Do NFTs contribute to climate change?

Thursday, February 17, 2022
By Jacob Alabab-Moser

NFTs, or non-fungible tokens, which let users create digital "originals" of their items, are indirectly linked to increases in carbon dioxide emissions given their sale on cryptocurrency blockchains like Ethereum.

To verify an Ethereum transaction, cryptocurrency miners must solve a complex puzzle requiring energy-intensive computing. Ethereum emits nearly 54 megatons of CO2 annually. If it were a country, its carbon footprint would rank 55th of 209 nations listed by Worldometer.

NFTs constitute around 1% of Ethereum transactions. Still, the average NFT transaction has an estimated carbon footprint equivalent to more than a month’s worth of electricity for a person living in the EU.

Proposals to reduce the carbon footprint of NFTs, and cryptocurrency transactions generally, include carbon offsets, alternative verification methods that do not require energy-intensive puzzle-solving, and a layered blockchain that permits all but the final transaction among users to happen "off-chain."

This fact brief is responsive to conversations such as this one.
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