Non-fungible tokens (NFTs) themselves don’t cause any environmental impact. However, the impact on our climate is linked to how an NFT is produced.

The way that non-fungible tokens are created is highly energy-intensive. Most of them are minted using the proof-of-work operating method, which uses large amounts of electricity. Any energy-intensive process, crypto-related or otherwise, can aggravate climate change by adding to the atmosphere’s carbon dioxide emissions. Nevertheless, there are other more environmentally friendly ways to mint NFTs-in particular, methods using proof of stake.

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Minting an NFT doesn’t have to use huge amounts of energy. As stated earlier, non-fungible tokens themselves don’t impact the environment, but how they are minted can have substantial environmental consequences.

 

Interesting details about non-fungible tokens

Let’s have a look at how NFTs using proof of work are generated to understand how their production consumes so much energy.

First of all, a non-fungible token is listed in a digital marketplace. Typically, before an NFT is minted, it’s listed in an NFT marketplace. While listing an NFT isn’t energy-intensive, the location of the NFT listing will generally determine how much energy the minting process will require.

Choosing an NFT marketplace like OpenSea, the largest NFT marketplace, which hosts the Ethereum platform that uses the proof-of-work method, means that the minting process will be energy-intensive, at least for now.

A non-fungible token is purchased: The purchase of an NFT is often the catalyst for the NFT to be minted. Notably, using a proof-of-work, the NFT is minted-or “mined” by cryptocurrency miners who control extensive computing resources.

The minting process requires a lot of energy as specialized computing hardware consumes vast amounts of electricity. So, miners race to quickly solve complex math problems, hence earning the right to mint an NFT.

A non-fungible token is stored or transferred: Once the NFT purchase is complete, you have the ability to store the NFT or transfer it to another person. So, if you transfer the NFT to another NFT marketplace that uses the proof-of-work method, then the same energy-intensive process that was used in order to mint the NFT is repeated for the transfer. However, simply storing an NFT doesn’t consume energy.

 

Mining process and electricity

Many people may be wondering exactly how the mining process consumes energy. It is worth mentioning that only miners with the most computing power are likely to succeed at solving complex math problems the fastest, meaning that miners must operate a large quantity of computing hardware – and consume a lot of electricity.

A global network of cryptocurrency miners is competing to validate blocks of transactions, including NFT transactions, requiring every participating miner to extensively use electricity-even though only one miner is selected to validate each new block of transactions.

Last but not least, every transaction on the Ethereum proof-of-work platform, including every NFT transaction, uses more than 260 kilowatt-hours of electricity equivalent to the electricity used by an average U.S. household over 9.05 days.