NFTs are like pineapple on pizza: they polarize the internet. Ask 100 people what they think of NFTs, and you’ll get 100 different answers.
Some think they’re a breakthrough technology that’ll change the world. Others think they’re a total scam that’s destroying the environment. Some people think NFTs enable a new renaissance, others think they ruin art. And then there’s the right-click savers—but we don’t talk about those 🤫
As an NFT marketplace, some might call us somewhat biased in talking about this. But we realize that no technology in the world has ONLY had positive impacts (unless you consider maple syrup pancakes a technology). Just like that, NFTs have advantages and disadvantages.
But that might not be clear in the media: Whether you look at Twitter, blogs or articles, a lot of opinions there appear one-sided.
That’s why we decided to launch a series of articles that address various NFT myths and criticisms without dismissing them. Instead, we want to show you where criticisms have a point and where they’re misplaced.
We’ll start with one of the least farfetched myths: NFTs ruin the environment.
The answer comes down to the PoW vs PoS difference
As much as we believe in the metaverse, we also like to spend time in web0—aka outside. Now, some skeptics say that NFTs are horrible for the environment, and you've probably come across that narrative in some mainstream media outlets. Their main point: Blockchains consume a lot of energy—and the more energy you consume, the bigger your carbon footprint and environmental impact.
And we want to be honest: this last point is true.
Some blockchains do consume a significant amount of energy. And that does contribute to carbon emissions. Bitcoin, for instance, consumes nearly as much power as the entire country of Thailand.
But not all blockchains are the same. Blaming blockchain carbon emissions on NFT technology is like saying all cars are destroying the environment—no matter if you drive a 2020 Tesla or a 1985 Pickup Truck (or a 2004 Fiat Multipla but please don’t remind us of that).
Now, if you’re environmentally conscious, you’d probably want a more sustainable option. With cars, the difference is obvious: a gas-powered car vs. an electric one.
In blockchains, there’s something similar. They’re called proof of work and proof of stake. The details are deeply technical, but the core difference is this:
Proof of work (PoW) uses significant amounts of computing power (=electricity) to mine coins and add blocks to the blockchain.
Proof of stake (PoS) blockchains, on the other hand, require far less energy by design. Validators, who are in charge of validating blocks on PoS chains (like miners on PoW ones), are selected randomly and don’t have to compete with each other, which creates a much less energy-intensive environment.
(For the 7 people reading this who LOVE consensus mechanisms: just like there are also cars running on hydrogen and ethanol, there are also proof of history, proof of space-time, proof of authority… but proof of work & stake are most relevant.)
So when people criticize the environmental impact of blockchains (and NFTs), they really criticize proof of work (PoW) blockchains.
For example, the popular PoS blockchain Tezos (which is available on Rarible.com) only had combined carbon emissions of just 17 global citizens across 50 million transactions—an impact hardly worth mentioning.
NFTs will get much greener once Ethereum goes PoS
Currently, the only two major blockchains using proof of work are Bitcoin and Ethereum. Bitcoin NFTs technically exist, but they’re neither popular nor supported on any major marketplace. And while Ethereum is the most popular blockchain for NFTs, it’s moving to proof of stake to reduce its energy consumption by 99.95% (the transition is currently expected to happen by the end of Q2, 2022).
That means NFTs on proof of stake blockchains are already quite sustainable. And with Ethereum moving to proof of stake, new Ethereum NFTs will have radically lower energy consumption.
So are NFTs as horrible for the environment as many people say? Not necessarily. Most blockchain energy consumption comes from Bitcoin, which basically has no NFTs. And with all other chains either being on proof of stake or moving to proof of stake, NFTs will be much “greener” soon.
Now, that doesn’t make NFTs carbon neutral. And while some projects already compensate for their carbon emissions, you can make your NFTs carbon-negative right on Rarible! To do this, simply navigate to any Ethereum NFT on Rarible.com, click the green plant and follow the instructions. Good deeds don't go unnoticed, so your nickname will then be displayed in that NFT's description.