Carbon Footprint of NFTs

NFTs have opened a new dimension to the present-day internet, at the same time the subject is hesitant in the aspect of energy-intensive consensus.

NFTs are an ongoing hype present in the immediate market. Big celebrities to grand businessmen are trading and getting themselves involved with NFTs. These brackets of assets dwelling in the NFTs are strengthening digital artworks, digital collectibles, consolidating metaverse and gaming, and much more. Though NFTs have opened a new dimension to the present-day internet, at the same time the subject is quite hesitant, mostly in the aspect of proof of work energy-intensive consensus. In the chapters about to come, we’ll be looking at the other side of the NFT build-up.


The year 2021 witnessed $44.2 billion in transactions allied with NFTs and other digital collectibles. The most popular kind of NFT is the Generative Media NFTs like CryptoPunks, whose values have upsurged. Anyhow, not the price, but another challenge corresponding is the climatic impact and environmental regard linked to NFTs. It is important to analyze and make informed choices to reduce or eliminate the problematic energy usage of specific types of blockchain. If a judicious method is followed, then it gets very easy to obtain NFTs, while navigating through the choices that lower climatic impact. Moreover, people must be aware of the alternatives present and also should switch their practices to more environmentally friendly ones.

A Comparison among Blockchains

Bitcoin: Mining secures the blockchain and certifies a reliable set of shared records through a consensus mechanism, known as proof-of-work. Powerful computers present in data centers around the globe compete for the ‘work’ every ten minutes, to solve a computationally tough math problem known as a ‘hash’. The first node to solve or ‘proof’ it gets to write the fresh batch of transactions to Bitcoin’s global records. It also earns a monetary prize denomination as bitcoins. Recent estimates suggest that 114.06 megatons of carbon dioxide are emitted per year, as a consequence of such activities. PoW mining comes at an enormous environmental price.

Ethereum: Another blockchain platform that recently incorporated smart contracts and decentralized applications (DApps), all of it on the PoW consensus mechanism. However, Ethereum has attempted a novel variation of the ‘work’ that requires memory-intensive operations and is more resistant to the usage of power-demanding application-specific integrated circuits. These planned strategies have thus resulted in improvements. The estimation in the case of Ethereum’s carbon footprint is about 62.69 megatons of carbon dioxide on an annual scale.

Both Bitcoin and Ethereum use a wide power consensus mechanism. Ethereum has however announced that it would shift its operation towards the PoS (Proof-of-Stake) model, in the second quarter of 2022. Combined, both of these blockchains carry 0.36 % of global carbon emissions generated by humans.

Alternative Consensus Mechanisms

There’s an ongoing battle to enhance and polish blockchain technologies that don’t involve carbon-intensive PoW. Few drifts to consider an alternative consensus mechanism could be to minimize the carbon footprint generated by the blockchain networks. The second is protection against coordinated blockchain attacks through the expansion of consolidated mining computing power. Another regard is the scaling challenges faced by blockchain which are confined to both slow finality periods and low volumes of transactions every second.

Proof-of-Stake (PoS)

PoS is a radical consensus mechanism consisting of a light and moderate carbon footprint. Instead of solving computational problems by computing, the stakeholders that maintain the blockchain pledge and their currency put it at risk intentionally as a guarantee against fraud. If everything stays fine, the stakeholders who stake their tokens can earn s small profit for their trouble. Moreover, the staked amounts can be slashed if they’re at risk. Examples of blockchains implementing the PoS model include Cardano, Tezos, etc. As per Ethereum is concerned, it is now migrating toward the PoS model in its ‘Ethereum 2.0’ roadmap.

Layer 2 Solutions

Layer 2 solution comprises an array or a series of lightweight transactions grafted on an existing blockchain. Layer 2 is a kind of sharding solution that promises to make blockchain platforms more scalable with less energy necessity. This process calls for a partition that splits off the main layer or Layer 1 or main chain and then periodically re-ties to assure transaction integrity. One instance of the same is ‘Optimism’.

Further methods embrace Proof-of-History, Proof-of-Authority, usage of sidechains, etc.


With the upsurging of versatile blockchain networks, and their operation mainly inclines towards PoW mechanism, it becomes essential to acknowledge the class of individuals that are elevating carbon footprint in the environment.

The Mantle of Miners

As far as miners are to be considered, it is preconditioned to understand that they work in relative isolation. It’s almost very complicated or adverse to hold them altogether accountable for their environmental footprint due to their inertness in public-facing roles. Miners can’t be held entirely responsible for these emissions. Since the ‘work’ is mined, the responsibility is then shifted towards the stakeholders and other participants. The entire process ends after an NFT is purchased by those having purchasing powers. There is also a retail phase, and then other processes like the market phase, wherein the load is created on the system for supply.

There isn’t much conversation among the regulators about mining. Moreover, countries with low energy resources, subsidies and political influences, and fall-outs, attract bitcoin miners. It is also reflected that there are a few miners who don’t even pay for the electricity they make use of. As a result, due to heavy mining, pressure is created on electrical power grids resulting in widespread crackdowns, and at length, a demand for a ban on crypto mining.

Any change can take birth from the ecosystem itself, and its members. People are gaining more awareness related to climatic concerns and are thereby seeking better choices that don’t degrade the environment. This can be done by voting for entities that lead to sustainable practice, supporting individuals who are aiding and contributing toward carbon neutrality, and by withdrawing from those who don’t reinforce such practices. It’s all about making choices and being thoughtful about carbon emissions and their environmental exposure. Looking at the entire scenario from another perspective, we must realize that we need to be aware of the efforts, especially those from supply chain participants who tend towards either emptying up the markets or performing deceptive activities like greenwashing. Accordingly, it is recommended to take a data-driven approach. Owing to online calculators and published data, it is not easy to calculate our blockchain carbon footprint or access the impact of using one blockchain or sidechain over another. Thereupon, a lot of work has been done to address carbon emission and abatement.

The Exigency of Sensible Policies

Numerous nations are banning, limiting, or proposing to ban crypto mining due to the extensive power it uses, while certain countries are planning to shift towards technologies that are more ecological and efficient, instead of going for a complete banning. If we look at a distance over the phase of shifting from PoW towards renewable sources, it is seen that again a very massive amount of energy supplied is required.

The Entanglement

Concerning carbon emissions and sequestration, the talk is complex. The commotion is that it is related to climate that isn’t defined or bounded within a particular nation, but rather encompasses the entire globe – which means it is a cross-border and cross-country subject. One of the most misunderstood cases is that many believe that usage of one tonne of carbon would emit another one tonne of carbon, but this isn’t the incident. The entire process is dependent on the complexity that a project has or is aimed at. For the projects involving carbon sequestration, there are queries revolving around who gets the credit if there is a new net benefit. One way of managing carbon footprint is the usage of API to determine the offset of carbon, that’ll help the user to ascertain or decide the project they must be purchased, after comparing the characteristics, especially in terms of carbon emission.


Since we’ve dealt with NFTs, we’ve seen that NFTs differ from one another and they aren’t created on an equivalent or equal magnitude. They are distinguishable from one another in terms of how and where an NFT is minted, bid on, rendered, purchased, or transferred. The following sections will discuss some decision points and recommendations that’ll aid to make the process as sustainable as possible.

Circumventing PoW Blockchains

We’ve earlier discussed blockchains shifting from PoW to PoS and other mediums, due to the enormous power consumption that occurs. This is the easiest step and sole biggest decision to avoid blockchains running on the PoW mechanism. Having regard for this step can cause the emission to reduce by one order of magnitude – which is quite large.

We know that 80% of the NFT market share is accounted for by Ethereum, attributed to market capitalization, which thereby constitutes a bigger percentage of the comprehensive emissions. It is recommended that until the consensus mechanism of the platform shifts from PoW to PoS, it is best to avoid this platform. However, for the people who already own an existing NFT collection over the blockchain, the finest choice is to leave them all at rest, for the time being – since moving the collection from one blockchain to another consumes even more power than ever before.

In case the transaction is predetermined or unavoidable, then moving it off the mainnet along with the offsets is highly advised, as it’ll make the transactions carbon neutral. Despite an Ethereum NFT being left at rest, it is reasonable to consider the purchase of offsets as a mechanism to offset the original course of minting and buying it, therewith conveying NFT into a carbon-neutral state.

Examining the Entire Course

Estimating the footprints left by NFTs isn’t about recognizing the initial or final steps involved, but is more of the complete broad range of factors embraced, in the entire approach. It’s not only about the transaction cost of a sale, more readily lies in the NFT points that touch blockchain. These so-called points could stretch over the on-chain bidding process, NFT minting and rendering, and other related contracts or any alterations done to the NFT contract while it’s still in the period of ownership.

The implementation details come to play for more acceptable accuracy. The measure in most of the cases must be hinged on the actual compute cycles and energy that is being utilized, apart from the source of energy. Another consideration is the token standardization held by an NFT, that is, whether it is an ERC-721 or ERC-1155 token. For instance, ERC-1155 can improve efficacy through batched transactions.

Switching to Lightweight Blockchain

There are several other NFT-capable blockchains present in the market, other than Ethereum. The current status of Ethereum is 80% share, which was earlier 95% in 2021. Another sanctuary of NFT that is gaining popularity is Solana, which surpassed $1 billion in an all-time market volume at the start of 2022. As far as the latter platform is considered, it is currently using its proof-of-history consensus mechanism in conducting NFT and smart contracts transactions; moreover, being rapid and economic. Other players in the market include Cardano and Tezos, which are presently operating on the PoS mechanism. A drift is seen in the evolution of layer 1, due to expense, since layer 2 carries out the majority of the transaction volume, the entire modification being termed as ‘settlement chain’.

Innovative Replacements

What adds to more carbon emission is the redundancy of the verifiers and the upper limits on each transaction. Some good choices to make revolve around taking transactions off the mainchain onto low carbon-footprint permissioned chains or layer-2 networks or sidechains. Thanks to these alternatives the overhead energy requirement is reduced further. A piece of good news is coming from Candy Digital, in order to lower its carbon footprints, is using an EVM-compatible sidechain (known as Palm network). Another spiffing platform is Hyperledger Besu which is built with a modular design and supports the EVM while allowing for PoA and PoW consensus algorithms. It is due to this docility that it can interface with both public and permissioned blockchains. According to Patch Technologies, the PoA consensus protocol used by the Palm network is 99.9% more efficient than PoW. It can be predicted that as the industry matures, verification of carbon footprints by third-party applications/sites will encourage the audience to adopt low-carbon NFT platforms. It’s not only about the efficiency but also about the awareness that can be raised to convert the NFT processes into sustainable ones – or maybe, educating people about the importance of carbon emission’s impact on the environment due to NFT-related activities.

Verifiable Offsets

Reduction is the prime step involved in the sustainable practices for NFTs. Once we reach the boundary or limit of reduction, the remaining impact can be offset for better or net-zero carbon emission. To come up with an auxiliary, we’ve carbon offset projects that constitute activities like planting trees, capturing methane gas from landfills, and many other. What’s important is that we don’t entertain offset as shortcuts around the reduction. One astray element in the entire array of offset projects can lead to claims of greenwashing. Therefore, it is important that the robust, and certified initiatives stand at the center of such activities. The offsets that are measured, verified, and certified grant a price to be placed on carbon-intensive activities so that industries can compare and incorporate these into their budget. Financing into offsets can also help to gain access to the capital of robust carbon offset projects that offer supplementary environmental and developmental impacts. For a representative case, let’s look into the case of mangroves or regenerative agricultural projects that won’t only act as carbon sinks but also would assist farmers to adapt to climate change, apart from benefitting people belonging to marginalized communities (if any). Presently, the offsets can be expensive and challenging in the aspects of cost, scale, and verifiability – still, it’s always an option to go for.

Concrete Commitments

Although technological strands are important, what’s more, essential is the solid and firm commitments made by ecosystem stakeholders. Stakeholder engagement from the beginning assists in making a way for projects to reduce the risk of potential negative responses, if it’s genuine. It is due to announcements and proactive press statements that concerns are acknowledged and an example is set for others.


Carbon-friendly NFTs are possible today. The governing factors still reme entities that are using or issuing NFTs are analyzing implementation details and making the correct array of technological and blockchain choices. It is estimated that since many eco-friendly alternatives are already emerging, the future might be leaned toward the platforms that are more PoS, and ecological. NFTs are very powerful tools that shape how people can connect and interact with one another. It also offers unique approaches to showing our digital side. NFTs can offer astonishing climate-lucky options for a wide range of projects. It is also assumed that even NFTs as a standalone change will bring in new strategies and recourses for tackling climate change.