THE UNSUSTAINABLE PRICE OF ETHEREUM: ARE NFTS BAD FOR THE ENVIRONMENT?
Source: Market Realist
NFTs are really being quite the emotional rollercoaster of the year. You know, besides that small unimportant global pandemic going on... But now in all seriousness, this year we have seen NFTs skyrocket as the fastest growing market ever, revolutionize the world of art, become the new age theft, mysteriously disappear, and begin to crumble as prices plummet.
What's next? Will they evolve into higher beings, communicate among them, upgrade and create new operating systems so that they no longer are bound to physical servers, and then leave humanity behind as they migrate to the place where "everything else is"?
Just in case you were living under a rock in 2013, that was a reference to the technological dystopian utopia cinematic masterpiece, Her.
Source: Best Practice Biz
And you know what? Maybe it wouldn't be that bad if NFTs managed to transcend corporeal bounds and physical servers, because then we wouldn't have to worry about their carbon footprint, and how it turns out they are humongously bad for the environment!
Apparently, the electricity required to support a single Ethereum transaction (Ethereum is the cryptocurrency used for NFTs) ascends up to 70.32kWh, or for those of us who were never really all that into science, the amount of electricity that could power a U.S. household for 2.5 days. Now that may not sound like much, but that is simply ONE transaction. Add it all up, and the energy used up by NFTs annually is that of a small country.
Lately, this exorbitant energy consumption resulting from mining (mining is the name of the process that uses advanced cryptography to check whether transactions are valid, it ensures the system is safe and keeps a record of it all transactions) has been turning quite a few heads, and not in the direction NFT enthusiasts would like. The criticism from environmentalists is starting to grow stern, strong, and loud. Could it even be getting in the way of the wonder market's growth?
ArtStation, for example, announced its plan to launch a new NFT platform, and promptly received so many complaints, they decided to apologize and postpone the project until they can find a solution that is equitable and ecologically sound.
Source: Time Magazine
However, there are ways in which the NFT world can become environmentally friendly:
First and foremost, ensure that the blockchain is powered by renewable sources, which is really quite a doable thing. Crypto miners gravitate to where energy production is cheapest, and in doing so, oftentimes end up using non-renewable energy. BUT, countries like Iceland and Norway, where most, if not all, of the electricity, comes from renewable sources, do actually have rather cheap geothermal and hydroelectric energy. The low temperatures being an added bonus to reduce costs as computer servers can be naturally cooled down.
The second step towards a sustainable NFT world is to switch from Proof-of-Work (PoW), which is the algorithm used by most blockchains, including Etherium, to Proof-of-Stake (PoS). You'll be asking yourself, what the hell does this mean? PoW and PoS are both systems for validating blockchain transactions. PoW's is an energy-intensive mining operation, while PoS does not actually consume any electricity because the ledger, or the transaction, is secured through users "staking" their own cryptocurrency tokens.
SO, bottom line is, in this day and age we simply can't afford as a society, to not take into account the environmental costs of our actions. We don't know about you, but we miss spring and autumn. Climate change is no joke, it's not going anywhere, and it's not looking like NFTs are going anywhere either.
If the market keeps growing at such an extravagant speed, then NFTs need to resettle into a carbon neutral virtual lifestyle ASAP. We know that with these sort of issues, it's not a matter of if anymore, it's a matter of when. So for god's sake, what are we waiting for?