No sooner had the world learned about the existence of non-fungible tokens (NFTs) than we also learned how much of a problem they could be for the environment. An NFT is digital token in a similar way to Bitcoin, except there’s only one of each NFT. It is associated with a piece of content, guaranteed unique and so is worth whatever somebody will pay for it. In the case of a digital artist called Beeple, who had only ever previously sold a piece for $100, this was $69 million for an NFT for a digital collage of images called Everydays: The First 5000 Days sold at Christie’s in March. Bought by a collector in Singapore, this made him one of the world’s “top three most valuable living artists,” according to the auction house.
Whatever you make of this per se, there is a bigger problem and it’s the cost to everybody else and the planet. NFTs, like Bitcoin, use a simply astonishing amount of energy. Most of us have only just become aware of NFTs, yet already they are consuming more energy than some US states.
This is a feature of Blockchain verified tokens of this sort. According to Bill Gates, “Bitcoin uses more electricity per transaction than any other method known to mankind.”
The core problem seems to be that the verification of Bitcoin, a process known as mining, generates CO2 at the same rate as the global electricity mix.
The problem highlights a wider issue. We need to become far more aware of the environmental cost of data, especially as we wake up to the idea that it is a utility nearly as important in our day to day lives as fresh water, telecoms, gas and electricity.
Unlike the other utilities, there appears to be no upper limit on our demand for data. This in turn is driving the rapid expansion in the numbers of datacentres. Although exact figures seem unavailable, a 2018 estimate claims that the world’s datacentres produce as much carbon as the aviation industry. Another estimate suggests that each half hour we spend on Netflix produces the same amount of carbon as driving four miles, although it rests on the assumption that the energy is generated using fossil fuels.
The global datacentre sector is expected to grow at nearly 7 percent a year to 2030, so this is something we all need to be aware of.
Some firms are already setting out to provide greater transparency of their own data-related sustainability. Google has introduced a new publicly available metric that provides an indication of exactly how clean the company’s datacentres are around the world.?The firm’s carbon-free energy percentage (CFE) indicates the average mix of carbon-free and fossil-fuel energy that is used to power Google’s datacentres in a region. ?
The higher the index, the better. In London for example, the CFE is 54 percent. This means that for Londoners on Zoom calls or binging Netflix, they’re doing so with carbon free energy for just over the half the time.