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Non-Fungible Tokens (NFT) Newsroom

NFT Sustainability Part One: Defining The Problem

NFT Sustainability Part One: Defining The Problem

When researching the environmental impact of NFTs, it’s easy to be swept away by the numerous energy-consumption analogies.

  • The Ethereum blockchain consumes as much energy annually as Switzerland.
  • Mining Bitcoin uses more electricity than entire countries like Argentina, Sweden or Pakistan.
  • A single transaction on the Ethereum platform consumes an amount of energy equivalent to the power consumption of an average U.S. household over 5.51 days and also generates a carbon footprint equivalent to 201,577 Visa transactions or 15,158 hours of watching YouTube.

These statistics can make your head spin! They also help paint a vivid picture that captures the environmental implications raised by many individuals in the blockchain arena.

There are indeed legitimate concerns regarding the climate and environmental impact of the energy-intensive methods used to generate NFTs and build metaverse ecosystems. While some question whether the NFT boom is over, and despite fluctuations in transaction volume, the number of active NFT buyers and sellers continues to grow. As NFTs continue to become embedded in the global society, it’s important to be mindful of how this new digital technology implicates the natural world.

Why Do NFTs Consume So Much Energy?

NFTs are energy-exhaustive because they are hosted on blockchain platforms. Blockchain is a technology that permanently records transactions, typically in a decentralized and public database. NFTs are largely based on the Ethereum blockchain. The Ethereum blockchain uses what’s called the “proof-of-work” operating method to mint NFTs (minting means converting a digital file into a digital asset). According to Investopedia, “the purchase of an NFT is often the catalyst for the NFT to be minted. Using proof-of-work, the NFT is minted—or “mined”—by cryptocurrency miners who control extensive computing resources. The mining process is energy intensive, with specialized computing hardware that uses vast amounts of electricity.” In addition to the minting process, transferring NFTs can also consume a great amount of energy. Once the NFT purchase is complete, the NFT can be stored in a wallet or transferred to another person. If the NFT is transferred to another NFT platform that uses proof-of-work, the same energy-intensive process that was used to mint the NFT is repeated for the transfer.

Minting (and subsequently transferring an NFT to another person) is generally a very energy- intensive process. Many blockchains run on the high energy-consuming proof-of-work mechanism, however, this is not the only mechanism blockchains use. The “proof-of-stake” operating method uses less energy than proof-of-work because it does not require the extensive use of computing hardware. As per Investopedia, crypto-miners participating in a proof-of-work blockchain network are motivated to consume electricity in an attempt to successfully mine a block. Conversely, crypto-miners contributing to a proof-of-stake blockchain are required to stake (agree to not trade or sell) their cryptocurrency holdings. Implementing a staking requirement for blockchain validators is a way to secure a blockchain without requiring the network’s participants to excessively consume energy.

The Good News

NFTs are still relatively new. Many people, brands, and companies are taking action to educate themselves about the environmental impact of NFTs and are developing methods to mitigate the harmful effects associated with excessive energy use. The blockchain platforms that currently utilize proof-of-work seem to understand the environmental implications caused by the minting process and are starting to transition to the proof-of-stake system. As an example, Ethereum recently announced that it will merge with the proof-of-stake system reducing Ethereum's energy consumption by ~99.95%. There are also other blockchain platforms that use the proof-of-stake mechanism to support the creation and transfer of NFTs.

Part Two of this article will highlight environmentally-friendly initiatives and NFT projects that help combat climate change and environmental concerns.

What are your thoughts regarding NFT sustainability? Let us know by connecting with Ingram’s NFT Newsroom on Twitter and LinkedIn or send us an email at

By: Olivia Lee Jones