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Friday, January 27, 2023

Opinion

NFTs harm the environment, people should not invest


nfts

Jose Gonzalez-Campelo/The Cougar

People should not invest in non-fungible tokens as they harm the environment at an alarming rate just to benefit a small minority. 

Within the investment world, people are always looking for the next big thing to expand their economic portfolios. With NFTs, their distinctive qualities and ability to participate in various markets draw the attention of investors. 

Starting from cryptocurrencies like Bitcoin, NFTs are the items you can buy with that cryptocurrency. One of the more common NFTs are pieces of art but almost anything can be turned into an NFT. 

The idea of cryptocurrency is to be able to instantly exchange and receive currency on a worldwide scale without the restraints of currency exchange rates and the time-consuming processes that come with banks. It splits the process among a group rather than a centralized entity like a bank. 

It ultimately changes the way currency flows through the world, but just because it is considered an ‘advancement’ from current times doesn’t mean it is the best way. 

The issue with NFTs is not the item itself but the way they are created and maintained. 

Blockchains are the backbone of cryptocurrency as it’s where NFTs are stored and transferred. However, the energy and resources it takes to create and transfer NFTs on a blockchain are monumentally disastrous to the environment. 

One transaction via a proof-of-work blockchain produces over 1600 pounds of carbon dioxide which is equivalent to 1.7 million Visa transactions or over 120,000 hours of watching YouTube, according to Investopedia. 

This is because a blockchain is focused on creating a unique token that leaves a transparent digital footprint in the world. A block is created and once that block is filled with information, a new one follows it in a chain which is where the name originates from. 

These blockchains are essentially irreversible which makes them difficult to alter or hack. If someone were to attempt to alter the information in a blockchain, people will notice quickly as blockchains have a strictly chronological order to them and are shared on a network. 

Some blockchain developers are aware of the harm that NFTs cause to the environment and have created a different blockchain process called proof-of-stake which allows one transaction to produce less than 1 pound of carbon dioxide which is equivalent to 44 Visa transactions or three hours of watching YouTube. 

However, even if the amount of carbon dioxide released into the environment is lessened, it doesn’t eliminate the effects it has already created on the environment. 

With so many people getting on the NFT train, a majority of them only care about the monetary gain and turn a blind eye to the environmental disasters their actions are contributing to. 

NFTs are considered the future but the irony of that statement is that there might not be a future with the way digital tokens are harming the environment. 

People should do more research to understand the risks of NFTs as they will realize that investing in them will do more harm than good.  

Cindy Rivas Alfaro is a sophomore journalism major who can be reached at [email protected]

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