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Are NFTs Bad for the Environment?

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Written by Timothy Sykes
Updated 3/29/2022 8 min read

You’ve probably heard the big news…

I’m about to release a limited amount of my first NFT collection FREE of charge.

Join me on March 30 at  8:00 pm ET as I interview Adam Jarrett, my student who’s made seven figures from NFTs…

Click here for Adam’s three-step system and news that will change the future of NFTs.

My email and DMs are blowing up.

One question keeps coming up…

“Tim, are NFTs bad for the environment?”

It’s no surprise given my background with Karmagawa

After all, we produced “50 Minutes to Save the World.”  In less than three years, the documentary has over 15 million views.

So some people were confused when I announced my NFT project. I’m glad people are asking about NFTs and the environment.

Why?

Because it’s a subject very near and dear to my heart…

The Dark Side of Digital Art

Like crypto, NFTs are traded using blockchain technology. I used to rip on both crypto and NFTs all the time.

One thing I’ve never liked about crypto is all the scammers. Not to mention it brought so many criminals together under one currency. But another reason was its environmental impact.

Early cryptos like bitcoin and ethereum use on-purpose inefficiency for security. The problem is, it uses a ton of energy…

Crypto Relies on Fossil Fuels

And that doesn’t sit well with me.

By some estimates, bitcoin uses as much energy as a European country.

Ethereum isn’t much better. The on-purpose inefficiency is creating a huge carbon footprint.

To be fair, ethereum claims its energy usage will drop 99.5% when it shifts to a new blueprint. Sadly, they’ve been saying it for years. 

As a matter of fact, it’s so bad that the World Wide Fund for Nature (formerly the World Wildlife Fund) halted the sale of its NFT collection. In the balance, it didn’t make sense to them as protectors of the environment.

The thing is…

Some Blockchains Are NOT Energy Intensive

Tim Sykes reviews his top penny stocks list for February 28, 2022
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This is important, so pay attention. There are two kinds of blockchain…

Proof of Work

In a proof-of-work (PoW) blockchain, members use computing power to solve an arbitrary puzzle. PoW benefits from security — it’s more difficult to game the system.

It also uses increasing amounts of energy. Why? Because users are competing against each other to solve the puzzle. There could be hundreds of computers working on one puzzle but only one solves it. All the energy used by the other computers is wasted.

Proof of Stake

In a proof-of-stake (PoS) blockchain, transaction validators have to own a certain number of tokens. In other words, you have to have skin in the game to be a validator. The validator for any given transaction is chosen at random from all those with proof of stake.

Some hardcore De-Fi nerds consider it less secure, but the reduction in energy is huge.

So the answer to the question is a little complicated…

Creating the NFT Is Not Energy Intensive

top penny stocks list September 07, 2021 trading mentor Q&A Tim Sykes infinity pool Dubai 2021 trip
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At least not in the same way as mining or validating the transaction.

French artist Joanie Lemercier even looked into using NFTs as a way to reduce his carbon footprint. Here’s what he found

Source: WIRED

NFTs are hot, but so is their effect on the Earth’s climate. What looks like a lower environmental impact is a disaster waiting to happen.

So, he famously canceled his second NFT drop and became an activist for only using low-energy PoS platforms.

Related aside…

Even on a PoW blockchain, only high-value/highly-traded NFTs use a lot of energy. Makes sense, right? If nobody wants it, there’s no transaction. That means no work (energy spent) solving the transaction puzzle.

So, now you know that PoS blockchains make more sense. The next question is … “Tim, which blockchain do you like?”

The Case for Solana

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Like I said, I’ve done hours and hours of research to prepare for this project. Again and again, one blockchain solution kept coming up.

It’s not the only PoS blockchain but it’s super-fast, very low cost, and…

Solana Is Carbon Neutral

Solana Foundation announces blockchain is carbon neutral, thanks to carbon offsets
Source: SOLANA

Solana achieved carbon neutrality in 2021. How?

To start, it’s one of the most energy-efficient blockchains. A single Solana transaction uses 1,939 Joules. That’s about as much energy as doing two Google searches.

Compare that to Bitcoin which uses 7,412,400,000 Joules per transaction. Exactly how much energy is that?

Check this out…

Source: The Times

According to data from the Cambridge Bitcoin Electricity Consumption Index, one year of bitcoin mining could boil enough water for Brits to drink 30 years’ worth of tea!

What about Ethereum? It’s lower than Bitcoin but still uses 777,600,000 Joules.

Solana is more efficient than either bitcoin or ethereum — by a longshot. But energy efficiency doesn’t mean carbon neutral. So what is Solana doing to offset its small carbon footprint?

The Solana Foundation is funding refrigerant destruction. That means permanent destruction of CFC and HFC refrigerants. Those two greenhouse gasses are 10,000 times as potent as CO2.

So for me, Solana is the way to go.

Are NFTs bad for the environment? It depends on the blockchain.

Rest assured…

When you join me for the NFT Trading Summit on Wednesday, March 30 at 8:00 pm ET

I’ll show you how to learn all you need to know about the coming NFT explosion.

At the same time, I’m doing everything possible to be a good steward of the environment.

Now you have two choices… 

You could walk away and miss the big event. If you do that, you’ll be missing the opportunity to get in on what could be one of the biggest market rushes of all time.

Or…

You can learn about Adam’s rollercoaster trading journey

… from penny stocks to crypto and NFTs.

More importantly…

Adam is going to share his breakthrough three-step system he uses to make millions in NFTs and…

… the catalyst that will change the future of NFTs.

This market is growing at warp speed.

Click below to register for the big event on Wednesday, March 30 at 8:00 pm ET…

NFT Trading Summit — How a 25-Year-Old Trader Made Over $1 Million In 10 Hours From NFTs

What do you think of Solana and its low environmental impact? Comment below, I love to hear from all my readers!



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HenryJun. 18, 2022 at 11:16 am

Knowledge supports growth.



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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (205) 851-0506 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”