The rise in popularity of NFTs has brought the environmental impact of the digital asset class into question. While the carbon footprint of cryptocurrencies has been a topic of discussion for years, environmentalists and digital artists are now focused on the environmental impact of NFTs.
The Bitcoin network alone generates 38 million tons of CO2 per year. To put this in perspective, the nation of Slovakia consumes less energy than Bitcoin does.
Why do NFTs have an environmental impact?
To understand this, we first need to look at how NFTs work. To summarize an in-depth explanation we gave on our site, an NFT is a set of information that exists in a unique place on a blockchain. The minting of an NFT and any token ownership change is done through a consensus mechanism to ensure that every transaction is secure.
The consensus method of a blockchain has the most significant impact on the carbon impact of a transaction on the network.
Ethereum and Bitcoin, for example, use a validation process called “proof-of-work”. Under proof-of-work, miners (specialized computers) compete against each other to mine a block (one or more new transactions). In this competition, the miners are given a complex math problem and generate trillions of guesses to the problem per second. Once a miner finds the correct answer, their solution is accepted, and the block is validated. These complex calculations are energy-intensive and are the main reason proof-of-work blockchains consume so much energy.
Polygon, for example, uses a validation process called “proof-of-stake”. This validation does not rely on the energy-intensive calculation to verify transactions. Instead, owners of the cryptocurrency can put their coins into a holding area and provide the network’s validator nodes with the next block for the chain. The validator node will check the owner’s work. If the transaction is correct, it will add the block to the chain and reward the owner for the stake. If the transaction is incorrect, it will not add the chain and penalize the owner, typically by losing some of the staked coins.
Proof-of-stake blockchains do have some carbon footprint. However, the environmental impact is significantly lower because the validation is not energy-intensive.
What is the environmental impact of NFTs?
The answer to this question depends on which blockchain the NFT is minted. Any blockchain that relies on a “proof-of-work” validation method will have a much higher carbon footprint than a blockchain that uses a “proof-of-stake” validation method.
According to blockchain sustainability researchers, a single transaction on the Ethereum network emits 83 kg of CO2. In contrast, the equivalent transaction on the Polygon network only emits 430 g of CO2. These estimates show the difference that the validation method a network uses has an enormous impact on the carbon impact of the specific blockchain.
Ethereum and other proof-of-work blockchains have undoubtedly given NFTs a bad rap. While the actual carbon emissions of blockchains vary based on the number of validator nodes on a network, the traffic on the network, and dozens of other factors, we estimate that the carbon impact of a Polygon transaction is 0.5% of an Ethereum transaction.
Why does Enshrine mint NFTs on the Polygon network?
We spent months investigating our options for the blockchain that we use to mint NFTs on our platform. We wanted to ensure that the blockchain we chose was secure, environmentally- friendly, stable, and an industry standard.
As of early 2022, there are more than 10,000 active cryptocurrencies based on blockchain. Of these blockchains, only a subset of them supports NFTs. Of that subset, even fewer have robust developers behind them, use proof-of-stake validation methods, and are widely used on various platforms.
While Ethereum is the most broadly supported of these options, transacting directly on the Ethereum blockchain is very expensive and has a large carbon footprint. We wanted the security and portability of the Ethereum blockchain without all of the downsides.
Polygon is a secondary scaling solution for the Ethereum blockchain, otherwise known as a “layer 2” blockchain. It uses proof-of-stake to keep transactions secure, speedy, and scalable. Transactions are bundled together on the Polygon network and sent to the Ethereum blockchain.
Enshrine can create NFTs on the Polygon blockchain to minimize the environmental impact of the transaction while still benefitting from the positive aspects of Ethereum.
What is the environmental impact of buying an NFT on Enshrine?
Short answer — purchasing an NFT on Enshrine is carbon-neutral. When you buy an NFT on Enshrine, we pledge to offset the carbon impact of the minting process.
Longer answer — Enshrine relies on industry experts to determine the environmental impact of each transaction, then purchases carbon offsets for every purchase.
According to Alex de Vries’ recent blog post, a single transaction on Polygon produces close to 430 grams of CO2. To put this in perspective, a single McDonald’s beef patty emits 2.11 kg of CO2, and shipping a single package within the United States emits 1.19 kg of CO2. While the environmental impact of purchasing an NFT is not zero, we can confidentially say that it is significantly less than what most people think.
We are committed to empowering creators through NFTs in an environmentally conscious, sustainable, and secure way. We do this by using cutting-edge blockchain technology and pledging to purchase carbon offsets for every NFT minted on our platform.