The Gemini-owned marketplace will purchase carbon offsets equivalent to twice the amount of CO2 it produces each month.
NFTs have become a hot topic lately. As their popularity has increased, so has the number of detractors and articles denouncing them for their environmental impact. And the critics may have a point – most NFTs are on the Ethereum blockchain, which has not yet transitioned away from proof-of-work, meaning it consumes a lot of energy.
Data from Digiconomist suggests that a single Ethereum transaction uses the same amount of power as the average US household consumes over 2.22 days and has a carbon footprint equivalent to 69,239 VISA transactions or 5,207 hours of watching Youtube. The annual power consumption of Ethereum, on the other hand, is estimated to be 30.84 TWh (more than the whole of Nigeria), while its annual carbon dioxide emission is quoted as 14.65 Megatonnes (comparable to that of Tanzania).
When ETH 2.0 is eventually rolled out it will upgrade Ethereum to a proof-of-stake blockchain which will make the network much more energy-efficient, but this is still some way off. In the meantime, many participants in the crypto world are looking for other ways to reduce their environmental impact, and the latest to jump onto the green bandwagon is the NFT marketplace, Nifty Gateway.
Gemini, which owns Nifty Gateway, announced on its blog yesterday that it will be estimating its carbon footprint and then purchasing offsets for twice that amount of carbon dioxide at the end of every month in order to become a net remover of carbon.
Buying carbon offsets means paying someone else to cut greenhouse gas emissions in order to bring down your own net emissions. This might involve financing a wind turbine generator or the planting of new trees. Nifty Gateway hasn’t specified what kind of offsets it will be using but there are crypto-based options available to them, such as the Universal Protocol Alliance’s tradable carbon tokens.
Nifty Gateway founders Duncan and Griffin Cock Foster also revealed that the marketplace had helped raise $6.5 million for the non-profit Open Earth Foundation through an NFT auction and that it was currently building a new NFT minting system that will leverage an Ethereum improvement proposal to make the process approximately 99% more efficient.
Griffin Cock Foster commented, “This is an exciting step we’re taking that I think is for the best – using carbon offsets, every artist can feel good about dropping on Nifty, and every purchaser can feel good knowing all blockchain-related emissions are being offset.”