NFTs, without question, have revolutionized the world of art. However, what does it mean for the world as it revolves around the sun? The art, science, and climate activist community have all raised questions regarding the environmental impact of NFTs. It is true that anything that is nascent will have its share of criticism and imperfections.
Will NFTs be able to counter this criticism and handle it in a way that it does not remain detrimental to the environment and the earth of the future? If so, what is the way out?
Let us find out in the oncoming paragraphs.
What are NFTs?
To understand the environmental impact of NFTs, we need to understand what these NFTs are! Non-Fungible Tokens, commonly abbreviated NFTs, are digital representations of unique entities that exist on the distributed and decentralized ledger called the blockchain.
The uniqueness and the limit in numbers, and above all the nonfungibility and integrity of these NFTs have made them great candidates for collectible art and for representing anything that needs to be identified as unique.
Come to think of it, this was one of the biggest problems that the digital world was facing. You could probably have a study wallpaper without any idea on who clicked it. You might not even possess a legal download of that particular photograph or video. While some ecosystems and environments like iTunes solved it, there is still a long way to go.
The introduction of NFTs has effectively addressed this issue. You could still make copies of an artwork but it will still be possible to identify the original and that could help in preserving its collectible status. Since the entire data is stored on the blockchain, it also helps maintain a transparent record of the prices, the ownership, and every other detail regarding that piece of art.
So… Where does the environment come in?
As of today, most of the artworks and creations as NFTs are traded on the Ethereum blockchain. Ethereum is known for its notorious nature of consuming a lot of electric power, making it one of the least efficient blockchains.
It cannot be denied that Ethereum has its own set of advantages in being flexible and accommodating. It was one of the reasons why blockchain is preferred for everything right from decentralized finance to composing smart contracts. However, when we are looking at a substantial increase in the number of people who will be using the native token and the blockchain, we will need to question the environmental impact.
Where exactly is the impact?
It has been estimated that the amount of electric power used by Ethereum is comparable to the electric consumption of some countries like Qatar and Hungary.
Even bitcoin has the same complaint of consuming a lot of electric power. Some studies suggest that the electricity consumption of bitcoin miners in China alone amounts to the electricity consumption of the Czech Republic and the carbon emissions of the country of Sudan.
It is to be noted that one of the reasons Elon Musk stated for Tesla not accepting bitcoins is the environmental impact it has. He also, parallel to this, stated that there will definitely be a lookout for more energy-efficient blockchains.
If the founder of Tesla has been so particular about being on the lookout for the next best blockchain, it means that people would still like to capitalize on the advantages brought about by the technology in terms of its universal reach, swift transactions, and of course, low costs.
Until recently, blockchains were mostly branded or marketed as being efficient and being fast. However, lately, a lot of blockchains have started to position themselves as being carbon negative or at least being efficient compared to the so-called mainstream blockchains.
Even the world of NFT has its own alternatives. However, the global familiarity with Ethereum makes it difficult for people to move out of it. In addition, since some of the most prominent NFT marketplaces are built on the atrium blockchain, it becomes even more difficult to completely move their entire ecosystem.
Should NFTs stop their operations? Definitely not! Even the technology that we take for granted today like the internet had its own share of dot-com boom and dot-com bust. NFTs and blockchains are not an exception.
It is also to be taken into consideration that the bust happened when too many people started to use the internet as a mode of communication. NFTs are exactly at that stage. A lot of artists are embracing the new technology and are capitalizing on the global reach it provides.
It has also opened up possibilities even for people who are not into art and technology to create their own business in the NFT space by investing in NFT marketplace development.
With so many promising features for the future, it is just a matter of time before the blockchain technology evolves to become greener and more environmentally friendly. When that happens, NFTs will continue to grow bigger than ever.