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NFTs consume less power than you think

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In this article, we will give a brief explanation about NFTs in order to check the power consumption of NFTs with better knowledge. You can also find a more complete explanation about NFT at IT provider read.

Critics have dismissed NFTs for their alleged environmental impact, but their belief is often rooted in their poor understanding of the technology.

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NFTs have faced a lot of criticism regarding their impact on the environment. Much of the criticism is rooted in a misunderstanding of how blockchain works.
The main layer 1 blockchains that serve as the main hub for NFTs consume less energy than the naysayers imagine.
Ethereum reduced its energy consumption by 99.95% after the merger was completed, meaning NFTs are more eco-friendly than ever, but did the eco-backlash against digital collectibles make sense in the first place?

NFT hype and reactions

Is crypto-art destroying the planet? It seems that it is not as its opponents want you to believe!

A new cultural phenomenon swept the world in 2021. A generation of digital artists found a way to monetize their work on the blockchain through NFTs, causing the most sought-after pieces to sell for significant sums.

Beeple made global headlines in March when he sold an NFT for $69 million at Christie’s. Avatar-based NFT series such as Bored Ape Yacht Club also became popular.

Bored Apes launched in April and has been endorsed by celebrities like Paris Hilton, Jimmy Fallon, and Snoop Dogg. A year later, their floor price reached about 435,000 dollars.

Most of the NFTs that emerged during the 2021 boom were when Ethereum was using Proof-of-Work (a famously energy-intensive consensus mechanism that also secures Bitcoin).

This caused a backlash from some mainstream media and cryptocurrency outsiders as they began to question the environmental impact of the technology.

While concerns about the environmental impact of any new technology are natural, many criticisms of NFTs are based on misconceptions of how blockchains work. So, how much power do NFTs really consume? The data suggests that it is less than many critics think.

How do blockchains work?

The most common misconception about NFTs and their environmental impact is the carbon footprint of making a blockchain transaction. Many believe that transactions cost a certain amount of energy, but this is not the case.

Blockchains are cryptographic accounts or ledgers. This ledger keeps all the transactions of the network as a block. New blocks are created at regular intervals to update the ledger with new transactions. Bitcoin creates a new block approximately every 10 minutes, while Ethereum does so every 10-20 seconds.

Blockchain networks are secured by service providers. Proof of Work blockchains like Bitcoin rely on miners, while Proof of Stake blockchains like Ethereum rely on validators. Miners and validators are responsible for adding new blocks to the chain at a fixed rate.

Miners need to provide specialized hardware and lenders need equipment to participate in their respective networks. While both consume energy, the extraction process consumes much more energy.

The energy consumption of block producers does not depend on the level of activity in the network. Whether there are no transactions or thousands of transactions in a given period, blocks are generated at the same rate. In fact, blocks are often added to the chain with plenty of space.

Adding an empty block to the chain requires the same amount of energy as a block full of NFTs. In crypto, the entire network consumes energy – not individual transactions.

Gas price disambiguation

Does occupying block space have consequences? Yes, but not in terms of energy consumption. For example, in Ethereum, users pay gwei for block space. One gwei is worth one billionth of ETH. These are the “Gas Price” crypto natives refer to when it comes to transaction fees.

Buying, selling or sending NFT uses the same amount of Gas as any other cryptocurrency transaction. While NFTs may take the form of digital art, music, or domain names, they live as tokens on the network. Sending NFT does not occupy block space compared to sending any other type of token.

That being said, slicing an NFT requires significant block space. Some of the expected mints have caused the price of Gas to skyrocket due to network congestion by NFT fans simultaneously fighting for block space. On the other hand, the Metaverse World project by Yoga Labs, creator of Bored Ape Yacht Club, spent more than $150 million in gas fees on its NFT virtual land in April.

But while complex operations like NFT multiplication can have higher transaction fees, blockchains don’t consume more energy. Gas prices are the only changing variable. Energy consumption does not change even if the price changes.

Ethereum energy consumption

Ethereum is the world’s largest smart contract platform. It was the focal point of the NFT boom in 2021, hosting well-known collectives such as Bored Ape Yacht Club, CryptoPunks, and Fidenza. The largest NFT marketplace, OpenSea, launched with support for Ethereum before expanding to other networks. Since Ethereum is effectively the home of NFTs, it’s important to consider its energy consumption to understand how much impact NFTs have on the environment.

During its first seven years, Ethereum used a Proof of Work consensus mechanism similar to Bitcoin, which helped NFTs gain a bad reputation early on. According to the Ethereum Foundation, the network’s electricity consumption at the time of Proof-of-Work reached 94 terawatt hours per year, which is slightly more than the energy consumption of Bolivia.

While Ethereum’s energy consumption increased from 2021 to early 2022, it dropped by around 99.95% when the network “merged” into Proof of Stake on September 15th. This is because the network is no longer dependent on miners to generate blocks. According to the Ethereum Foundation, the network currently uses about 0.01 terawatt hours of electricity per year.

NFT power consumption
After moving to Proof-of-Stake, Ethereum now consumes less energy than many services used by ordinary people, such as PayPal, Netflix, and YouTube. As the Ethereum Foundation says, “it’s estimated that people used 45 times more Ethereum Proof of Stake energy in a year watching Gangnam Style in 2019.”

Additionally, Ethereum fosters an active regenerative finance community that aims to create decentralized financial protocols that have a positive impact on environmental issues. Ethereum has reduced its high energy consumption and is gradually becoming an environmentally and socially friendly technology.

Power consumption of NFTs on other blockchains

While Ethereum is the main hub for NFTs, it is not the only network that hosts them. Other blockchains such as Solana, Tezos, Polygon and BNB Chain have all cultivated relatively strong NFT communities. None of these networks use Proof-of-Work.

Solana’s September 2022 energy consumption report states that the blockchain consumes about 4,056,273,936 joules per hour. This equates to 9.87 kWh (or just under 0.01 TWh) per year, which is slightly less than what Ethereum currently uses.

According to Tezos estimates, Tezos is more energy efficient than Ethereum and Solana, using 0.001 terawatt hours per year. The Proof-of-Stake network has touted itself as a “green” blockchain, inspiring many eco-conscious crypto-artists to carve out their work on the network.

Polygon is a scalable Ethereum solution that hosts its own NFTs supported on OpenSea. The Polygon team’s 2021 estimates put the grid’s energy consumption at around 0.00079 terawatt hours per year, and blockchain has recently committed to becoming carbon negative. In September 2022, Polygon stated that Ethereum’s transition to Proof-of-Stake would reduce the carbon footprint of the scaling solution by 99.91%, bringing it to 56.22 tCO2e per year. This amount of emissions is approximately equal to 12 gasoline cars.

While BNB Chain does not share its energy consumption data, it uses Proof-of-Stake like Ethereum. However, it is only secured by 21 validators that require specialized hardware to process the massive power of the chain. BNB Chain will probably use the same amount of energy as its Layer 1 competitors.

Summary of NFT power consumption

Energy consumption is a complex and delicate issue. Even Proof of Work blockchains like Bitcoin can be environmentally friendly. It depends on the energy sources they use. For example, miners using solar, thermal, hydro or nuclear energy are more environmentally friendly than miners using fossil fuels.

As Bitcoin advocate Nick Carter tirelessly argues, crypto mining is a much greener industry than critics say.

It’s also worth noting that criticisms about energy consumption are usually selective. YouTube consumes more electricity than Bitcoin, but it doesn’t face much pressure to go green.

NFTs have been heavily criticized by the news media and major skeptics, but that may change if more people start learning about Proof of Stake or interacting with the technology.

In any case, due to the low power consumption of NFT, collectors do not need to worry about the environmental impact of their chain activities. Transactions do not increase energy consumption. This is simply not how blockchain works. Most importantly, networks like Ethereum, Solana, and Tezos consume very little energy.

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Adib

Adib Zahedi is the CEO and Founder of mazhd.com. He has nearly a decade of experience in IT, including two years spent working on a Youtube Chennal. He is also an author and writes articles for mazhd.com. Has articles include tutorials and covers everything from Windows PCs to smartphone's software.

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