Due to a recent viral hit piece on Youtube about NFTs, there is now a major misconception circulating about the effect of NFTs on the environment. In our own experience, when bringing up the topic of NFTs, an alarming proportion of people will unequivocally state that they are bad for the environment and proceed to quote inaccurate figures to back up their point.
We know that Cryptocurrency as a whole is having an undeniable effect on the environment, this is a fact backed up by several credible studies.
However, when comparing different networks such as Ethereum and Avalanche, there are discernible differences in their ecological footprint and impact on the world.
Subnets are coming…https://t.co/dZ8I7QTGF5
— cryptφnacci 🔺 (@Crypt0nacci) March 3, 2022
The Crypto Carbon Ratings Institute (CCRI) recently assessed the carbon efficiency of six leading proof-of-stake networks and their proof-of-work counterparts. Coming to the conclusion that the Avalanche network consumes 35,000x less energy than the Ethereum network and 200,000x less than the Bitcoin network.
Bitcoin consumes the same energy as 8.5 million U.S households annually, with Avalanche consuming the equivalent of 46 U.S households. The study notes that electricity-intense Proof-of-Work protocols are largely responsible for the negative public opinion towards energy consumption, and this, in turn, affects the mainstream NFT public opinion. But also states that it is important to differentiate between blockchain protocols as environmental impacts greatly vary, noting that Proof-of-Stake protocols, such as the one used by the Avalanche, consume only a tiny fraction of electricity in the validation process of transactions and ownership compared to protocols such as Bitcoin.
Admittedly, Avalanche is currently dwarfed by Ethereum and Bitcoin in terms of Market Cap and adoption, however, when it eventually scales up to 200x of its current activity and dethrones Ethereum and Bitcoin, it would still be using the equivalent energy of 1000 U.S households annually.
NFTs currently represent a tiny amount of the daily activity on the Avalanche Blockchain, but with the emergence and popularity of P2E games, they are starting to really demand attention.
The question of Are NFT’s Bad For The Environment has a simple answer and that is, No, if you choose the right blockchain.
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