How Do NFTs Affect The Environment?

9 min readMar 1, 2022

When an NFT is minted, transferred, bought, or sold, a blockchain processes some information and writes it to the public ledger. And, even if the amount of data being processed and stored is small, the nature of blockchains means that it can still consume a significant amount of energy.

In the last 18 months, the popularity of non-fungibles has skyrocketed, with sales of non-fungibles alone expected to reach over $25 billion in 2022. Back a year or two, it would be difficult to find many people in the crypto space who even knew what an NFT was, let alone were involved in the market. Owning and investing in non-fungibles has now become a mainstream obsession, thanks to the introduction of NFT art, collectibles, gaming applications, and celebrity endorsements.

Not only is the market almost as large as the traditional art market, but the future potential appears to be almost limitless, with integration into the metaverse and web3 a foregone conclusion.

The elephant in the room, however, is the environmental impact of NFTs. While purely digital, the energy required to create, transfer, and even burn an NFT exceeds what most people expect, with blockchains such as Ethereum requiring significant computing power to complete even minor tasks.

For any collector, investor, or creator, it’s critical to understand how NFTs affect the environment and the challenges the market faces in becoming more sustainable. So, in this blog, we’ll look at these issues and see where NFTs are going in terms of overcoming them.

Understanding how NFTs work

To understand why NFTs in their current form are not exactly green, we must first understand how the technology works.

Non-fungible tokens use blockchains to verify and guarantee asset ownership. Rather than existing in a single location, these blockchains exist as distributed computers that collaborate to keep track of transactions and data.

Because they are non-fungible, each token is unique and essentially irreplaceable. As of now, most NFTs rely on the Ethereum blockchain, which can be credited with launching the non-fungible market with projects such as CryptoPunks and CryptoKitties.

Mining and greenhouse gases

This is due to the fact that blockchains such as Ethereum continue to rely on what is known as a proof-of-work consensus protocol.

This means that the blockchain’s computers must compete to solve complex cryptographic problems, with the first to do so rewarded with gas fees. This is referred to as “mining.”

And it is this mining that is the real issue with NFTs. To remain profitable as the blockchain grows in size, miners will invest in increasingly powerful hardware to solve more proof-of-work problems. As a result, miners are constantly increasing the amount of energy they consume from the power grid.

While most countries are looking for ways to create a more sustainable power grid, the reality is that a significant portion of electricity is still generated using non-green sources such as coal. These energy sources produce greenhouse gases, which contribute to climate change.

How much energy do NFTs use?

It is difficult to estimate how much energy NFTs consume and how they affect the environment. The space is only a few years old, and no true scientific study has been conducted to assess its impact.

Nonetheless, projections have been made. Concerned about the environmental impact of its foray into the world of NFT art, creative technologist Memo Akten (http://www.memo.tv/) decided to trace the blockchain activity relating to 18,000 different NFTs artworks. This proved to be a difficult task because energy is used not only in the minting of the token but also whenever someone bids, transfers the token, buys, or sells. Not to mention that a user may have only a few NFTs but each with dozens of “editions.”

Akten created the (now defunct) website cryptoart.wtf (http://cryptoart.wtf/) detailing his findings in order to encourage the NFT space to adopt more sustainable practices. While the estimates were admittedly unscientific, he discovered that the average NFT came close to the average energy consumption of an EU resident for an entire month. Akten hypothesised that even if he overestimated some factors, the energy consumption would still be enormous.

Proof-of-stake blockchains

While there has been pressure on miners to ensure that their energy supply is as environmentally friendly as possible, most believe that the issue is best resolved by switching to a different consensus protocol.

The proof-of-stake model entails “stakers” locking up their cryptocurrency for a set period of time, typically in pools with other participants. Staking entails donating your cryptocurrency to validator nodes, which will then conduct a review of a block being added to the blockchain. Those who have a stake in that node will be rewarded as a result.

While Ethereum is in the process of transitioning to this model, it is already in place with blockchains such as Solana and Cardano, which are now seeing the opening of their own NFT marketplaces. These networks are theoretically faster than Ethereum in its current state and use much less energy.

However, the proof-of-work system is still regarded as the most secure consensus model, with many believing that Ethereum’s tokens, such as ERC-721, are the gold standard of NFTs.

Layer-2 solutions

Another way to reduce the environmental impact of NFTs is to round up transactions and only interact with the blockchain on a regular basis.

These networks, known as “rollups,” operate as a separate layer on top of Ethereum and other blockchains, significantly speeding up transactions while also allowing gas fees that are a fraction of the cost of Ethereum’s. They can be compared to a crowded bus, transporting many blocks at once, rather than a cab, which transports one passenger at a time.

Immutable X (https://www.immutable.com/) is an example of a layer-2 on Ethereum for NFTs that has no gas fees, fast transactions, and is considered carbon neutral. Layer-2s like this one will assist Ethereum and other blockchains in handling increased usage as NFTs become more common and find use in gaming and the metaverse, reducing carbon emissions.

The NFT space is not sustainable in its current form. Proof-of-work blockchains, such as Ethereum, are simply unsuitable for the demand they now face, resulting in high gas fees and failing to meet their environmental responsibilities. Fortunately, solutions exist, and they are now beginning to emerge, benefiting both blockchain users and the planet as a whole.

PulseChain the Energy-Efficient Blockchain

PulseChain has the potential to rescue dapps that are suffering from high fees.

PulseChain is a new blockchain-based cryptocurrency ecosystem that claims to be energy-efficient to Ethereum. Furthermore, the PulseChain platform launch is said to be the largest airdrop, or initial distribution, in blockchain history.

To be clear, PulseChain is the network, and Pulse (PLS is the ticker) is the PulseChain system’s native coin. Richard Heart, who was also involved in the HEX project, leads the PulseChain project. PulseChain is essentially an Ethereum hard fork that converts a snapshot of the entire Ethereum blockchain into a Proof-of-Staked Authority blockchain. With reduced transaction fees and faster transaction times.

The PulseChain team has highlighted several features that it believes will distinguish the project from Ethereum. It will be more energy-efficient, faster, and less expensive than Ethereum. It’s worth noting, however, that Ethereum is undergoing an upgrade that may alleviate some of its current energy issues. Because Ethereum’s ETH token has no maximum supply cap, holders face the risk of inflation. The official cryptocurrency of PulseChain is PLS, and it is intended to be a deflationary asset. Using a token burn mechanism to eliminate the risk of PLS inflation. Furthermore, validators will only be paid in fees, with 25% of the fees being burned to reduce circulating supply. Again, it is critical to note that Ethereum’s EIP1559 will implement a burn mechanism similar to the one proposed by PulseChain.

Furthermore, PulseChain has stated that it wants to reduce the load on the Ethereum network and has no intention of killing or directly competing with it. Furthermore, it appears that the chain was initially designed to allow HEX holders to conduct transactions while avoiding Ethereum gas fees.

The PulseChain network is currently in testing and is expected to launch soon, though no specific date has been set. Interestingly, a 30-day sacrifice period was established prior to the launch, giving investors the opportunity to convert some of their crypto assets, such as ETH and HEX, to PLS once it goes live.

PulseChain the Ethereum Hard-Fork

PulseChain, as previously stated, will be a hard fork of the Ethereum blockchain. As a result, it will replicate all existing ERC-20 tokens and NFTs to PulseChain. Users will effectively receive a copy of all their current assets on PulseChain, and these tokens will be available to those who do not invest in PulseChain. Importantly, PulseChain’s native token and all coins on it are designed to begin with no value in order to avoid benefiting from the efforts of others.

It is not only being copied, but it is also being improved to become a delegated Proof-of-Staked Authority blockchain similar to Binance Smart Chain or EOS. As a result of using a set of validators, users will avoid paying high gas fees when transacting on PulseChain. This model allows for optimisation, which reduces block times to around 3 seconds. When compared to Ethereum’s current 13, this is a fourfold improvement. In layman’s terms, PulseChain is a blockchain similar to Binance Smart Chain. Giving users full Ethereum compatibility as well as a snapshot of the Ethereum blockchain. Importantly, BSC and Polygon are forks of the source code rather than forks of the Ethereum blockchain. PulseChain is a direct copy, similar to Bitcoin Cash in that it is a copy of the entire chain.

PulseChain will revitalise Dapps

The ability of PulseChain to take decentralised applications (dapps) that are currently suffering from fees on Ethereum and revive them is a key factor that will underpin the future success of PulseChain.

Due to high gas fees, blockchain games and DeFi applications running on Ethereum have traditionally suffered. As a result, there has been a surge in activity on alternative chains such as BSC and Polygon, where fees and transaction times are significantly reduced. Because PulseChain will have a copy of Ethereum assets and smart contracts, dapp developers can simply relaunch on PulseChain.

For example, a blockchain game on Ethereum that has lost users due to high gas fees could easily relaunch on PulseChain. Offering its users faster and less expensive actions could effectively revitalise the dapp and its activity. The same is true for a DeFi exchange like Uniswap. The same service as before, but with lower fees and faster transactions. With dapp games like Axie Infinity abandoning Ethereum in favour of its custom-built Ronin sidechain or Aavegotchi migrating to Polygon. They may be able to offer users lower fees and faster transactions on these alternative chains. As a result, usage is at an all-time high.

In Summary

It is clear that NFTs are more than a passing fad and are here to stay. And there are numerous reasons for this. They’re a great source of income, open up new opportunities for digital artists, create a new gateway for developers to create and innovate using the technology. Now that you understand the fundamentals, you can delve deeper and reap all of the benefits for yourself.

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