By now we know the internet community loves a good acronym. Well, here’s a new one that’s been cropping up over the last year: NFT. NFT stands for ‘non-fungible token’. So what exactly is an NFT and should we start filling our (digital) stockings with them?
Curious to find out more?
The term non-fungible token is hardly any clearer than its acronym form, so let’s see if we can explain it further. ‘Non-fungible basically means a thing is unique and can’t be replaced. An NFT, then, is pretty much any unique digital thing that is sold on a cryptocurrency ‘blockchain’. Here’s a quirky explanation of blockchain from the Verge but, put simply, blockchains are the record-keeping technology behind cryptocurrencies, with interconnected servers that share and record data without a centralised controlling location. That is: it’s basically a digital record or ledger saved across a whole network, which makes it (virtually) impossible to hack or cheat.
The idea of buy-and-sell crypto tokens has been around since 2013, but in recent years the application of NFTs has exploded. Their use is particularly on the rise in the art world, with some pieces selling for the cryptocurrency equivalent of tens of thousands of dollars.
In a world where customer consumption, instant gratification and fast fashion are doing extraordinary damage to the planet, perhaps purchases that live in the cloud are an environmentally-friendly idea?
Before you jump on board the NFT train, beside the big question mark around how something that exists digitally – like the side-eye girl meme or Twitter creator Jake Dorsey’s first tweet – can be protected from replication (and therefore be legitimately ‘owned, we here at Curious Earth think there’s another question worth asking: how environmentally friendly are NFTs?
Fudging up the environment
The controversy around the environmental impact of cryptocurrencies is massive. The process of spending and trading Bitcoin, for example, is reported to consume as much energy as a mid-sized European country. ‘Mining’ is one of the activities that contribute to this massive consumption (Check out our assessment of this issue).
NFTs are bought and sold with cryptocurrencies on a blockchain – with most sales being conducted with the hotly-criticised cryptocurrency Ethereum, and validated through ‘proof of work’ (a process similar to mining). All this makes their climate impact significant.
The true cost of crypto is debated, with some arguing that a large portion of cryptocurrency run off renewable sources. However, with about 65% of crypto mining coming from China, where coal makes up around 60% of the energy mix, it’s hard to ignore the red flags. Then there are the viral videos of a Bitcoin mining rig, depicting a sparse landscape and an oil rig connected to a server with a tangle of red wires, though it seems there’s more to the story than meets the eye.
Embrace the new or dust off the easel?
While many artists have jumped on the NFT bandwagon, some individuals and businesses are backing off their plans to step into the NFT world. Others are committing to offset the emissions from their NFT art, believing that cryptocurrencies and blockchains are the future and are on their way to becoming more environmentally friendly. When climate-conscious artist Joanie Lemercier found out that his six NFTs has consumed 8.7 megawatt-hours of energy in their sale, he launched a campaign (Cryptoart.wtf, since closed) with a friend to encourage NFT marketplaces to adopt more energy-efficient technology.
The climate impact of cryptocurrencies feels impossible to overlook. One particularly shocking study, published on nature.com, showed that global temperature could increase by 2°C through just an increase in bitcoin mining. Though of course, it’s worth noting that NFTs are a relatively small portion of all crypto transactions. If NFTs went away, mining and similarly energy-hungry processes would still remain.
What’s clear is that, whether you are an intrigued artist or a last-minute Christmas shopper looking for low-carbon options, it might be worth thinking twice before you buy into this new trend.
- There are many ways to build a sustainable business, check out this blog for some simple tips on sustainable sourcing, environmentally-friendly packaging and ethics.
- If you are an artist who is interested in NFTs, shop around for the most environmentally-friendly options: here’s a useful blog to kick off your research
- If you are a creative who cares about the environment, why not join a climate advocacy group like this one?