The controversies around NFTs
We at Chaingreen are advocates for nature, and that is why the topic of NFTs and their impact on the climate is so important to us. NFTs consume a significant amount of energy, which contributes to the overall carbon footprint of cryptocurrencies, particularly Ethereum. However, there is far more to it than what the media portrays.
NFTs are, in most cases, Ethereum tokens that form part of the Ethereum network. Platforms that provide NFTs typically require buyers to use Ethereum to accomplish their transactions. According to reviews, the digital token is already consuming roughly the same amount of energy as the entire country of Hungary.
Increased demand and increased NFT transactions indicate higher profitability potential for miners, leading to increased emissions. The basic premise is that NFTs could significantly boost the price of Ethereum, motivating more intense and energy-intensive profit mining and, as a result, expanding the number of miners employed. And, as a general rule, more machinery equals more pollution. On the other hand, NFTs are partially to blame for the millions of tonnes of CO2 emissions created by the crypto assets used to acquire and trade them. Some artists, including those who benefit from the mania, truly think it is a simple issue.
The climate solution
Because of its decentralized nature, one of the best features of the crypto industry is that it is constantly innovating and evolving. As a result, the industry is developing solutions to mitigate environmental damage.
Already renewable energy sources are fueling blockchains due to China's ban on coal-burning server farms and the rise of green alternatives.
The second and more pressing option is to switch from Proof-of-Work (PoW) to Proof-of-Stake (PoS) (PoS). Because the ledger is secured by users "staking" their cryptocurrency tokens, this mechanism, which Ethereum is striving to embrace, consumes significantly less power.
Artists and ecologically aware collectors are adding pressure on platforms to commit to lower-carbon standards as the NFT market grows.
The rising popularity of the NFTs, whose authenticity and proof of ownership are presumably protected by their creation on the blockchain, has been accompanied by an increase in reports of so-called "NFT theft" — creators having their art plagiarized, minted as an NFT, and even sold to buyers who assume they are getting the real deal.
Many platforms have documented incidents, but Opensеа, the largest market for NFT, has been at the root of recent controversy, with high-ranking artists such as RJ Palmer and Loish turning to social media to condemn the thefts.
Scammers stole many artists' digital art from DeviantArt, a top digital art community with over 80 million users worldwide and half a billion digital pieces.
With all of that capital pouring into the space due to NFT mania, it's no surprise there are plenty of scam artists, fraudsters, and charlatans waiting in the shadows. Although no hacker can rip you off by making a copy and declaring it to be their own (considering the nature of NFTs), there are still plenty of opportunities for theft and scams, which can be disconcerting to newcomers. On this same note, here are a few precautions you could take to reduce your risk and defend your assets.
1. Non-custodial wallet
Generally, it would be best if you kept your NFTs in a non-custodial blockchain wallet rather than an exchange or marketplace. Non-custodial wallets (also identified as hot storage) are protected by a seed phrase of 12-24 words and a mixture of touch identifiers and passwords. It's a very safe way to protect your assets for the vast majority of people and scenarios. They are, however, hackable via a variety of methods, including keylogging, malware, and phishing scams.
Here are some pointers on how to reduce your chances of being hacked:
Never share your word seed phrase.
Your password should be a bizarre mix of upper and lowercase letters, numbers, and symbols.
Don't save your login information or seed phrase anywhere.
2. Cold wallet
Cold storage is the most reliable way to keep your NFTs. Cold storage is an external drive kept offline to keep your assets safe from hackers and phishing scams. Because your digital goods are stored on these devices, no one on the internet can contact your NFT until they have access to both your physical cold storage device and your passwords. Consider it a digital safe for your NFTs.
If you want to buy a cold storage wallet, a few highly rated wallets are available. Just remember that using a cold storage wallet indicates less convenience in exchange for security. So every time you want to buy and sell with the blockchain, you will need to attach and decrypt your cold wallet, which could be time-consuming.
For more information on the NFTs and Metaverse, please check out our NFTs Introduction and Play-to-earn games and the role of NFTs articles to ensure you cover all your bases.