NFTs work towards solving their massive carbon footprint problem

April 26, 2022

By Sharan Kaur Phillora

Axiom Space, a leader in human spaceflight, building the first commercial space station, announced the debut of its NFT marketplace on 8th April, ahead of its historic Ax-1 mission to the International Space Station. During the mission, Axiom stated the initiation of minting of several NFTs from space, and with a nod to the growing concerns over the environmental impact of NFTs, the company relied on carbon offsets to minimize its footprint.

Here’s what we know:

As of late November 2021, Bitcoin’s value was equivalent to 2.9 per cent of the world’s money supply, meaning a total market value of $1.03 trillion, and Ethereum is rapidly gaining popularity. In fact, one of the big drivers for the rise in Ethereum’s usage is NFTs. Last year, rough estimates put NFT sales at a whopping $15.7 billion in total.

With Ethereum, vast amounts of processing energy are needed both to mine (create) the currency, and to confirm transactions on the blockchain (an unchangeable record of transactions).

It’s very difficult to calculate exactly how much responsibility the NFT industry should take for Ethereum’s carbon emissions. Ethereum was going to run with or without NFTs. But with the growing demand for digital art, NFT buyers and sellers are becoming liable for an increasing share of Ethereum’s total energy use, and some artists are starting to think twice.

In mid-2021, China (one of the countries with the most miners) heavily cracked down on the mining of Bitcoin. However, recent research seems to show that this ruling increased the carbon footprint of this process, boosting the use of non-renewable energy for mining.

While Bitcoin looks to be stuck in its ways, Ethereum (and the rapidly expanding and very wealthy world of NFTs) still has the potential to adapt.

The move to proof of stake was originally intended to launch with ETH 2.0 back in 2019, then a 2021 date was suggested, and now this year is expected to be the year it happens. In which case, the world of NFTs could drastically dampen their dinosaur-sized carbon footprint.

Image: Creative Commons

 


About the author

Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.

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