Worth the Watts? A Closer Look at the Energy Footprint of NFTs

Can power consumption emission from NFTs (non-fungible tokens) be eliminated using excess renewable energy? NFTs depend on cryptocurrencies, particularly the Ethereum blockchain, responsible for high carbon emissions. A team of researchers is proposing an interesting solution to this issue: underutilized renewable power.

Non-fungible token. Image used courtesy of Unsplash

NFT Power Consumption and Excess Renewable Energy

Cornell University researchers Fengqui You and Apoorv Lal have proposed using excess renewable energy to mitigate the emissions generated by NFT transactions. You and Lal point out that dozens of megawatts of renewable energy go to waste each year due to underutilization. At the same time, NFTs consume massive amounts of power, mainly from fossil fuels. 

You and Lal’s research highlights the possibility of resolving two issues simultaneously by transitioning NFT power consumption to renewable energy. Excess green energy could theoretically enable most NFT transactions, significantly reducing their harmful environmental impact. 

Climate leaders estimate that cryptocurrency activity generates up to 50 megatons of CO2 annually in the U.S. alone. That rate will certainly increase as more people use NFTs and blockchain technology. Therefore, any effort to eliminate the carbon footprint of blockchain and cryptocurrencies is worth considering. Unfortunately, this proposal isn’t without its drawbacks. 

Challenges of Using Renewables for NFT Minting

Using excess renewable energy to fuel NFT power consumption is a good idea. The problem is, allocating that energy specifically to NFTs is highly complicated. It is akin to using green power on every cash register in the U.S. NFT transactions are dispersed among countless computers that use electricity alongside other devices. 

Additionally, it’s worth considering if NFT transactions are the best use for excess renewable energy. After all, there is no shortage of people who need electricity. For example, unused green power could be stored for use during blackouts. 

This is exactly why many people are using solar batteries today. People can store unused solar power when it's sunny and use it on overcast days or during outages. Battery lifespans are determined by how frequently users charge and discharge the cell. By optimizing battery storage, utilities can use stored renewable energy more effectively. 

Why not apply the same principle to all excess renewable energy rather than attempting to allocate it for blockchain activity? Unfortunately, allocating excess renewables for NFT power consumption also has logistical challenges. Blockchain makes it virtually impossible to isolate the computing power used specifically for NFTs. 

Blockchain transactions, including NFT minting and sales, use the computing power of millions of individual users’ devices. Those items are also used for everyday tasks like working or gaming. There is no centralized computing center of any kind. 

Blockchain transaction. Image used courtesy of Unsplash

How would scientists or engineers allocate renewable energy to users running NFT transactions? These devices draw off a home or office’s electricity, typically subject to whatever grid or renewable energy is locally available. As a result, the problem of underutilized green power remains. 

Clean energy that’s unused due to a lack of available infrastructure to transport it is no more useful to NFT transactions than any other application. The only logistically streamlined way to power NFT activity using renewables would be to strengthen clean energy distribution infrastructure so more homes, businesses, and offices can get all their electricity from green sources. 

Reducing NFTs’ Carbon Footprint

While implementing You and Lal’s proposal could be challenging, there are other ways scientists and engineers can address the issue of emissions from NFT power consumption. Industry leaders are already taking steps to improve sustainability. 

In 2022, Ethereum founder Vitalik Buterin announced a plan, “the merge,” to eliminate 99% of the cryptocurrency’s emissions. The merge stopped cryptocurrency mining on the Ethereum network. Mining, or proof of work, consumes massive quantities of electricity responsible for blockchain emissions. 

Other cryptocurrencies could enact similar changes. Alternative blockchain consensus algorithms require far less energy than mining, such as the Proof of Stake algorithm Ethereum is now using. 

The scientific and energy communities should also prioritize expanding access to renewables. Fossil fuels still comprise 80% of the world’s energy supply, and many people cannot access clean energy options. People would use green power if it were a larger part of the grid. Underutilization is a sign that renewable energy distribution needs improvement. 

Can NFTs Be Sustainable?

NFTs and blockchain technology are not inherently bad for the environment. They simply need better-optimized infrastructure to reduce or eliminate their carbon footprints. Allocating energy resources specifically to NFT transactions would be difficult. However, other solutions exist, such as changing cryptocurrencies’ algorithms or expanding access to clean energy storage.