Environmental Impact of NFTs
Many people say that “the blockchain“ is bad for the environment. This is partially true. Yes, some blockchains need a big amount of energy to work. The short explanation for this is that computers across the world store the data, sign transactions and make it secure, instead of a single entity like a company or a bank that acts as a 3rd party validating a transaction. As NFTs run on blockchains, they also have an environmental impact. This is a topic we, but also the whole blockchain and NFT community is aware of. In order to understand the reason behind this impact, let’s dive a bit deeper on what blockchains are.
Another reason for the high energy consumption is that transactions have to be signed by solving very complex mathematical problems. This increases the security of the network, but at the same time needs a lot of energy. The big challenge for people who are trying to improve the energy efficiency is to find a balance between security and energy consumption.