Non-fungible tokens (NFTs) have been touted as a solution to everything from selling illiquid assets such as real estate to counterfeiting. In the latest use case being advanced, digital art, represented as NFTs, has the potential to counter climate change and drive a more sustainable digital economy. Are NFTs a panacea for many of the world’s woes, or will we look back on this period as another episode of collective madness, fueled by crypto collectors with more money than sense?
NFTs As A Force for Good
As the world is going digital, with virtual displacing physical, NFTs have emerged as the solution to a smorgasbord of problems. If their architects are to be believed, NFTs are capable of aligning incentives between artists and fans; facilitating provable scarcity; transforming e-gaming; and powering a burgeoning economy for digital collectibles.
But can NFTs really support climate change – a malaise they currently stand accused of exacerbating?
Because NFTs are issued and traded on energy-intensive blockchains that consume vast amounts of power, the argument goes, they are directly responsible for environmental degradation. Energy-intensive blockchains like Ethereum (albeit less intense than bitcoin) are used for the smart contracts required to mint and trade the NFTs, and create a direct carbon intensity associated to them that is climate culpable.
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