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  • Rajveer Sethi

Cryptocurrency and NFTs - Impact on the Environment

Cryptocurrency has been surrounded with controversy since nearly the beginning of its existence. Its genuineness, safety and real value have been debated for years. However, a lesser talked about part of cryptocurrencies is its impact on the environment. One of the most popular cryptocurrencies, Bitcoin, has a decentralized structure that drives its huge carbon footprint. The mining of bitcoin utilizes a ‘proof of work system’ which means to verify transactions, Bitcoin requires computers to solve more and more complex math problems which leads to it being drastically more energy intensive than verifying transactions on centralized networks. This problem becomes worse when specialized computers, called rigs, are used for mining of cryptocurrency which pour massive amounts of computational and electrical energy into the ecosystem in the race to be the first to solve Bitcoin math puzzles. It is estimated that each Bitcoin transaction uses around 2100 Kilowatt Hours which causes bitcoin alone to emit approximately 37 megatons of carbon dioxide in a single year, nearly as much as the entire country of Denmark. Currently bitcoin draws only 25.1% of its energy from renewable sources and until that percentage increases, crypto mining can lead to severe problems for the planet.

While cryptocurrency alone leads to severe problems, Non-fungible tokens or NFTs are on the track to causing even more serious issues. NFTs, originally started in 2015 have been gaining popularity in the last few years. In March 2022 alone almost 24 thousand NFTs were sold, and as they use a similar programming to cryptocurrency, they too cause damage to the environment that may not be repairable. A single NFT transaction on the Ethereum platform emits almost 150 kilograms of carbon dioxide and as the carbon budget is already set to run out in about a decade, problems affecting the Earth should be solved before new ones are brought into place. NFTs are the next big thing and are an important development to the economies of humanity, however no development should affect human and animal lives on this planet, and can lead to humanity’s premature demise.

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Sanskriti Sinha
Sanskriti Sinha
Oct 01, 2022

Awesome topic!

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