Paintings by local artists were traditionally often dismissed as insignificant since they could be easily copied or falsified. Then came NFTs (Non-fungible tokens). Artists can buy NFTs to safeguard their digital assets, such as paintings, and retain ownership in the same manner that genuine artworks in galleries are protected. NFTs make digital assets unique by establishing a one-of-a-kind digital signature that certifies a person’s rights and enables them to be bought and sold using cryptocurrency, just like any other non-fungible asset.
There was a time when art galleries and museums containing physical pieces of art made by renowned painters were a place of fascination for people. Today, people are becoming digital artists as a result of the internet’s digitalization of everything. Thanks to safe and accessible internet services like Spectrum Internet®, any artist may become famous and generate money from his or her work. Spectrum offers its clients a smart and efficient connection that helps them to stay ahead of the game of smart working and discover new ways to grow and make money online, such as an online artist.
Isn’t it amazing how intriguing this all sounds? However, it is not all roses and rainbows, since NFTs pose some major environmental risks. One of the most significant is their extensive use of energy. Let’s take a closer look at how NFTs harm the environment in order to acquire a better grasp of the problem and possible solutions in the sections below.
How do NFTs Work?
NFTs are hot, but their influence on our climate can be far hotter. NFTs have a long history, dating back to 2017 when American company Larva Labs released CryptoPunks, a collection of collectible digital characters traded via NFTs that serve as a decent introduction to the technology. Today there are many NFTs that are even more expensive than your house, or maybe the houses of your many relatives combined!
NFTs are built on the same blockchain technology that is used to create bitcoin. It makes use of Ethereum’s ERC-721 and ERC-1155 standards. These guidelines offer a standardized platform for non-fungible tokens, enabling the creation of a quick and secure transaction system.
How Exactly are NFTs Bad for the Environment?
The issue with NFTs isn’t what some are dubbing the “Evolution of Art Collection” or the fact that you can easily copy the million-dollar file for nothing. The real problem is that all these types of crypto transactions require a massive amount of energy due to the high-end computers required to sell, trade, and store cryptocurrency.
Some experts even report that these transactions can take as much energy as is required by a small country! For example, the annual energy consumption of Ethereum used to process its crypto transactions, is roughly equal to the annual energy consumption of Nigeria. And of course, all this power consumption can be translated into carbon emissions since most of the energy is coming from fossil fuels and not from renewable energy resources. That is why some artists have even stopped selling NFTs, given their harmful environmental impact.
What NFTs Use Lesser Energy?
While NFTs can have a significant negative impact, there are certain NFT sources termed sidechains that have a lower impact. Then there are some that purchase carbon offsets in order to be more ecologically responsible. However, most activists urge the usage of clean energy, which means that most, if not all, bitcoin machines should run on renewable energy sources like wind, solar, and hydropower. Let’s have a look at the details of these sustainable NFT sources:
Sidechains have proven critical for scaling and interoperability of current blockchains such as Bitcoin.
According to research, implementing a sidechain lowers Bitcoin’s price volatility, increases its efficiency, and improves its use as a transaction instrument and a diversifier. These gains can be attributed to the sidechain’s potential to accelerate money circulation by reducing block validation times and increasing the scalability of Proof of Work and Bitcoin payment systems. According to studies, the sidechain liquid network led to a less energy-intensive and, as a result, less polluting Bitcoin system.
It is self-evident that the non-renewable energy sources are based on carbon and its derivatives which when burnt release a large amount of greenhouse gas into the air. Moreover, when these fossil fuels are burnt, they produce Nitrogen oxides that contribute to the formation of smog and acid rain.
Renewable energy resources on the other hand are the ones based on natural resources like solar energy that won’t be depleted and that aren’t harmful to the environment.
Some NFT firms are moving away from Ethereum in favor of a more long-term solution like Tezos. Dapper Labs is one among them, with OneOf, an eco-friendly music-focused NFT platform including artists like Doja Cat, John Legend, and Quincy Jones. OneOf is not going to run on Ethereum. Tezos will be used instead.
The Bottom Line
While NFTs seem to be a fascinating technology opening up doors for a huge amount of cash for several digital artists, there are some serious hazards to the environment caused by them. Even if some companies are moving towards Tezos and other sustainable sources, more NFTs still need to make their transitions sustainable. And until then, one may argue that NFTs are excellent for artists but harmful to the environment and that they are just another flex for buyers with extra cash.