As Tom Brady, DCComics and Visa will tell you, non-fungible tokens (NFTs) are a class of assets underpinning the worlds of digital art, digital collectibles, metaverse gaming, and beyond, that have exploded in popularity. At the same time, they have been met with skepticism, tainted by market hype, and associated with energy-intensive Proof of Work (PoW) consensus mechanisms.
Diving into this tug of war between innovation and sustainability, Linux Foundation Research, in collaboration with Hyperledger Foundation and Palm NFT Studio, just released a detailed report on the current and future state of carbon consumption and NFTs that explores the environmental impact of NFTs, investigating how and why NFTs can have varying carbon footprints depending on underlying technology stacks.
As this report, “The Carbon Footprint of NFTs,” confirms, not all blockchains are created equal. Case in point: Recent estimates suggested that mining activities associated with cryptocurrencies like Bitcoin are responsible for emitting 114.06 megatons of carbon dioxide per year. That’s as much as the entire country of the Czech Republic.
This report looks at problematic energy use for specific types of blockchains and then dives into several emerging blockchain technologies that can reduce or eliminate these harms. It goes on to provide guidance on steps and strategies to not only increase the sustainability of blockchain but leverage the innovation of NFTs and smart contracts to tackle climate change itself.
Researched and written to provide an objective look at pitfalls and potentials of NFTs, this detailed report includes interviews and insights from climate experts, economists, technologists and companies on the front line of NFT and blockchain innovation. The key takeaways are outlined in the graphic below:
The report’s final words are “The choices are up to you,” underscoring that there is a path to sustainability with NFTs. The key is putting the climate front and center in design, development and deployment decisions taking place right now.
Download the full report to find out more about the pathway to NFT sustainability.