How Do NFTs Damage the Environment?

By Cheezem 9 Min Read

Each time an NFT is created, transferred, bought, or sold, a blockchain must process and store information on the public ledger. While the amount of data processed and stored is tiny, blockchains technology use huge amounts of power.

With sales of non-fungibles reaching $25 billion in 2021 alone, the popularity of NFTs has skyrocketed in recent years. Rewind just a year or two, and you’d have difficulty finding many individuals in the cryptocurrency space who even understood what an NFT was, let alone participated in the market. Now, owning and investing in non-fungibles has become a common interest among consumers with the introduction of NFT art, collectibles, game apps, and celebrity endorsements.

With integration into the metaverse and web3 becoming a reality, the future potential of NFT’s appears to be almost limitless.

The Big problem, however, is the environmental effect NFTs have. While they are purely digital, the energy consumed to generate, move, and burn an NFT is in orders of magnitude greater than people think, with blockchains like Ethereum requiring massive computing power to complete even simple operations.

For any NFT collector, investor, or creator, it’s critical to ask how NFTs affect the environment and understand the market’s challenges in becoming more sustainable. We’ll look at these problems and where NFTs are heading in order to overcome them.

What are NFT’s?

To understand why NFTs in their current form are not really environmentally beneficial, we must first understand how the technology works.

To put it another way, NFTs are digital tokens that, through a sequence of blockchain transactions, give someone ownership of a piece of art, such as a image, video or song. Traditional cryptocurrencies, like Bitcoin, are identical and interchangeable. NFTs, on the other hand, represent unique works of digital art which cannot be mutually exchanged. (In the same way you can transform a $20 bill into two ten-dollar bills but not a Picasso paintings for a Mona Lisa.)

Non-fungible tokens use blockchains to verify and guarantee asset ownership. These blockchains are maintained by millions to billions of computers all over the world, who collaborate to keep track of transactions and data.

Each and every token is unique and, in many respects, irreplaceable. With projects such as CryptoPunks and Bored Ape Yacht Club, most NFTs are upon the Ethereum blockchain, which has arguably started the non-fungible token market.

Every time an NFT is minted, transferred, purchased, or sold, a blockchain must process data and write to the public ledger. While the amount of data being processed and stored is small by modern standards, blockchains require a significant amount of energy to make that transaction possible.

Who processes these data? or more specifically Who helps the Blockchains Process these data?

They are the Miners, if you may have heard, about Crypto Currency Mining.

Cryptocurrency Mining and Energy

Like their crypto counterparts, NFTs have one common drawback: they both consume a lot of power. Bitcoin ‘mining’ already accounts for 38 million tons of CO2 every year, more than the carbon footprint of Slovakia.

The problem is that blockchains like Ethereum still employ a proof-of-work consensus mechanism. This implies the blockchain’s computers must compete to solve difficult cryptographic puzzles, with the first to finish winning gas rewards.

Miners are constantly mining Cryptocurrencies in order to earn rewards, which are typically in the form of Crypto Coins. They are able to sell these Crypto Coins for a profit.

However, since, there is huge competition, this is where the problem with NFTs arises. The blockchain’s growth in size forces miners to invest in more powerful hardware to find solutions for proof-of-work puzzles. This creates a scenario in which miners are constantly consuming more power from the grid.

To put it another way, a Daily Bitcoin’s carbon footprint is comparable to watching 57,000 hours of YouTube videos each day. Its daily electricity use is roughly equivalent to the power consumption of an average American household over 25 days. NFTs have an identical carbon footprint because they require energy-intensive computer transactions to authenticate and sell the art.

While, a typical miner can spend between $15,000 to $30,000 dollars on their mining equipment. Mining cryptocurrencies uses lots of energy and one of the biggest expenses for a Crypto Miner is his Electricity Bill.

According to a recently released report, each Bitcoin transaction consumes 1,173 kilowatt hours of electricity. That’s the amount of energy that can power the typical American home for six weeks, according to the study.

How much energy do NFTs use?

It’s difficult to precisely quantify how much energy and NFTs impact the environment. The facility is only a few years old, yet there has been no thorough scientific research to assess its influence.

Nonetheless, estimations have been made. Creative Technologist Memo Akten ( was concerned by the environmental effect of his entrance into the world of NFT painting, so he decided to follow the blockchain activity linked to 18,000 distinct NFT artworks.

Given that energy is consumed not just while the token is minted but also whenever someone places a bid, transfers the token, buys or sells it, this proved to be a difficult task. Not to mention that an NFT may exist solely of one or two NFTs yet each with dozens of “editions,” as we say in America.

In order to push for more sustainable practices in the NFT sector, Akten launched the Crypto Art WTF, which outlined his findings ( While the estimates were admittedly subjective, he discovered that for a month, the average NFT consumed nearly as much energy as an average EU citizen living for one month.

Will the Energy Problem of NFT’s ever be solved?

However, although NFTs have a significant environmental effect now, experts believe that in the future they can become more sustainable. Beginning with reducing the impact of the blockchain technology in use.

Most miners believe the issue is best resolved by switching to a different consensus method, despite the fact that there has been pressure for miners to minimize their energy usage as much as possible.

The proof-of-stake model, which is currently the most popular, entails “stakers” locking up their crypto for a certain duration, usually in pools with other people. Staking entails allowing validator nodes to have a review at a block while it’s being added to the blockchain. Those who stake in that node will get a reward as a result of their participation.

However, with blockchains like Solana and Cardano now having their own NFT marketplaces and they are already using this, Ethereum is in the process of employing this model. These networks are anticipated to be theoretically faster than Ethereum in its current form, use considerably less energy, and have significantly lower fees.

Another approach to reduce the environmental effect of NFTs is to round up transactions and only interact with the blockchain on a periodic basis.

Also called rollups, they are networks that run on top of Ethereum and other blockchains and speed up transactions significantly while also allowing gas fees to be a fraction of what they are on Ethereum.

Companies like Immutable X ( are now appearing, which is a layer-2 on Ethereum for NFTs that has no gas costs, quick transactions, and is deemed carbon neutral. Layer-2s like this will aid Ethereum and other blockchains in handling greater usage as NFTs become more popular and are used in gaming and the metaverse to reduce carbon emissions.

Share This Article
Leave a comment