can decrease by purchasing carbon offset credits. To be precise, this instrument has no direct impact on the overall amount of CO2 emitted.
However, it does create a financial incentive for others to reduce their polluting emissions over time.
NFT sales earnings can potentially help us invest in climate change mitigation and eco-friendly technology.
An example of an experimental technology that some hope will solve the climate change problem is carbon capture and storage. This system gathers and pumps carbon dioxide emissions underground, with obvious benefits for the air quality.
Moving Toward an Eco-Friendly Future for NFTs
NFTs might be environmentally beneficial if this business switched to another blockchain. As of today, Ethereum’s dominance in the NFT market is still easy to spot. Ethereum 2.0 should dramatically reduce the system’s environmental impact, but the upgrade may not come before 2023.
It becomes essential to know the variations between the blockchains to hunt for more sustainable networks. This argument is particularly valid if you’re an ecologically aware NFT consumer. You can influence industry-wide change by leveraging NFT markets that enable these networks.