Cryptos and NFTs Take Their Foot off the Gas – How Using POS Chains Can Save Huge Amounts of Energy
Cryptos are rarely out of the news these days, but no more so than Ethereum, which is burning up the news headlines, as quickly as it can burn up the gas (mostly for NFTs, which are having a moment, and for its exorbitant transaction fees), and then, of course, there’s the king of crypto, Bitcoin which is making headlines for its astonishing price gains, and now also for the effect it is having on the environment. The same is true for Ethereum.
A recent Bank of America report shows that Bitcoin mining uses more energy than American Airlines in transporting 200 million-plus passengers each year. In fact, it emits more carbon than pretty much every other sector, on a level with major firms like carmakers and even the US federal government. It is not alone though, as Ethereum is rarely out of the news for its extraordinary usage of energy.
Both Bitcoin and Ethereum’s carbon footprint are intrinsically linked to their price. So the higher the price goes, the more miners start mining, thus increasing emissions. In turn, this means Bitcoin and Ethereum must become ever more complex to cope with the increased demand, which then necessitates more hash power, which means even more consumption of energy.
According to the BOA, Bitcoin is coveting as much energy as a small, developed country such as Greece, which populates over 10 million people. This comes at a time when firms and countries are trying to reach targets to lower their emissions.
The Bank of America said, “Given the relatively linear relationship between bitcoin prices and bitcoin energy use, it is perhaps no surprise that bitcoin’s estimated energy consumption has grown over 200% in the past two years”.
NFTs Are Hot Right Now
NFTs are the hot topic right now in the cryptosphere, but they are also hot because they are burning up energy at a rapid pace. “Space Cat” is a well-known NFT, a simple gif of a cat on his way to the moon. Sounds cute? Not if you consider that this cat’s carbon footprint is the same as a person from the EU’s electricity usage for 2 months. And that’s even before the rocket heads for the moon. According to the founder of cryptoart.wtf, a site that lets users analyze the carbon footprint of many NFTs, the average NFT uses more energy than a month’s electricity for an EU resident. The problem is that many of the marketplaces or websites that mint the art are based on the Ethereum blockchain, which has been built to be very ineffective and costly in terms of both money and energy.
Tezos is a smart contract chain that is helping to bring a solution to this problem. It is an open-source platform for assets and applications that is reaping the rewards from the focus being directed at Ethereum’s energy bill. Many NFT artists have decided to avoid the backlash that comes with the energy consumption related to their work by choosing to launch on Tezos, which is a Proof-of-Stake chain, which promises to be more friendly to the environment than Proof-of-Work chains.
How Much Less is The Environmental Impact?
According to the University of Cambridge calculation, quite substantial. Whereas Bitcoin consumes around 130TWh of energy and Ethereum’s of 26TWh, Tezos is around 60MWh. These numbers show a huge difference, with Tezos drawing 200 million times less.
One digital artist Mike Tyka has opted for the Tezos route for his NFT collection. He says that: “Minting NFTs using Ethereum would wipe out years of trying to reduce my personal climate footprint at the click of a button,”
“After discovering some recommended alternatives, I felt that if I’m going to enter this space, I want to support what I see as the only practical and ethical future of NFTs.”
As more developers and artists seek to escape the rising fees and energy consumption of Ethereum, they will surely be moving across from the Proof-of-Work networks, to the Proof-of-Stake Networks like Tezos to hopefully do their part to counter environmental challenges and to benefit from lower fees too.
Image source: Depositphotos.com
OhNoCrypto
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Mark Hampton, @KhareemSudlow