You can be an environmentalist and buy NFTs too!
One of the biggest criticisms of non-fungible tokens NFTs is that they adversely affect the environment. To buy an NFT, you would use some sort of cryptocurrency which is mined using energy-intensive mining rigs. Estimates suggest that Bitcoin mining consumes 180 terawatt-hours of electricity annually. Due to the increased pressure to produce electricity, as well as the e-waste generated from discarded mining rigs, Bitcoin mining has the capacity to push global warming above 2°C. What’s more, minting an Ethereum-based NFT art requires over 142 kWh of energy and generates 83kg of carbon dioxide.
So if you like NFTs and invest in them, not only are you paying a hefty price yourself, but you are also making the environment pay for your purchase. NFT developers understand this and have been actively trying to create NFTs that can slow down or even reverse the effects of climate change. But is it entirely possible to do so? Let’s try to understand how NFTs can be made more environmentally friendly and look at some of the green NFTs for you to consider investing in!
Creating sustainable NFTs
To create an eco-friendly NFT, developers need to have a roadmap of how they will release and sell their products. Some steps that can be taken to create sustainable NFTs include lazy minting (not minting the NFT till it is first purchased) and minting NFTs on chains other than Ethereum. Another alternative is NFT bridging, where an NFT is made operable on and transferable between multiple blockchains, thus making it possible for users to switch from Ethreum to other less environmentally harmful chains.
Eco-friendly NFT projects
TrashPiles – supporting sustainability efforts
TrashPiles is a charity NFT project that intends to donate US$100,000 to the ocean-cleanup fundraising campaign, TeamSeas, from the profits from the sale of NFTs. After initial sales, Trashpiles has set a recurring donation from the 5% transaction fee on secondary marketplaces. Besides just supporting environmental projects, the developers of the project have also made the choice to host their NFTs on a more environmentally conscious blockchain, Solana. Solana has self-reported that a transaction on its blockchain consumes less energy than two Google searches. The project was launched in January this year.
Moss.Earth – offsetting carbon emissions
Moss.Earth is a climate tech startup geared towards helping both organizations and individuals offset their carbon footprint by tokenizing carbon credits (digital permits acquired to offset carbon emissions) generated in the Amazon rainforest. Burning one MCO2 token, Moss.Earth’s flagship product, is equal to offsetting one ton of carbon dioxide emissions by funding environmental projects in the Amazon forests. The project was launched in 2020 and has since sent US$30 million to Amazon preservation projects.
In February this year, they announced the launch of their Moss Amazon NFTs. Upon buying these NFTs, holders get ownership over a piece of the Amazon forest. Holders cannot harm the forest in any way, but they are allowed to monitor it using remote sensing tools provided by the tech company, Descartes Labs. 20% of the proceeds from the sale of these NFTs would be used to cover the cost of ensuring the security of the area and providing satellite imagery. The company has self-reported that Moss Amazon NFTs sold out in the first hour of their launch.
Greenverse – reducing resource consumption
Greenverse is a green metaverse hoping to reduce the effects of climate change by incentivizing the preservation of underground resources. Using a preserve-to-earn model, natural capital resources are tokenized, and the holders of these tokens will receive additional rewards by preserving instead of developing the resources. Some of the benefits to holders include non-production carbon credits and biodiversity credits.
Under this model, real-world land is turned into blocks. Each block has a twin digital land NFTis valued based on its carbon emission potential, biodiversity and mineral content. At present, the project is pioneering in Greenland’s Jameson Land, which is home to several endangered species. The project is set to be launched this year in summer.
Why aren’t more NFT projects concerned about the environment?
The main reason why more NFT projects aren’t adopting environmentally friendly practices isn’t that they don’t care about the environment. Rather, it has to do with the financial risks attached with doing so.
NFTs are stored on blockchains and transacted with cryptocurrency. Cryptocurrencies, even well-established ones like Bitcoin, have a history of being volatile. This volatility is particularly visible in cryptocurrencies with smaller market capitalizations (relative to Ethereum, where most NFTs are stored). Hence, although some new cryptocurrencies and their blockchains (e.g. Solana, Cardano, Algorand) might seek to create eco-friendly solutions or improve their environmental credentials, their smaller market cap might make them more prone to sudden crash and complete disappearance from the market. This is also why smaller or newer blockchains would also have fewer NFT collectors and projects on them and thus fewer sales.
Projects we mentioned earlier highlight that attempts are being made to become more environmentally friendly. As time passes, we would only see more such projects with unique ideas emerge and become mainstream.
Header image courtesy of Freepik