The fashion world is abuzz with talk of NFTs. But what exactly are they and how do they stack up when it comes to sustainability? There is great hope that this new technology will reduce fashion’s environmental impact by offering customers a new way of shopping - one that is not reliant on the constant creation of a ‘physical’ product. However, this may not be the full story. Let’s dig a little deeper to find out exactly what NFTs are and whether they can live up to expectations.
What Are NFTs?
An NFT (non-fungible token) in the most simple terms is a digital asset that is stored on the blockchain and can be traded and sold using cryptocurrency.
The important thing to remember is that a piece of ‘digital’ clothing is in itself not an NFT. The item needs to go through a computing process called ‘mining’ during which it is assigned a value and is embedded into a blockchain network. This ‘mining’ process stamps the digital item with details such as the time and date of creation, the designer or creator, and the number in circulation on the blockchain. While other pieces of digital fashion (that are exactly the same) may exist, only one has been ‘mined’ as an NFT and is therefore authentic. Therefore the value of NFTs lies in their 'authenticity'.
Potential social and environmental benefits of NFTs in fashion
NFTs have the potential to disrupt the fashion industry bringing about changes in they way fashion is produced, consumed and sold. There are a number of social and environmental benefits that may come out of this including:
Environmental impact of NFTs
This all sounds great, however, there is a huge hidden environmental cost to NFTs…energy consumption. This is because the blockchain computing processes required to ‘mine’ an NFT and verify cryptocurrency are incredibly energy intensive. This energy is largely derived from non-renewable resources such as fossil fuels which of course produces carbon emissions. Calculations have shown that one transaction of the cryptocurrency bitcoin (which is one form of cryptocurrency used to buy NFTs) equals the power consumption of a U.S. household over 71 days. And this is just bitcoin, there are several other cryptocurrencies that are used to buy and sell NFTs! The good news is that not all blockchain processes are so energy intensive. We won’t go into all the confusing details in this post but this is a great article on less energy intensive forms of blockchain technology if you are interested in learning more.
Sustainable NFT options for brands to keep in mind
If you're wanting to dabble in NFTs but concerned about their environment impact, here are a few things you can consider:
NFTs are the shiny new thing in fashion at the moment and there is great hope that they may help relieve fashion of its burden of overproduction and waste. However, virtual fashion still has an environmental impact we cannot see as easily. As a brand, it is your responsibility to approach NFTs with same due diligence as you would with any new product in your physical supply chain. If you do your research, work within the realms of your sustainability goals and communicate honestly with you customers you are on the right track to embracing this new technology responsibly.
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