Reducing The Environmental Impact of NFTs

2021 has been a breakout year for NFTs, with sales increasing from $13.7 million during the first six months of 2020 to $2.5 billion during the first half of 2021. That’s an increase of roughly 18,148% year-over-year. The enormous growth in NFTs sales has produced other outcomes that may come as a surprise. One of the most lesser known outcomes is the impact that creating, buying, and selling NFTs has on the environment.

At first glance, NFTs do not seem like they would impact the environment since they are entirely digital. Additionally, it is rational to believe NFTs are better for the environment than traditional, physical art. This is because digital assets do not require physical materials to construct the art. Furthermore, there is no traveling to browse art galleries, and shipping the art is not applicable since the files are shared electronically. However, NFTs possess their own set of environmental effects that traditional art does not encounter.  


Minting an NFT

Each time an , the digital asset must be ‘minted’ on the blockchain. Minting is essentially registering an NFT on the blockchain to become the formal owner of the asset. Minting is performed by assigning the NFT a unique string of code. Without minting, there would be no verified digital asset owner, which would make the asset relatively worthless. This is because an NFT’s value comes from being one-of-a-kind. In order to , mining is required.  



Mining is where the majority of NFT emissions hail from because ​​the process requires an enormous amount of computing energy. Mining for an NFT is usually done on the Ethereum blockchain, utilizing the ​​proof-of-work (PoW) method. The PoW operates by essentially having a computer solve intricate and elaborate equations. However, the PoW method is intentionally cumbersome because it creates a backlog of demand, which increases the fluctuating rate of mining.

Computers solve these equations by slightly changing the data they used every time the puzzle is not answered correctly. This process repeats over and over again until the solution is deciphered. The repeated attempts at solving the equations require massive sums of computer power and energy, thus producing large amounts of emissions.  


Reducing the NFT Footprint

Steps are being taken to minimize the impact NFTs have on the environment. Some are on a smaller scale and are aimed towards individuals, while other tactics are directed at the NFT industry at large.  


1) Proof of Stake

An alternative to the proof of work (PoW) method is the proof-of-stake model (PoS). The PoS model removes the carbon-heavy calculations that plague the PoW method. Instead, PoS distributes mining power (a.k.a, the ability to verify transactions) to miners based on the percentage of coins they possess. For example, if a miner owns .004% of the available Ethereum coins, that miner should hypothetically be able to mine .004% of blocks.

Ethereum is currently in the process of switching from the PoW to the PoS model. Ethereum started the process in April 2021 and is targeting to complete it by the end of 2021. According to the Ethereum Blog Foundation, Ethereum will use 99.95% less energy once the merge is completed. To put that into perspective, one Ethereum transaction using PoW uses the same amount of energy as a house does in 2.8 days. With PoS, one Ethereum transaction will use the amount of energy it takes to watch 20 minutes of TV.


2) Carbon Neutral

One way is for NFT buyers to offset the emissions from the NFT they purchase, also known as carbon neutral. Being carbon neutral can take various forms, including installing renewable energies or tackling projects that extract CO2 from the atmosphere. Not only can NFT buyers tackle being carbon neutral, but NFT creators and sellers can also take this stance. In fact, Beeple, the digital artist who created and sold the most expensive NFTs of all time, has pledged that his art will be carbon neutral moving forward.


3) Auction Fundraisers

Another idea is auction fundraisers, where the funds raised are donated to organizations that combat climate change. For example, Social Alpha Foundation (SAF), a not-for-profit organization that supports utilizing Blockchain technology for social good, hosted an NFT charity auction in tandem with the NFT marketplace, Nifty Gateway. The SAF fundraiser secured donated NFT art from some of the most prominent artists in the NFT landscape, including Beeple, and managed to offset more than 500 tons of C02e in the process. All proceeds from the event were donated to Open Earth Foundation, a non-profit that uses cutting-edge technology to fight climate change, brought on my blockchain and other emerging technologies.


As NFTs and cryptocurrencies become more prevalent in our everyday lives, the pressure for environmentally friendly solutions will continue to grow. In the meantime, we will continue to follow Ethereum’s much more eco-friendly switch to PoS, as well as monitor new and promising solutions to combat NFT emissions.


For updates and news on NFTs, blockchain, and other emerging technologies, continue to check the blog section of our website. Lastly, if you are curious about what opportunities NFTs can provide your business, or have questions regarding NFTs, contact us at and we can setup a time to talk.



How AI Empowers AR & VR for Business

Wednesday, June 19, 2024

12:00 PM ET •  9:00 AM PT