Carbon removal NFTs are the solution to energy usage and carbon emissions from blockchain, crypto, and NFTs
Cryptocurrency and NFTs are the talk of the town now. And there are two key storylines that I keep seeing brought up:
- NFTs and the eye-popping amounts of money being paid for them
- The energy usage and carbon emissions of blockchain networks
What are non-fungible tokens (NFTs)? I’ll point you to Linda Xie’s excellent primer on what they are, and why they have value. The short version is they are digital representations of something that is provably unique. Non-fungible means it is unique and not equivalent to anything else. Proving something is unique in real-life is trivially easy. Obviously your iPhone is different from my iPhone because they are different objects. That’s harder to do in the digital world, because if you capture an image of something, it’s trivial to make a duplicate of the file. NFTs use some aspects of blockchain and cryptocurrency to prove with math that a particular digital file is “original” and “unique” relative to any potential copies of it. For example, artists and creators are using this to create all sorts of new digital art as the earliest use case.
At Nori, we use NFTs to represent unique certificates of carbon removal. We actually call ours NRTs (Nori Removal Tonnes), and it’s sort of a happy coincidence that the initialisms are only one letter apart. All NRTs are NFTs but obviously not all NFTs are NRTs, as the syllogism goes. For more on why Nori is using blockchain and crypto for carbon removal, start here.
The other major storyline around NFTs and cryptocurrency right now is about the large amount of carbon emissions resulting from operating blockchains like Bitcoin and Ethereum. I was quoted in this Geekwire piece about it, and there are countless other articles out there covering the issue.
For context, the website Digiconimist tracks how much energy and associated carbon emissions result from operating both Bitcoin and Ethereum. The estimates are enormous, and growing.
Right now, both blockchains operate using Proof of Work as the consensus mechanism, which really just means that there is an ever growing financial incentive for miners to throw more and more energy into the networks in order to make money.
Is that bad? Yes and no. Yes in that the world needs to emit less carbon. No in that both networks provide enormous value to humanity in the form of monetary freedom and democratization of goods and services. So the question then is, how do we get the benefits while mitigating the downsides?
The answer is:
a) For Ethereum, move over to Proof of Stake consensus mechanism, which will dramatically cut back on emissions from that network
b) Remove the carbon emissions for the entire networks
For a), there is serious interest from some key people in the Ethereum ecosystem to move to proof of stake this year.
For b), I did some math on this back in January:
And here I present updated numbers as of April 7th, 2021:
It would cost only $0.56 per Ethereum transaction to make it carbon neutral. To remove all emissions from both BTC and ETH at current carbon prices, it would cost about $1 billion. Bitcoin as a network is worth over $1 trillion! The carbon removal cost is only about 0.1% of the total market caps of both networks. This is not expensive in relative terms.
And in fact, this is the core proposition of what Nori does. We provide verifiable carbon removed in the form of NRTs recorded on Ethereum, and help businesses and consumers go carbon net zero and even beyond to carbon negative. Anyone can go to nori.com right now and purchase NRTs to take their business or blockchain transactions carbon neutral. And if you’re interested in doing some large-scale carbon removal, please get in touch with us at hello@nori.com.
