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Are NFTs Speeding Up Climate Change?
Data centers use a lot of energy. That’s not exactly a revelation. But as the world moves increasingly digital, the increased energy use from data centers is out-pacing the rate of adoption of renewable energy. The effect: There is concern that trends like cryptocurrency and, more recently, non-fungible tokens (NFTs), are speeding up climate change because of the amount of computing power, and thus energy, they require.
If you’re not familiar, an NFT is basically a digital collector’s item. Its unique digital signature and provenance are contained in a blockchain. Whether an NFT is actually a piece of digital art, a video clip of a windmill dunk, a baseball card, an original song from a popular group, or anything else, NFTs are a huge deal. One piece of artwork sold in March 2021 for $69 million. If you think that’s crazy, you’re not alone. A recent popular meme derisively compared NFTs to this generation’s pet rock.
Still, though, NFTs are big business, and they require massive amounts of energy. A recent story in the NY Times actually examined the relationship between NFTs and energy use in data centers. Part of the reason for the huge energy use is that to post an NFT for sale, the artist’s computer must “solve” a cryptography puzzle to post the digital artwork and begin the blockchain ledger. The first “miner” ((the name for artists -- or scammers -- posting artworks) to solve the cryptography gets to sell it. According to the NY Times piece “miners” were creating 170 quintillion attempts per second in April attempting to post NFTs for sale. And as NFTs gain in popularity, the competition to post them becomes more fierce, requiring more difficult cryptography and using more and more energy.
This all requires an intense amount of computing power, and energy. One estimate cited by the Time says each NFT requires 200 kilograms of carbon, the equivalent of driving 500 miles! Another estimate concluded that a particular artist selling two NFTs required more than 175 MW of electricity!
What’s the solution? No one is quite sure yet. The NY Times story mentions a platform that is changing the way NFTs are minted to use dramatically less energy. Of course, we also need to speed up the rate of adoption of energy sources like solar and wind that don’t burn fossil fuels and don’t spew carbon dioxide. And technology is constantly improving to create more efficient data management as well.