The Environmental Impact Of NFTs
NFTs are gaining popularity, which means that they are also being scrutinized more closely, especially in relation to their carbon footprint.
Let me clarify:
NFTs don’t directly increase the carbon footprint for Ethereum.
Although Ethereum’s current method of protecting your assets and funds is energy-intensive, it is on the verge of improving.
Ethereum’s carbon footprint will improve by 99.95% once it is improved. This will make it more efficient than many other industries.
We’ll need to explain more so please bear with us.
It’s Not Uour Fault, NFTs
Because Ethereum is decentralized, the entire NFT ecosystem works.
You and others can verify that you have something. All this without you having to trust or grant custody to third parties who may impose their own rules. This also means that your NFT can be used in many markets and products.
Secure means that no one can copy/paste or steal your NFT.
This makes it possible to digitally own unique items and get a fair price. However, it comes with a price. Because it takes so much energy to maintain the qualities of blockchains such as Ethereum and Bitcoin, they are very energy-intensive. It would be easy to change Ethereum’s history in order to steal NFTs and cryptocurrency. The system would collapse.
Your NFT is worth the effort
There are a few things that must happen when you create an NFT.
- It must be verified as an asset on blockchain.
- This asset must be added to the owner’s account. This allows it to be traded or verified “owned”.
- Transactions that confirm the above must be added to a block, and “immortalized” on the chain.
- Everyone in the network must confirm that the block is “correct”. Because the network agrees that your NFT is real and exists, there’s no need to have intermediaries. It’s also on the chain, so anyone can see it. This is how Ethereum allows NFT creators maximize their earnings.
These tasks are performed by miners. They also inform the rest of your network about your NFT and who it belongs to. Mining must be difficult enough to make it a viable business. Otherwise, anyone could claim they have the NFT and then fraudulently transfer ownership. To ensure that miners act honestly, there are many incentives.
Mining can help you secure your NFT
Mining difficulties arise from the fact it requires a lot computing power to create new blocks within the chain. Blocks are not created only when they are needed, but consistently. They are created approximately every 12 seconds.
This is essential to make Ethereum tamperproof, which is one of the attributes that makes NFTs possible. The chain is more secure if it has more blocks. If your NFT is created in block #600, and a hacker attempts to steal it by altering its data, the digital fingerprint for all subsequent blocks will change. Anyone running Ethereum software could detect it and stop it happening immediately.
This means that computing power must be constantly used. This means that even a block containing zero NFT transactions will have approximately the same carbon footprint as if it contained them all, since computing power was still needed to create them. The blocks will be filled by other transactions, non-NFT.
Blockchains require a lot of energy right now.
Yes, mining blocks creates a carbon footprint. This is true for Bitcoin chains as well. But it is not the fault of NFTs.
Many mining activities rely on renewable energy or untapped energy from remote areas. There is also the argument that NFTs or cryptocurrencies have large carbon footprints. However, just because some industries are failing doesn’t mean that we shouldn’t try to improve them.
We are. Ethereum is changing to make it more efficient to use Ethereum (and NFTs by virtue) That’s been the plan since inception.
We are not here to defend mining’s environmental footprint, but to show how they are improving.
Since Ethereum was created, energy consumption of mining has been a major focus area for researchers and developers. The goal has been to replace it as soon possible.
This vision is already being realized.
Eth2: A greener Ethereum
Eth2 is a series that replaces mining with staking. This will eliminate computing power as a security feature and reduce Ethereum’s carbon footprint to 99.95% . To secure the network, this world sees stakers contributing funds to the project instead of computing power.
The energy cost of Ethereum will be multiplied by how many nodes are in the network. The cost of running a home computer costs approximately 525kWh annually if there are 10,000 nodes on the network. This is 5,250,000kWh 1 a year for the entire network.
This can be used to compare Eth2 with a global service such as Visa. 100,000 Visa transactions consume 149kWh 2. . Eth2 would cost the same transaction 17.4kWh or 11% of total energy . This is without taking into account the many optimizations that are being done in parallel with Eth2, such as rollups. It could cost as low as 0.1666666667kWh to power 100,000 transactions.
This improves energy efficiency and preserves Ethereum’s security and decentralization. While many other blockchains may already have some form of staking, they are not as secure as Ethereum’s. The system will be more secure if there is more decentralization.
To help you understand Eth2 energy consumption, we have provided a basic Visa comparison. In practice, however, it is not accurate to compare transactions based on transaction volume. Ethereum’s energy output depends on the time it does them. The energy output of Ethereum would not change if it did more transactions in a given time period.
Remember that Ethereum is more than just financial transactions. It’s also a platform for application development.
This is already happening. In December 2020, the Beacon Chain received its first upgrade. This is the basis for stakeholder participation and provides the basis for staking. Next, energy efficiency can be achieved by merging the existing chain, which is secured by miners, into a Beacon Chain, where no mining is required. Although time frames are not yet known, it is expected that this will occur sometime in 2021/2022. This is also known as the merging (formerly called the docking).