NFTs and The Environment - Is The Future of Non-Fungible Tokens Friendly For The Earth?

Are NFTs harmful to the environment? Explore some crypto basics for a better understanding of how NFTs can impact the environment.

NFTs and The Environment - Is The Future of Non-Fungible Tokens Friendly For The Earth?

NFTs And The Environment

The growing hype surrounding NFTs continues to be steady, while pricing has been anything but. On one hand, people are enthusiastic about the innovation and collectability aspect of NFTs, however, others are critical and believe NFTs are nothing more than a painted picture of optimism.

Another concern those averse to NFTs raise, is the environmental impact and ethics behind this trend. Below we will cover everything from the basics of NFTs to why they are thought to be bad for the environment, and ways to get involved in the community without leaving a massive carbon footprint.

Crypto Basics

Before diving into NFTs and their environmental impact, we should cover some crypto basics to help you better understand.

What Is Cryptocurrency?

Cryptocurrency, also known as crypto, is used to buy and sell NFTs. Crypto is decentralized digital currency designed to be used over the internet. It is revolutionizing the way money is transferred and processed. With crypto, there is no middleman, bank, or processor. Because it is decentralized, it is not issued or controlled by one centralized authority like the government. You may be wondering now, how is cryptocurrency safe?

What Is Blockchain and Crypto Mining?

Cryptocurrency safety comes from its network, which is typically structured as a blockchain. A blockchain is just a way of storing data much like you would do with a traditional database. Network operators (miners, node operators, validators, etc.) each hold a copy of the transaction record, or ledger, which stores transactions in blocks of data. These blocks, and the transactions within them, allow everyone on the network to have and verify a shared view of all transaction history, and hence, everyone's current
NFT wallet balance at any given time.

The network operators are incentivized to validate new transactions and continuously verify the validity of the transaction record, typically with transaction fees. It is also often the case that blockchains tend to release new supply (inflation) through the transaction validation process to network operators.

The fundamental difference in blockchains versus a traditional database is its censorship resistance, or immutability due to no individual or entity ever having enough control of the network to alter it.

Since no centralized authority (bank or government) controls the database, no one can erase or change the contents of it. This design is much better suited than traditional databases for systemically important things, like money and property.

What Is An NFT?

Before getting into the environmental impact, we should cover the basics. To start, the term ‘NFT’ stands for non-fungible token. All NFTs are unique and therefore can authenticate ownership of digital assets. NFTs come in all forms like artwork, photography, recordings, virtual real estate, e-sports or gaming tokens, and more. Essentially anything that can be converted into a file can become an NFT. This is revolutionary as it provides a way of certifying authenticity for digital artifacts and creates the concept of "digital scarcity" for the first time in human history.

What Is NFT Minting?

In most basic terms, minting is the process of issuing an NFT on the blockchain. Essentially it is the conversion of data into a digital asset recorded on the blockchain. Once recorded on the blockchain, it is stored and can be distributed via blockchain. Many NFTs are set up in a way that they cannot be edited, modified or deleted once recorded on the blockchain.

Are NFTs Bad For The Environment?

While NFTs don't directly harm the environment, some blockchains on which they are minted use more energy than others. This is where the environmental concern surrounding NFTs comes from. There are two primary ways, briefly mentioned earlier, in which blockchain transactions are confirmed: Proof of Work and Proof of Stake.

Proof of Work

The Bitcoin blockchain uses a Proof of Work mining method, which requires large amounts of energy. Proof of Work can exacerbate climate change by contributing to the atmosphere’s carbon dioxide emissions. For example, every transaction made on the Bitcoin blockchain requires more than 707 kilowatt-hours of energy. This is equivalent to about 23 days of electricity that the average American household uses.

Proof of Stake

Minting NFTs on a blockchain that uses the more modern consensus mechanism called 'Proof of Stake' is less energy intensive and more environmentally conscious as a result. The Proof of Stake method performs transactions (such as minting an NFT) without using much energy, but instead secures the network and confirms transactions based on ownership or stake. The blockchain platform Ethereum is making a change from Proof of Work to Proof of Stake in September 2022. This move is expected to reduce network energy emission by 99.95%.

Ways To Help The Environment

If you want to be more environmentally conscious within the NFT space, here are a few ways.

Buy Carbon Offset Credits

Another way to reduce your carbon footprint would be to utilize carbon offset credits. It is a tradable certificate/permit that represents the right to emit one metric ton of carbon dioxide or the equivalent amount of other greenhouse gasses. To buy them, most commonly people will contract directly with the developer of the project. These contracts most often come in the form of an emission reduction purchase agreement (ERPA). These contracts cost around $5 each and when purchased, the money goes directly to pay for a project to reduce greenhouse gasses.

Solutions On The Horizon

Furthermore, there are other environmentally conscious solutions on the horizon. This includes the utilization of renewable energy, creating more efficient protocols, as well as carbon footprint offsetting. The creation of more sustainable cryptocurrencies as well as the modification of existing cryptocurrencies is already in the works. For example, Ethereum 2.0 is being developed to create a more secure, scalable and sustainable version of the already existing Ethereum blockchain. As mentioned, this includes an upgraded Proof of Stake model, moving away from the previously utilized Proof of Work model.

Other Green Blockchains To Consider

While innovation is amongst us, there are already a few green cryptos available. Most of these use the Proof of Stake or Proof of Space method. Proof-of-space, used by the Chia blockchain, is a consensus mechanism that uses unused hard drive space.

NFT Sustainability

While NFTs have evoked controversy, the underlying technology that enables digital provenance is truly transformative. Also, while there is controversy surrounding the carbon footprint of using NFTs, innovations will undoubtedly remove these barriers.

Overall, NFTs can be fun to get into and have the potential to provide large returns. However please remember that millions of NFTs are made every day, and the chances of making millions are fairly unlikely. If you want to dive into the world, please do so at your own risk, and remember not to spend any money in anticipation of making it back.


Q: Is there an eco-friendly NFT?
A: Yes there are eco-friendly blockchains that utilize operating methods other than proof of work, such as proof of space and time. Furthermore, there are eco-friendly NFT marketplaces that allow users to buy and sell digital assets.

Q: How does cryptocurrency affect the environment?
A: In essence, via carbon emissions. As it stands currently, the amount of computer power necessary to ‘mine’ cryptocurrency is alarming to some. Various companies are working dilligently to reduce the amount of computing power necessary. One method is ‘Proof-of-Stake’ which you can read more about in our article on Esports.