NFTs have created their fungible climate problem; destroying our planet

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Making NFTs requires colossal amounts of computing power, and that means greenhouse gases which can be a huge climate problem.

In case you missed it, NFTs (non-fungible tokens) have become a thing lately, and the market for them is growing fast. Whether they are in the form of photos, digital art, videos, audio files – or even those Awkward Family Photos – the market for NFTs is increasing at a breathtaking pace. From Grimes to LeBron James to Jack Dorsey, just about anyone in any industry, is churning them out; and many NFTS are going for a very pretty penny.
So why buy something non-fungible when you can buy a fungible item such as a unique artistic masterpiece or the epic white dress that Marilyn Monroe wore in “The Seven Year Itch?” Well, fans and buyers of NFTs would tell you that they are a unique digital asset that can be traced to the original owner. After all, reproduce a Modigliani or a Fendi. The same logic applies to a baseball card from decades ago, or a recreation of Lil Nas X’s “Satan” shoes.
But NFTs are stored and verified through the use of blockchain technology, which to date makes them impossible to fake – and therein lies a problem, as chatter about collective climate impact of NFTs is growing almost at the rate of their value.
All the digital transactions and algorithms that allow for the running, monitoring and verification of blockchain, like bitcoin trading, amount to what critics say is a massive carbon footprint. According to at least one tracker that estimates the energy consumption of the global bitcoin market, the trading of bitcoin alone is requiring more and more power. One recent study showed that the bitcoin market uses as much power as the all the world’s data centers; another study suggested the industry needs more energy than producing the globe’s total gold and copper.
Now the focus is turning to the energy consumption that’s fueling the rapid rise of NFTs; one profile on Wired, for instance, describes the shock of one NFT artist when he learned that one of his pieces of crypto-art needed as much power as his studio consumed over two years.
Moreover, as Justine Calma wrote for The Verge last month, “Famed auction house Christie’s just sold its first “purely digital piece of art” for a whopping $69 million. For that price, the buyer got a digital file of a collage of 5,000 images and a complex legacy of greenhouse gas emissions.”
Estimates of how much energy an NFT needs are all over the map. One observer suggested that a collection of Grimes’ NFTs used as much as a citizen of the EU would use in 33 years. Another concluded that a single-edition NTF used as much energy as a typical European household. We’re not talking about online banking or even binging on Netflix – a lot of energy is needed to power these digital masterpieces, and critics have also pointed out that the data centers that enable them to exist are often in countries where regulations are lax at best.
Headlines like “Ukraine to Set up a Large-Scale Crypto Mining Data Center in a Nuclear Power Plant” don’t exactly paint this world in the most flattering light, either.
The bottom line is that more artists who produce NFTs, as well platforms on which they are sold and traded, know that they have a climate action challenge on their hands – and they are beginning to respond in kind.
For instance, Nifty Gateway, one platform on which NFTs are sold, says it’s working on a plan so that it can stay compliant with the Paris Agreement – details on how that will happen are currently vague. There’s also talk of a global “Crypto Climate Accord” that could help reduce the industry’s carbon intensity. The worlds of blockchains and NFTs know action needs to take place, but the total amount of emissions for which this sector is responsible means there is no easy solution such as carbon offsets, which Gizmodo’s Brian Kahn has described as “at best, self-deception and at worst, greenwashing.”

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