Environmental Impact of NFTs

‘There are two sides to every coin’. This quote has extra significance in the world of NFTs. While non-fungible tokens (NFTs) have given an altogether new definition to ‘art’, on the flipside, concerns regarding the CO₂ emissions caused by the generation of cryptocurrencies to purchase and sell these digital collectibles are abound too.

Could these adverse effects be controlled or reversed? Experts are indeed positive about the outlook for crypto. In this guide we will review the impact of NFTs on the environment, compare the environmental impact of NFTs to that of other industries, and also discuss solutions to make NFTs greener for our environment.

What are NFTs?

Before starting with the analysis of NFTs’ environmental impact, we’ll review what NFTs are, when they became a thing, how they are created and sold, what can be an NFT.

A Sneak Peek at NFTs

In economics, non-fungible assets are those assets that could not be interchanged with any other thing. For instance, these assets could include a digital painting, a GIF, a tweet, or any other thing which can be distinguished.

NFTs are one-of-a-kind assets in the digital world which not only are unique and non-interchangeable data units but also could be stored on a digital ledger. These NFTs are linked with items like videos, audios, photos, etc., and collectors who buy NFTs have public proof of ownership with the use of blockchain technology.

When did NFTs get started?

The concept of NFTs owes its origin to ‘Colored Coins’ developed by the creator of Ethereum, Vitalik Buterin. These coins were developed to create digital assets with the help of the blockchain. Later on, a peer-to-peer (P2P) financial platform ‘Counterparty’ was developed to create tradable assets or currencies for users.

With the popularity of this system, John Watkinson and Matt Hall developed a collection of 10,000 unique characters called Cryptopunks on the Ethereum Blockchain, which were rapidly traded online.

These cryptopunks inspire the creation of NFTs called CryptoKitties, which was based on a game revolving around collectible and one-of-a-kind creatures (cats) that are 100% owned by the users without any fear of its replication or destruction. The popularity of NFTs was skyrocketed with the news of Jack Dorsey selling his first tweet in form of an NFT. From there, things are just getting started for NFTs.

How can NFTs be created and sold?

How to create and sell NFTs is a question that stays in every artist’s mind. Everyone wants to create money from their artistic work through the means of NFTs.

First of all, you would need to pay the platform for creating (minting) an NFT for your work. For buying Ethereum, you would be required to have a digital wallet on any authorized platform. Read our guides to Ethereum wallets and NFT wallets.

Once you have created your digital wallet and added the required cryptocurrency (Ethereum) to it, you can create your NFT from any NFT platform. Upload your work, which you would want to make into an NFT, on that platform, and choose how you would want to sell your NFT.

Given an attractive description to your file, set the minimum price, and decide what percentage of royalty you would want to claim on reselling your art. Pay the listing fees of the platform, and your item would be ready to be sold in the form of an NFT.

What can be made into NFTs?

Any form of digitally reproduced file could be stored in the form of an NFT, for instance, photos, audios, videos, GIFs, tweets, art, and even memes.

One can generate an NFT from any item which holds value and can be digitally stored.

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