March has certainly been a hot month for NFTs. First they generated an enormous of hype only to be subsequently rendered a speculative bubble, then eco-activists turned up and declared them an environmental disaster. They’re backing their claims with some impressive (or rather alarming) calculations, going as far as to compare the carbon footprint of transactions with certain NFTs to the equivalent amount of times one could boil a kettle (up to 3.5 million times per transaction). But how does the ecological footprint of minting crypto actually stack up against traditional means of payment?
Right now, the Bitcoin ecosystem consumes roughly 140 Terawatt-hours of energy per year, which is comparable to the yearly energy consumption of a middle-sized developing country. That’s a lot of energy for a community that numbers about 1.2 million daily users — there’s no arguing with that. And yet, at the same time, the entire Bitcoin network currently requires less than 10% of the energy consumed by the world’s banking system.
So here’s the thing about banking and monetary systems. A 2010 study by Ahlers found that over 3,530 tonnes of ink, 7,100 tonnes of cotton, and 2,300 tonnes of linen are consumed yearly during the printing of the U.S. dollar. It’s hard to calculate the exact amount of carbon dioxide emitted during the production of these materials, but one could most certainly argue that’s a great deal of CO2. And that’s just the U.S. dollar alone — we’re not taking other 180 existing currencies into account.
Then there are coins — around 60 billion of them are minted per annum worldwide. In order to produce that many, one would require around 210,000 tonnes of copper and steel. The carbon footprint of mining this amount of metal equates to 3.5 million tonnes of CO2. And let’s not forget about credit cards — around 6.5 billion of them are made every year. So how much plastic is required to produce this amount of cards? What’s the amount of CO2 released into the atmosphere during the manufacture of this plastic? There does this plastic go after the card has reached its expiration date? How many orcas a day choke on these cards?
Add other unaccounted environmental costs of the day-to-day functioning of monetary and banking systems to that, and suddenly traditional economy turns out to be the actual villain here. For real, when it comes to CO2 emissions, traditional money has nothing on crypto. And yet, for some reason, no one’s blowing the whistle about the ecological footprint of the former.
If eco-activists found out about the actual carbon footprint of the U.S. dollar, would they stop paying Starbucks for their lattes and cappuccinos in cash? Most importantly, would they consider giving up lattes upon discovering the carbon footprint of making one? Doubtfully so, since latte and U.S. dollar banknotes constitute an integral part of their ordinary existence. NFTs and Ether don’t. They just happen to be something new and relatively unfamiliar, something that has only recently entered the public eye — that’s why they are currently being bragged about so much.
The bottom line is, collecting cryptoart as a hobby involves roughly similar environmental repercussions as any other activity associated with high energy consumption. In the same vein, minting BTC or ETH as a means of gaining private profit is just as bad for the environment as minting cents, producing plastic bags, and making nice-looking cars. Since we can’t give up on all these things at once, it would be better to start looking for other, more reasonable ways to address the problem.
