NFTs and the environment

Naomi Oba
Published in
5 min readJan 19


In the past few years, NFTs have gone from being a mainstream digital asset only crypto people were aware of to an asset type leveraged by big brands such as Nike. However, with the recent rise in attention, the debate around NFTs' impact on the environment also has heated up.

In this article, we'll share thoughts on NFTs and the environment and what we believe the future might look like.

What are NFTs, and why do they matter?

NFTs, non-fungible tokens, are a type of token running on blockchains that enables the creation of unique assets. What's been impossible to achieve previously in the digital space, having art that cannot be copied, is now possible with NFTs. That's why they have been an excellent asset for digital artists enabling them to properly monetize their art — often for the first time, and generally a great contributor to the creator economy.

They also have found their way into digital fashion, the metaverse, and are a pillar of web3 gaming projects that want to empower players to own any in-game assets they earn throughout gameplay.

When thought of as a container, there are many more fascinating use cases for NFTs, such as sharing confidential information with another party or storing data in a time capsule (an idea that started the creation of ternoa). NFTs that cannot be transferred (also called soulbound tokens) is considered a potential solution to the challenge of managing reputation in a decentralized space and could serve as a tool to provide identification in web3.

Beyond that, NFTs could even find use in the financial world, representing users' positions in different liquidity protocols or as a tokenized real-world asset that accrues earnings.

With many potential use cases of NFTs, we've' barely scraped the surface. However, before their wide-scale implementation, it's' worth considering their environmental impact and why people consider it a problem in the first place.

NFTs run on top of public blockchain networks. Therefore, which blockchain they run on is crucial for assessing their environmental impact.

Blockchain and the environment

The discussion around blockchain and the environment isn't exactly new, but has focused heavily on Bitcoin. What makes or breaks the environmental impact of a blockchain is ultimately its consensus algorithm and the question of how much energy a blockchain consumes. Dominating consensus algorithms are Proof-of-Work (as used in Bitcoin) and Proof-of-Stake.

Proof of work: relies on nodes racing to solve a cryptographic puzzle by running through a variety of numbers to find the right one eventually. It's heavy computational work and therefore requires vast amounts of energy. Due to its competitive nature, energy used in the system tends to increase.

Proof of stake: is a consensus algorithm that relies on nodes "staking" (locking up) native tokens of the network to be eligible to validate transactions and add new blocks. They're incentivized through staking rewards and disincentivized from behaving maliciously by slashing — which means a loss of their stake.

Proof-of-Work blockchains consume more energy to maintain their networks and, therefore, will often rely on whatever energy source is cheap to access, regardless of its environmental impact.

In contrast, Proof-of-Stake networks are a lot more energy-efficient, as the recent transition of Ethereum to Proof-of-Stake shows. Through the switch, from one day to another, Ethereum consumed 99.9% less energy.

Nevertheless, how energy consumption translates to emissions remains a hotly debated topic, primarily because of the difficulty of figuring out the exact energy sources used to power a particular chain. It's safe to say, though, that generally, lower energy consumption has a less negative impact.

NFTs require various transactions to be created, bought, sold, and used and therefore have a carbon footprint of their own. Figuring out their culpability, on the other hand, isn’t so straightforward. It can be likened to calculating your share of emissions from a commercial flight. When you fly, you’re partly responsible. But even if you don’t, the plane still takes off.

Similarly, blockchains continue running. That’s why choosing a sustainable blockchain is key for sustainable NFTs.

Sustainable NFTs

For NFTs to be broadly adopted with climate change as a pressing challenge of the century, they need to be sustainable. The way to achieve that is by ensuring the underlying blockchain runs energy-efficiently. The less energy a chain consumes, the lower are the emissions generated.

Proof-of-Stake networks are more energy-efficient and environmentally friendly than their PoW competitors. And a recent study of leading PoS chains, including Solana, Algorand, Cardano, Avalanche, Polkadot, and Tezos, found that among them, Polkadot had the lowest total energy consumption.

Ternoa NFTs

Ternoa is using Substrate, the framework also powering Polkadot to create a unique NFT-focused chain empowering anyone to build web3. We’re leveraging a variation of Proof-of-Stake called nominated Proof-of-Stake for efficient and fast confirmation of transactions. In nPoS nominators delegate their funds to validators, who then secure the chain and add new blocks.

Overall, this process requires little energy while maintaining the security of Ternoa while enabling anyone to contribute through nomination.

Beyond the environmental impact, truly sustainable NFTs will have to address challenges such as a lack of enforcement of royalties as observed on other chains and the question of storing incorruptible metadata.

By implementing NFTs natively on-chain, we address all of those challenges without sacrificing interoperability or developer experience. With some JS knowledge, anyone can create their first NFT using our SDK.

NFTs for the environment

With underlying technology being optimized for energy efficiency, we imagine that NFTs can be leveraged to raise awareness for environmental issues. A few examples of how NFTs could be used to enhance sustainability efforts:

  • Track ownership of parcels of forest land to an NFT, record growth, as well as any carbon credits generated through the said parcel.
  • Carbon credits
  • Leveraging NFTs for donations and fundraising efforts. NFTs can be a great marketing tool.

If you have any ideas for how NFTs can address environmental issues rather than aggravate them, join our community, we’d love to discuss!

You can read more about Ternoa on our website and follow us for updates.



Naomi Oba
Writer for

Writer in Crypto Marketing @AstarNetwork — passionate about financial education, blockchain, books, and food.