Crypto Coins and NFTS; fuel for the future or Greenhouse gas abuser?

Cryptocurrencies have been the topic of discussion for several reasons from volatility, to new money individuals and the list goes on. However, one thing that is particularly mentioned about crypto is its legacy of carbon emissions and its ties to NFTS.

To understand why Crypto, a digital asset contributes to greenhouse gas emission you must first understand how it's made, how it's used, and how it's tied to NFTs. Firstly  NTFs are known as non-fungible tokens, what this means is that it is a completely original token that typically takes the shape of digital art pieces but can essentially be anything, even a tweet. So in that regard, you exchange one token for another and you get something completely different in return, unlike trading crypto where there are identical coins available. This uniqueness allows the NFTs to be sold at ridiculous prices such as the Nyan cat meme that sold for over $500,000.

How this ties into climate change and crypto is that each piece of NFT produced is bought using cryptocurrency such as Ethereum, and Ethereum utilises a system that requires large amounts of energy to produce a secure transaction. This is called proof of work and consumes the same amount of electricity as the nation of Libya. Nyan cat also used as much as a French citizen for two months of electric consumption.

Through these extreme examples, it’s not hard to imagine that the world we are living in sees a massive problem with this. NFTs have become a taboo market as many see dealing with them to be highly unethical and environmentally damaging. However, there are alternatives to the proof of work system, that being proof of stake, where users have to hand over their tokens to safeguard their intentions of keeping the transaction accurate rather than just making them pay through large electric fees like that of proof of work. Many hope for Ethereum to adopt this system.