NFTs: A Red Flag for the Environment

Non-fungible tokens (NFTs) made their presence in our life back in 2015. It is another level of advancement in technology with a broader concept of property ownership, yet limited in control with a high impact on the environment.

NFTs are built using the same programming used in cryptocurrencies and are based on blockchain technology. Physical currency and cryptocurrency are fungible and can be traded and exchanged equivalently. In contrast, NFTs cannot be exchanged and traded as they have unique properties, and exchange is possible through cryptocurrencies. The rapid increase of NFT transactions has led to public attention towards the blockchain infrastructure that has high levels of CO2 emissions.

NFT key features are: 1) it is a digital asset and comes in forms of art, music, and games by blockchain technology, 2) it cannot be manipulated, and 3) NFT exchanges are only possible with cryptocurrencies like Bitcoin and Ethereum on specific websites.

Those who are interested in crypto trading and enthusiastic about collecting artwork often use NFTs. Here are some categories of using NFTs:

Digital Content: NFTs are potential digital content that by buying one, the NFT acts as a certificate of authenticity for that specific content. It consists of videos, GIFs, tweets, art, photos, virtual real estate, etc. Content creators see NFTs as a significant path for making profits because NFTs give creators the economy that they have ownership over their content and can publicize their work.

Gaming Items: Game developers find NFTs beneficial by allowing players to purchase online items for their characters, such as avatars, game rewards, weapons, lands, vehicles, and more. This gives players real value and allows them to feel connected in the blockchain and transfer or trade the items.

Domain Names: NFTs assist your platform with easily remembered domain names, fast and valuable IP addresses, and simplify ways for cryptocurrency transactions.


NFTs and Environment

NFTs and Environment

NFTs have significant commercial and financial value in the art market and have enabled digital transactions with high security and efficiency. Although NFTs are a revolution in the digital world, due to their intensive energy consumption within their blockchain technology, they have high costs for the environment. The energy consumption starts from the verification process, multiple mining devices to verify blockchain transactions, and transaction execution. Ethereum has been the pioneer choice for NFT transactions in comparison to bitcoin. Bitcoin’s network has more energy consumption than Ethereum due to requiring seven mining devices for each plugged-in and consuming energy 24 hours.

The research found that buying an NFT artwork is equal to one EU household’s average monthly energy consumption. The energy-intensive consumption of Ethereum, Bitcoin and other blockchains leads to further CO2 emissions and climate change disasters. This will limit our efforts to keep global temperature below 2 °C. One single Ethereum transaction emits 85.47 kgCO2, and there were 942,812 NFT sales in the month preceding October 2021. The significant rise in NFT transactions has been responsible for the increase in Ethereum’s carbon emissions along with other blockchain networks used for NFTs. 

NFT sales increased from approximately $1 billion in Q2 2021 to over $10 billion in Q3. This rapid increase has notably worsened the overall environmental impact of NFTs. The scale of the problem is increased when the entirety of all Ethereum transactions are considered, not only NFTs. The entire Ethereum network is estimated to produce 36,920,000,000 kgCO2. Ethereum is only one type of blockchain, meaning that the total blockchain future mortality rate is likely to be much higher. The social criticism against the artist’s carbon impact was partially responsible for pushing Ethereum to upgrade its network away from its polluting proof-of-work model.

Digital currencies still are responsible for many times more emissions than NFTs. When compared with Bitcoin, which is approximately ten times more polluting than Ethereum per transaction (a single transaction causes 842.51 kgCO2 compared to Ethereum’s 85.47 kgCO2), Bitcoin will cause significantly more deaths for a much lower use rate. With an estimated annual carbon footprint of 83,440,000,000 kgCO2.

Scholars have warned about the growing negative impact of blockchain-related pollution, especially that caused by digital currency transactions. Recently, blockchain energy efficiency has rather improved, but the increase in blockchain transactions worldwide has increased the overall energy consumption and resulting emissions. Unfortunately, NFTs are now adding to this problem, and the increasing scale of the blockchain’s energy consumption has become a major global problem.



Change in design model: NFTs and blockchain are using a proof-of-work model that consumes high energy. Developers are encouraged to integrate proof-of-stake and proof-of-authority as more sustainable mechanism alternatives to less energy-intensive proof-of-work.

Regulations against proof-of-work: Governments should move forward by restricting energy-intensive models and ensuring that blockchain verification and transaction activities have less impact on the environment. The government can also increase tax on energy-intensive blockchain activities to impose more pressure on changing models to less energy-intensive ones.

Research and Development: Further R&D in blockchain and digital mining is needed by public and private sector investment and finding more ways to support the blockchain cycle through green and clean energy sources.



Photo: Immersion Imagery/Shutterstock


You might also like:

Social Business as a New Direction of Sustainability


Support us!

All your donations will be used to pay the magazine’s journalists and to support the ongoing costs of maintaining the site.


paypal smart payment button for simple membership

Share this post

Interested in co-operating with us?

We are open to co-operation from writers and businesses alike. You can reach us on our email at [email protected]/[email protected] and we will get back to you as quick as we can.

Where to next?

The Business Model Canvas: Startups DNA

Every young person has an idea, and no idea is a waste. It needs a framework to develop your business idea and reflect on your business model, market nature, target…

How is climate change impacting global health?

The effects of climate change on our environment have long been felt and thoroughly discussed. Scientists have, with much distress, pointed out the change in migratory patterns of various species,…

Aviation and Sustainability

Sustainable aviation practices can significantly reduce Greenhouse Gas (GHG) emissions in the long run. However, the increasing volume of air traffic and the benefits in this sector have hindered sustainable…

Electrical Waste Treatment

Technology advancement should be followed with proper waste treatment and recycling to make it accessible and available for the next generations.