Whether you’re a crypto enthusiast or a mainstream normie, it’s impossible to avoid hearing talk about NFTs in recent weeks.
Athletes from Serena Williams to Rob Gronkowski are getting in on the craze after NBA Top Shot made NFTs a hot topic in the sports world. Celebrities like Jay-Z and Emily Ratajkowski are looking to turn their social capital into cold, hard cash. Even SNL is getting in on the action.
But just how much gas is it taking to fuel all that hype? Are NFT’s responsible for large amounts of gas, and, in light of the growing concern about how crypto projects are consuming energy, are they having an adverse impact on the environment? To get the answer to those questions — and a few others— we’re diving into Flipside Crypto’s data on NFT transactions with some help from visualizations provided by GJ Flannery and Angela Minster.
So what did we learn?
NFTs account for a small share of total gas…
First off, we learned that, on the grand scale, NFTs account for just a tiny fraction of weekly gas consumed. As you can see in the chart below, NFTs (represented by the thin green bar near the bottom) are dwarfed by other sectors when it comes to gas usage.
That’s largely because the most popular NFT transactions — those on NBA Top Shot — aren’t burning nearly as much gas as other types of transactions. Top Shot has hosted more than 20 times the transaction as the #2 NFT marketplace, Axie Infinity, and comprised more than 85% of all NFT transactions. But because Top Shot is powered by Flow, a proof-of-stake blockchain that requires minimal environmental impact, it has a much smaller impact on the environment.
We can get a better understanding of the small share of gas NFTs use by comparing them to all other types of transactions, as we did in this chart below.
So, are NFTs bad for the environment? The obvious answer seems to be no.
“One immediate reply to ‘NFTs are bad for the environment”, Flannery pointed out, “could be that 85% of NFTs have very little environmental impact at all.”
…but they do use a lot of it
But that immediate reply would be only a partial truth.
Because, as Flannery noted, while NFTs account for a small share of total Ethereum transactions, they do use a lot of gas per transaction when compared to other Ethereum movements. On April 1, for example, NFTs, excluding Top Shot, consumed roughly five times the gas of other Ethereum transactions.
So, while NFTs aren’t responsible for a large portion of gas now, they could one day have a serious impact on the percentage of total gas consumed if Ethereum NFT markets become as popular as Flow’s.
The final verdict
So, what’s the answer? Are NFTs an environmentally friendly way to participate in the crypto ecosystem, or just another gas guzzler with serious consequences on the environment?
Unfortunately for those hoping for a clear-cut solution, the answer to that question remains unclear. As we can see above, NFTs are currently responsible for a very small part of overall gas usage and represent a tiny slice of overall network transactions.
But over the long term, NFTs could eventually become a major gas burner. That could make Ethereum’s ongoing transition to proof-of-stake, along with other proof-of-stake chains like Flow, even more important to the future of NFTs.