Since 2021, Non-Fungible Tokens (NFT) have been at the forefront of digital art and graphic design. However, with the internet era promoting this new path for the digital market, one must consider if a risk to the planet is worth the lucrative rewards.
While NFTs started in 2014, they recently rose to prominence due to more celebrities, financial advisors, and entrepreneurs participating in cryptocurrency. As a result, everything from a screenshot of the first-ever tweet to a picture of a cartoon ape has increased immensely in value.
According to CNN, “NFTs transform digital works of art and other collectibles into one-of-a-kind, verifiable assets that are easy to trade on the blockchain.” NFTs have a lucrative incentive with the ability to get rich quickly through buying, selling and trading different pieces of digital art. According to Forbes, in 2021, NFTs reached a total value of $41 billion.
However, despite their financial reality, NFTs produce high levels of greenhouse gas emissions due to the energy level needed to operate. The “Proof of Work” consensus algorithm, a process in computer science used to achieve agreement on a single data value among distributed processes or systems, is the primary culprit for NFTs' environmental impact. This NFT transactional process takes around 340 kilowatthours to complete, which results in carbon dioxide emissions. Carbon dioxide is a greenhouse gas that traps and radiates heat. A chain reaction is created, that causes the trapped heat to melt the ice caps, which rises the ocean levels and leads to immense flooding.
According to the U.S. Energy Information Administration, the average American household uses 11,000 kilowatthours per year. Furthermore, a single kilowatthour produces .85 of carbon dioxide emissions. Which means in merely 33 NFT transactions, one could not only go beyond a household's yearly electricity usage but also emit 9,537 pounds of carbon dioxide into our atmosphere.
According to Climate.gov, carbon dioxide levels are higher today than in the last 800,000 years. In addition, according to Statista, approximately 572,433 NFTs have been sold throughout the world within this past year. As a result, 165,433,137 pounds of carbon dioxide have been emitted this year alone. With the NFT market continuing to grow on a daily basis, a war between artists and environmentalists could be on the horizon.
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