With reputation and planet at stake, brands need a clear view on the environmental impact of NFTs, the situation is vastly improved and improving.
One thing our clients always asking us when launching their NFT project is along the lines off, "should we be concerned about the environmental impact.". Whether they are asking because they want to preserve their reputation, or because they are genuinely concerned about the environment - we share both concerns. This topic is something that was once a large problem in the crypto and NFT world, but recent developments have changed how we think about this.
In September 2022 Ethereum, which is the most popular blockchain for NFTs, went through a 'merge', moving the technology from proof-of-work to proof-of-stake. This was essentially a code change that meant crypto 'miners' were no longer used which has dramatically reduced the carbon emissions of Ethereum by more than 99%. However the estimates for the reduction vary due to the lack of empirical data, but they range from 99% - 99.99%
The change is really quite dramatic, estimates are that the whole of the Ethereum blockchain used to produce 44 million tonnes of CO2 a year, and now only 870 tonnes a year. So although the environmental impact of an NFT collection would not be 0, it would be extremely small. It is wise to be conscious of this nonetheless, and if you want to really be sure that your NFT collection is not harming the environment, then this negligible amount can be offset.
We understand that offsetting is not perfect and often looks like greenwashing. However, there are many services that appreciate the greenwashing issue and are consequently Gold Standard verified. We use these for our clients projects to ensure that we are doing everything we can.
So what is the verdict? Although it's not yet perfect, Ethereum has made the necessary steps to mostly resolve any environmental concerns for NFTs that use the Ethereum blockchain. The limited carbon emissions it now produces are so minor compared to most business operation that people should not be deterred from pursuing an NFT project. In fact, NFT projects can be used to raise funds to protect the environment, stay tuned to find out how we are helping a client to achieve this.
NFTs are a tool that reach far beyond your existing audience and therefore they present ample opportunity for you to complement your business with an exciting new offering. You want to find out more, or how NFTs could help your business - get in touch today.
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