A day and a half’s worth of energy consumption in a typical household.
Operating a refrigerator for one month.
Riding an average car for 192 km.
A single NFT transfer on Ethereum.
What do all of these actions (and one transaction) have in common? They all equate to around 48 kg of CO2 emitted.
As NFTs have barreled into the mainstream over the past two years, the lion's share of conversation, and unfortunately, criticism, has revolved around the excessive amount of energy it takes to mint, transfer, and trade NFTs—of which there are millions of transactions happening each day. The conversation stems fr om the fact that blockchain in itself, fr om the core principles of Bitcoin to NFTs, all require mining and the transfer of "blocks," which use energy. As Ethereum first emerged as the breeding ground of the NFT explosion, analysts, media, and curious consumers have discussed and debated what a more sustainable future looks like for NFTs.
Eth 2 Proof of Stake—What Relief Really Looks Like
Many look to Ethereum 2.0, the long-awaited upgrade that aims to improve the network's scalability and security through a transition to a Proof of Stake consensus mechanism, as a potential solution for the negative energy output of the NFT ecosystem. Proof of Stake rewards network validators with transaction fees for providing security and availability to a network, versus Proof of Work, which rewards miners for adding blocks and solving cryptographic puzzles (hence requiring much more hardware and energy output). If you need a bit of a refresher or definition, a blockchain validator is someone (a computer node) who is responsible for verifying transactions on a blockchain; they maintain the blockchain's integrity by constantly computing the linkage from the first block to the last. Once transactions are verified, they are added to the distributed ledger, i.e., the blockchain.
While we believe Eth 2.0 and Proof of Stake will certainly be a step forward for Ethereum, annual energy consumption doesn't paint the greatest picture when you look closely at the data. This observation is especially true when you compare Ethereum 2.0 to other blockchains which use a Proof of Stake Consensus model. In fact, according to an article on Yahoo, it still ranks last, while in piece on Bloomberg, Polkadot comes in as the blockchain with the smallest carbon footprint. If you need more proof, take a look at the CCRI 2022 report on carbon ratings in blockchain.
Due to our data analysis of NFT energy consumption across three major blockchains, annual consumption on Ethereum 2.0 is at 70 GWh, with an output of around 45g of CO2 for a single NFT mint. That's equivalent to 9 full smartphone charges. On Tezos, another next-generation blockchain, annual consumption through Proof of Stake runs at 2.5 GWh, with a per-NFT mint of 1.1g, equivalent to an hour of recorded video.
At the moment, with the way Eth 2 is being designed, the network will run at up to a million block validators, an exponential rise from wh ere it currently sits, a much more conservative (and environmentally hopeful) 385,000, roughly 1/3 of the way to a total of one million validators. So it would help if you kept in mind that the 45g of CO2 we mentioned above will look a lot higher when the great 2.0 merge finally happens. So what are some solutions to the above problems, and how exactly are we a part of shaping them?
Growing an Eco-Conscious Ecosystem
Enter Polkadot, the blockchain of our Unique Network's own parchain, wh ere we are currently building the future of next-generation NFTs, which until now have been virtually nonexistent and unknown to this dynamic platform. At an annual consumption of 2 GWh, NFTs on Polkadot burn a mere .05 g of CO2, equivalent to breathing…for four short seconds, making it the most eco-conscious blockchain, and more specifically, of all the Proof-of-Stake chains. In comparison to Eth 2.0's standard Proof of Stake consensus mechanism, which allows anyone to be a validator if they have 32 Ethereum (a considerable but rather approachable amount of money) – a process that, in the end, really awards validator for availability, and not for power to the network's security and stability.
Polkadot, however, uses NPoS (nominated proof-of-stake) as its election mechanism, designed with the respective roles of validators and nominators. Stakers who are willing and available to maintain the network can run a validator node, while other Polkadot stakers act as "nominators," who can choose up to 16 validators to produce and provide stability to parachain blocks.
Ultimately, Polkadot NPos mechanism makes it possible for the blockchain to reduce the total number of validators on the network to only 1,000, a drastically lower number than the one million nodes that Ethereum 2.0 will contain. This reduced energy output is far more eco-conscious and even more secure, decentralized, and accessible, as securing the ability to nominate a validator equates to having only one $DOT—Polkadot's native currency, which is around $10 at the time of writing.
Solving the Scalability Dilemma & the Power of the Parachain
While Eth 2.0 promises to drastically reduce CO2 emissions to a more attractive yet not groundbreaking 45 grams per NFT mint, vast network congestion will still remain, which increases the reality that more people than ever are straying away fr om minting NFTs on Ethereum because it's simply so expensive, and even primitive, to operate NFTs there. On a parachain like Unique Network, however, a minuscule 1.3 micrograms of CO2 emissions per transfer is an ultimate efficiency that's not just possible but probable. The scalable nature of parachains, which offer interoperable features like XCM cross-messaging, forkless upgrades, and a far more sustainable validator infrastructure, create a future wh ere more dynamic use cases, like advanced blockchain games, are within our reach.
As a complex chain that's still in its infancy, we still have a lot of hard work ahead on Polkadot, especially as the first NFT project in the ecosystem. We undoubtedly need more skilled developers who are devoted to the dynamic and sustainable power that Polkadot holds and all that it can offer the blockchain. We need more simplified education and discussion. This challenge (and opportunity) is why at Unique Network, we're building accessible tools that bring that unlimited power of Polkadot to the masses for a greater, greener and more advanced future in NFTs for us all.