NFTs are an eco disaster – can they be fixed?

+ why green charities should be wary ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌
No images? Click here <theconversationuk.cmail19.com/t/r-e-trudjlil-ukjyiutthd-g/> [image: Imagine: the planet with climate action]
The conservation charity WWF UK *closed its digital art sale* <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-r/> after just a few days last week due to an online firestorm. The Tokens for Nature collection offered buyers non-fungible tokens (NFTs) of 13 different endangered species, including the giant panda and Javan rhino. These collectibles are essentially certificates of ownership for digital artworks which can sell for thousands and even millions of dollars. Sounds like a lucrative and relatively benign fundraising tool – so what’s the problem?
You’re reading the Imagine newsletter – a weekly synthesis of academic insight on solutions to climate change, brought to you by The Conversation. I’m Jack Marley, energy and environment editor. This week we’re looking at an art fad with a hellish carbon headache: NFTs.
What actually are NFTs? It can get complicated quickly, but here’s Peter Howson, a senior lecturer in international development at Northumbria University to explain:
“Like Bitcoin, NFTs are cryptocurrencies. But whereas individual bitcoins all have the same value, NFTs are more like baseball cards. Each token has a different value and they can’t be used to buy things. They exist on your computer as digital representations of artworks, songs, films and games, among other things.”
You can have NFTs for cartoon cats and apes, or screenshots of tweets, or song lyrics, or even digitally rendered buildings you can explore in virtual reality. Of course, anyone can see and download these things, but Howson says:
“When you buy an NFT, you’re buying a unique certificate of ownership, which is locked away on an immutable distributed database known as a blockchain.”
Blockchains, and therefore NFTs, use a lot of energy. Ethereum is one of the most popular blockchains for minting NFTs. Similar to Bitcoin, it relies on what’s known as a proof-of-work system.
“This involves an energy-intensive computer function called mining. Specialist mining computers take turns guessing the combination to a digital lock (a long string of random digits). The computer that correctly guesses the combination wins a reward paid in a cryptocurrency called ether. The digital lock resets roughly every 15 seconds, and the competition continues. Ethereum uses about 31 terawatt-hours (TWh) of electricity a year, about as much as the whole of Nigeria.”
Because of the energy consumption involved, the digital art world’s ties to Ethereum come with *hefty carbon baggage* <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-y/>. So are there greener blockchains?
Yes. WWF opted for Polygon in its NFT sale. These “sidechains” have fewer interactions with bigger blockchains and use much less energy to process NFTs because the transactions happen on a more centralised platform. But encouraging hype around NFTs could still grow the wider market, and many NFTs sold on certain platforms are relisted on marketplaces on the Ethereum network.
The climate cost of these digital artworks appeared to put WWF off selling its non-fungible animals. So can anything make NFTs sustainable?
“Changing how transactions on the blockchain operate … *could cut its energy usage by 99.99%* <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-j/>,” says Iwa Salami, an associate professor of law at the University of East London. This is possible by switching from energy-hungry proof-of-work mining, “where data miners around the world compete to crack a maths puzzle”, to proof of stake, “where cryptocurrency owners validate blockchain transactions based on the number of coins they stake.
“In other words, cryptocurrency owners are required to put up their own cryptocurrency as collateral for the opportunity to successfully approve transactions,” Salami says.
The advantages of processing NFTs this way are huge, say Sankar Sivarajah and Kamran Mahroof, experts in management and supply chain analytics at the University of Bradford.
“[Proof of work] forces miners to compete with an ever-expanding arsenal of high-tech computers, [which] means it has inevitably come to demand more and more electrical power … [Proof of stake] eliminates competition between miners. Without the competition, there’s *no computing power arms race* <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-t/> for miners to participate in.”
For the time being though, NFTs are likely to remain controversial. Environmental charities thinking of cashing in on the trend should also beware the fine print, Howson argues.
“Donors [can] track and manage how funds [are] spent” using smart contracts. This allows “non-expert crypto donors to encode concrete conditions to their donations. Break the conditions — lose the funds. Great for the donor. Lousy for the charity’s conservation experts.”
*- Jack Marley, Environment commissioning editor*
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[image: A Bored Ape NFT dressed as a panda with the word ‘NFT’ floating next to it.] <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-d/>
*NFTs: WWF tried raising money with digital art but backtracked – environmental charities should follow suit* <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-h/>
The premise of ‘eco-friendly’ non-fungible tokens is shaky at best. Read more <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-k/>
[image: A digitally rendered blue cat poking out of a box saying ‘NFT’.] <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-u/>
*NFTs: why digital art has such a massive carbon footprint <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-o/>*
NFTs don’t even exist in the real world, but the market around them has a big effect on the planet. Read more <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-b/>
[image: Two hands exchange a Bitcoin coin] <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-p/>
*Cryptocurrency, NFTs and the metaverse threaten an environmental nightmare – here’s how to avoid it <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-x/>*
Blockchain technology can be made greener if we change the way transactions happen. Read more <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-c/>
[image: Metal coins featuring the logos of altcoins] <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-q/>
*Bitcoin alternatives could provide a green solution to energy-guzzling cryptocurrencies <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-a/>*
Some alternative cryptocurrencies, called ‘altcoins’, demand far less electrical power than bitcoin. Read more <theconversationuk.cmail19.com/t/r-l-trudjlil-ukjyiutthd-f/>

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