What Are NFTS?

Non-fungible tokens (NFTs) are assets that have been tokenized via a blockchain. Each NFT has a unique identification code and metadata that distinguish them from other tokens. NFTs can be traded and exchanged for money, cryptocurrencies, or other NFTs.  NFTs are created through a process called minting. Minting involves recording the information of the NFT on a blockchain. As tokens are minted, they are assigned a unique identifier directly linked to one blockchain address. Each token has an owner, and the ownership information (i.e., the address in which the minted token resides) is publicly available. Even if 5,000 NFTs of the same exact item are minted, each token has a unique identifier and can be distinguished from the others. Types of NFTs include artwork, virtual worlds, photography, sports collectibles, and even music.

Image by VeeFriends via blog.veefriends.com.

How Do NFTS Impact The Environment Globally?

According to an estimate backed up by independent researchers, the time it takes to create the average NFT has an environmental footprint of over 200 kilograms of planet-warming carbon. This is equivalent to driving 500 miles in a typical American gasoline-powered car! Researchers at Cambridge University have also estimated that mining Bitcoin uses more electricity than entire countries like Argentina, Sweden or Pakistan. 

Minting and transferring an NFT can be energy intensive, but it does not need to be. Blockchain platforms using the proof-of-stake operating method can generate NFTs without excessively using electricity and negatively impacting the environment. Unfortunately, diminished energy use under proof-of-work blockchains is not yet attainable.

Despite concerns about energy usage through using NFTs, there are some that want to utilize it to help the environment. One example of this is FC Barcelona, a football club, which introduced 3,000 animal-themed FC Barcelona NFTs called ‘Unleash Your Passion.’ These NFTs are priced at $30 each and offer fans an opportunity to contribute to the planet’s well-being while showing their love for the game. FC Barcelona empowers and encourages football fans to take on environmental responsibility by giving them exclusive benefits through its ‘Unleash Your Passion’ NFT initiative. By taking part in this program, fans get to own a unique piece of NFT art co-designed by Plastiks. They also get to contribute to environmental conservation efforts through the funds from the sale of each asset. 

Another NFT project, Ecosapiens, raised $3.5 million in seed funding towards making blockchain collectibles more environmentally conscious. According to data from OpenSea, Ecosapiens’ Alpha Collection has a floor price of 0.055 ether (ETH), or about $100. The collection’s trading volume is hovering around 18 ETH, or about $32,300. It has helped offset over 1,000 tons of carbon dioxide, equivalent to planting 40,000 trees, so far.

There is still much more research to be done on measuring the environmental impact of NFTs. Their impact on the environment could extend more than just its large amount of energy consumption. However, they have potential to be a boon to the environment, as shown through Ecosapiens and FC Barcelona’s efforts. 

Do you think NFTs might become a major part of the future of sustainability?
Let us know by tagging us at @SustainableWat!