ARE NFTs GETTING OUT OF HANDS?
Mining is the technique that uses an enormous amount of computer power and energy to “mine” artwork on the blockchain network and become the legitimate owner. Ethereum, the decentralized blockchain that supports NFTs (Non-fungible tokens), employs a purposefully ineffective PoW (proof of work) technique to produce these virtual assets.
Advanced systems can create an infinite number of new block creations per second. The first person to find the solution receives their unique asset, which is then uploaded to the network. As the value of crypto rises and more sophisticated systems attempt to compute them, they become increasingly complex to solve. To catch up, it needs increased computing power, huger facilities, and more powerful cooling systems, as well as an increasingly expanding environmental impact.
This level of effort is deliberate; it fosters competition and protects against security risks. However, the pollutants produced as a result of these activities contribute greatly to the deterioration of the atmosphere and climate of the Earth.
Cryptocurrency Climate Fears
The increasing concerns of NFTs’ climatic impact coincide with mounting proof of crypto’s negative consequences.
Ethereum is presently expected to use 44.94 TWh of electricity annually, equal to the annual power usage of countries such as Hungary and Qatar. It emits around 21,350 kilograms of carbon dioxide per year, equivalent to Sudan’s carbon footprint.
As per the Cambridge Bitcoin Electricity Consumption Index, the cost of power needed to mine BTC annually is equivalent to the energy that Ukraine, Sweden, or Malaysia runs on. According to recent research, if Bitcoin becomes as extensively accepted as a legal tender, it may boost the temperature of the Earth by two degrees Celsius.
The present value of the cryptos and its hypothetical future worth has a role in determining carbon output. Cryptocurrency mining operations have been accused of power disruptions in Iran. New research revealed that the Bitcoin blockchain’s power consumption in only China surpasses Qatar’s and Czech Republic’s annual greenhouse gas emissions.
Efforts to assess the environmental effect of NTFs and mining have generated conflicting results. Still, studies show that the blockchain’s total carbon emissions are massive. Where exactly do they differ? Whether those pollutants can be traced back to singular NFTs or the entire blockchain, it’s still up for debate.
Looking for a Long-Term Solution
Disgruntled content creators are spearheading the drive to render non-fungible tokens more viable. They are doing this with plans to reward anybody who can introduce innovative strategies into the mix.
Damien Hurst, an artist, has released a series of non-fungible tokens on the Palm side chain. He claimed that they are ninety-nine percent more eco-friendly than PoW schemes. One of the most significant concerns is PoW chains.
Several artists are also attempting to increase attention regarding other options apart from Ethereum. Towards the end of the first quarter of 2021, a group of well-known creative professionals collaborated to auction carbon-neutral digital art and earn some cash for the Open Earth Foundation.
The founders of Ethereum stated years back that it will abandon the PoW paradigm. This will favour a PoS (proof of stake) system that pays members depending on the amount of crypto they currently own, thus, decreasing computing work.
Since “proof of stake” does not need mining, adopting the “Ethereum 2.0” may cut NFT power usage by ninety-nine percent. Which far surpasses Ethereum 1.0 in terms of environmental usefulness and preservation.
Implementing processes on Layer 2 rather than on the blockchain can minimize the effects of NFTs even more. The Layer 2 activities are bundled collectively, processed off the network, and then returned to the blockchain as a single exchange, resulting in a more effective system.
As it seems, NFTs can be claimed to have negative impacts on the environment. But I must say, with the new technology and system carried out in Ethereum 2.0, its effect can be minimized. Other than that, the emergence of NFTs has undoubtedly added innovative traits to the blockchain world. With this consolation and proper monitoring of the negative effect, it is fair to acknowledge the positive and contribution of NFTs in the blockchain world.