Crypto artwork has a local weather drawback and there’s no simple resolution

When the ArtStation website announced plans to offer NFTs, short for non-fungible tokens, the last thing expected was a backlash. But within hours of being tweeted about its intentions, that’s exactly what it got.

Almost immediately, visitors to the site spoke out loudly against the move, citing concerns about the environmental impact of placing art on the blockchain. The turmoil reached such a high point that before the end of the day ArtStation decided to unplug its NFT initiative before it even started.

“Given the critical response on social media regarding NFTs, it is clear that now is not the time to have NFTs on ArtStation,” the company wrote in a blog post. “We are very sorry for all of the negative emotions this has caused. Despite our attempts to validate our approach, we clearly made a mistake and admitted mistakes. “

The people behind ArtStation aren’t the only ones who ignored the astounding carbon footprint of crypto art before trying to capitalize on the NFT gold rush.

Joanie Lemercier wished he had known about this before selling six of his easily pliable works of art as NFTs. Lemercier, a French artist turned climate activist, has tried in recent years to cut his annual emissions by 10 percent by, for example, shutting down air traffic and incorporating rainwater into his studio. His NFT launch erased the progress of that effort within minutes.

Austria-based architect Chris Precht was much luckier. Just before he decided to sell 300 copies of his artwork as NFTs – on the additional condition that he would plant enough trees to offset the emissions from this technology, his partner warned him, “You need amazons, not trees, to make NFTs balance. “She told him.

The rise of NFTs, which are essentially certificates of ownership for any virtual good, from images of a painting to tweets, has enraged the art world – and understandably so. With artists facing a pandemic-triggered downturn with no in-person exhibitions and auctions, NFTs have emerged as a much-needed salvation grace for many.

While NFTs have been around for a while, they ended up in the spotlight when one of them was bought for $ 69 million over a month ago. Since then, NFTs of memes, album covers, online articles, and more have cost millions of dollars. But NFT assets come at a high price, as artists like Lemercier and Precht found: they’re spectacularly bad for the environment.

The hot new NFT trend is heating the planet

It is estimated that the end-to-end transaction of a single NFT emits, on average, the CO2 equivalent of a two-hour flight or a month of electricity consumption by an EU resident. This is only for trading ownership for a digital asset. The numbers only get worse when you consider that the multi-edition sets are up for sale by artists. In the last month alone, over 100,000 such transactions took place on some of the leading NFT marketplaces per tracker site called NonFungible.

Lecermier’s six-time NFT drop, for example, which sold out in just 10 seconds, used more electricity than his entire studio in two years.

Joanie Lemercier

Alex de Vries, data scientist and developer at Digiconomist, a website that has been tracking the carbon footprint of cryptocurrencies for years, says, “Cryptocurrency mining is already negating all of our net profits from using electric vehicles.”

However, NFTs are only the tip of a (melting) iceberg. The reason an NFT’s carbon footprint is so large is because of how its underlying platform of choice, Ethereum, works. For example, creating a JPG image on your computer doesn’t use a lot of energy. But in order to forge his NFT – a unique, non-tradable trademark for them – his information has to be “embossed” on the Ethereum blockchain, which is not designed green at all. The person who purchases the digital asset pays to access this information.

The root of the problem: Ethereum

To successfully record an NFT’s information about marriage and add a new block to its chain, miners must use power hungry computer hardware to solve complex cryptographic puzzles. The more powerful your computer rig, the faster it can solve the puzzle. The winner will be rewarded with Ethereum coins, which at the time of writing were trading for around $ 2,500 per pop.

That might not sound like much, but these machines are no ordinary PCs. Their calculations break down large mathematical equations that can take hours or even days to complete. Not to mention it happens on thousands of machines as everyone tries to get to the finish line before everyone else.

A single Ethereum transaction therefore consumes the same amount of electricity as an average US household over 2.56 days. The start-to-finish NFT process often involves several such transactions. According to Digiconomist, the electricity consumption of Ethereum to date equals that of the entire country of New Zealand.

Ether Cryptocurrency CoinNurphoto / Getty Images

Aurora Sharrard, director of sustainability at the University of Pittsburgh, compares the virality of NFTs to fast fashion and believes it is not in line with our sustainability goals.

“NFTs and cryptocurrencies are a means for various industries and artists to bypass economic market barriers,” she added. “From an environmental point of view, they are the digital fast fashion of the day and require extreme amounts of electricity in order to produce non-intangible objects whose positive social benefits have not been proven to exceed their negative environmental impact. “

What’s worse, Ethereum’s existing system, known as Proof of Work, is set to become increasingly complex and require even more power as people continue to compete for it – to make it increasingly competitive, prevent fraud, and keep prices like new increase blocks are running out.

Most experts believe that replacing this system with a more environmentally friendly system that doesn’t use thousands of giant mining facilities to consume energy could prevent Ethereum (and other blockchain-based platforms) from killing the planet.

This alternative already exists and is referred to as proof of use. In this model, the Ethereum algorithm simply picks a miner to authenticate the new block based on the number of coins he already owns. As a result, the miners no longer have to compete with each other and emit an enormous amount of emissions to solve the puzzle.

Evidence of the stake has been in development for years, but the organization behind Ethereum has remained vague about its release and has repeatedly postponed the launch schedule.

The rise of eco-friendly blockchains

Fortunately, the proof-of-stake model isn’t just available for Ethereum, and a handful of NFT marketplaces have sprung up using proof-of-stake blockchains to offer a greener alternative to Ethereum-based services.

Although popular platforms like NBA Top Shot, where you can buy NFTs with NBA video highlights and trading cards, have had success on proof-of-stake blockchains, artists are aware of their volatility, which prevents such climate-first -Models that achieve the same popularity as Ethereum.

NBA NTF Packs - TopShotNBA top shot

Alice Bucknell, a London-based artist, believes the shy response to greener platforms is also partly due to the “general lack of awareness of Ethereum’s gigantic energy consumption,” and points out that “neither the currency nor the main ones NFT auction platforms are keen to develop these numbers transparently for the exact fear of deterring potential buyers with environmental awareness. “

Ethereum-based platforms like NiftyGateway and SuperRare have kept their carbon emissions unusually secret and refused to reveal them, forcing artists and everyone else to rely on third-party trackers. Nifty Gateway and SuperRare did not respond to requests for comments from Digital Trends.

Christina Akopova, co-founder of the Cyrpto-Art marketplace Pixeos, is nevertheless optimistic. While she agrees that “there is still a lot of education and awareness left,” NFT and the blockchain industry will ultimately turn to the green side as long as reliable alternatives exist.

Clean energy is probably not the solution

Another approach to tackling Ethereum’s carbon-intensive process is to either provide everything with clean energy or to offset the emissions later. While both of these options seem good on paper, they’re easier said than done.

Despite such a small percentage of global transactions, Ethereum is already responsible for using as much energy as many countries combined and is notorious for putting heavy loads on power plants. If left unchecked, environmentalists have good reason to predict that even clean energy will not be enough to make such cryptocurrencies sustainable.

“Using only renewable energy to produce cryptocurrencies is a good start,” Sharrard told Digital Trends, “but the sector’s overall energy intensity and demand also need to be considered and reduced.”

In his research on renewable energy and bitcoin mining, Digiconomist’s de Vries argues that the infrastructure for providing clean energy just isn’t enough to cope with the growing appetite of the cryptocurrency. He added that e-waste made from piles of obsolete mining chips “will massively outperform banking e-waste”.

However, right now it may be the best way to offset emissions. On platforms like Offsetra, people can choose the amount of carbon they have spent and invest directly in a climate-friendly project of their choice.

Offsetra co-founder Brendan McGill claims offsetting is the most pragmatic solution right now, as artists and miners can do it right away instead of putting their NFT plans on hold and waiting for Ethereum to update. Environmental initiatives, McGill adds, are also in dire need of resources and could capitalize on some of the ongoing NFT gold rush.

In the long term, however, government reform that mandates green systems and carbon offsetting may be the only option for a sustainable future for technologies like NFT. Otherwise, ruthless mining ecosystems could threaten the fate of the cryptocurrency. For example, China recently banned the world’s largest mining center in Inner Mongolia over concerns about fossil fuel consumption.

“The diversion from crypto methods that cause tremendous environmental and social damage is not good, entertaining entertainment – it’s wasteful fast-paced fashion,” Sharrard said. “We only have one planet fit for human life and we need to make sure that wasteful and harmful trends don’t destroy the only place we can call home.”

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