The Dark Side of the Digital Art Market: The Ecological Consequences of NFTs
Increasingly, the NFT form of crypto art is being held responsible for millions of tons of planet-heating carbon dioxide emissions generated by the cryptocurrencies. Artsper investigates this so-called dark side of the digital art market by investigating the ecological consequences of NFTs.
The humble NFT
The NFT has been in the news lately and not always for the right reasons. Non-fungible tokens allow you to buy and sell ownership of unique digital items. These can take the form of drawings, animated GIFs, songs or video game items. Owners can keep track of the propagation of the NFT via a blockchain. Making headlines lately are some high-profile memes like Nyan Cat and the Deal with it sunglasses. These NFTs are selling for millions of dollars at auction.
Whilst the eye-watering figures NFTs fetch, continue to sore, the ecological disaster left in the wake of the storm of the digital art market specializing in NFTs, has began to be reported in the media. In this article, Artsper calls into question the digital art medium’s nature as an ecological nightmare pyramid scheme.
The light side to the NFT—new possibilities for artistic creation
Before focusing on the doom and gloom, we must first reiterate the popularity of the NFT. What exactly are people so drawn to about this medium? Although a relatively new kid on the block, the NFT has already shaken up the art world. Its appeal appears to rest on its rebellious and insurrectionary nature in regards to a traditional art market. Furthermore, its ephemeral nature as something intangible is perhaps another pointer towards explaining its popularity.
Today, with Christie’s and Sotheby’s onboard, the digital art world continues to gain legitimacy and visibility. It is a sure fact that the opportunities for artists have multiplied in terms of exposure. Whether it’s the resale right granted to artists, or through exhibitions in virtual universes, artists benefit a lot from this new tool. In other words, artists have the means to make a decent living through digital art! This is somewhat of a change of narrative for the long-struggling artist in terms of financial recompense!
Like any new revolutionary movement in art history, the NFT has been approached by traditionalists with much hesitancy and skepticism. However, climate activists believe the criticism NFTs face is justified.
An ecological disaster
Some may say that the fun is up for this unique cryptocurrency token, whose ecological footprint has begun to be analyzed at length. In the last year, some initial estimates of NFT’s energy consumption have come to light. It’s not good news.
Take Space Cat, an NFT GIF of a cat in a rocket heading to the Moon, as an example. According to the website cryptoart.wtf, Space Cat’s carbon footprint equates to an EU resident’s two-month electricity usage. The founder of this website, Memo Akten, is himself a digital artist. In the process of his research, Akten analyzed 18,000 NFTs and found that the average NFT has a carbon footprint somewhat lower than Space Cat’s. However, he found the average NFT had a footprint equivalent to more than a month’s worth of electricity of an EU resident.
Interestingly, this feature of NFT carbon footprint estimation on Akten’s website is no longer available. The outrage caused by the estimated greenhouse gas emissions associated with individual NFTs, led Akten to take it down at his own discretion.
In December 2021, NFT artist Pak broke history records. His $91.8m artwork acheived the highest sum for which an NFT has ever been sold. For that price, the buyer received a digital file as well as an extensive legacy of greenhouse gas emissions.
The cost— In Ethereum lies the problem…
The ecological problem of the NFT lies in its consumption and not in its production. NFTs currently run through a security system of cryptocurrencies like Ethereum and bitcoin in order to protect the transaction. The system works through a series of complex puzzles, like a treasure hunt that make it increasingly difficult to hack into financial records. These difficult puzzles are created by energy-guzzling machines.
The process is incredibly inefficient on purpose. The idea is that by using up copious amounts of electricity, ironically named as units of “gas”, one must pay a lot to participate. This acts as a selective barrier allowing only serious players into the market. Consequently, Ethereum uses about as much electricity as the entire country of Libya!
In the current state of the digital market, NFTs are largely bought and sold in marketplaces like Nifty Gateway and SuperRare. These marketplaces that exclusively use the cryptocurrency Ethereum. You can begin to see the problem with NFT’s affilliation with Ethereum. And the problem doesn’t stop there!
“Many NFT transactions send a stronger economic signal to the miners which may lead to increased emissions,” said Susanne Köhler, researcher of sustainable blockchain technologies at Denmark’s Aalborg University. If NFTs lead to a significant hike in the value of Ethereum, miners might try to cash in by upping how many machines they use. (As you may know, a person who acts on a crypto currency is called a miner). More machines generally mean more pollution. Even if the new machines are better at puzzle solving, meaning they use less energy, the proof-of-work puzzles are designed to become progressively more difficult. Any progress will be rendered redundant by a system designed to keep things inefficient.
Time to rethink the model
The climate controversy swirling around NFTs is growing. There is a case for more sustainable crypto art. The polluting nature of NFTs has led some artists— including those who have already benefited from the craze — to rethink the sales model. An easy solution? Critics consider it a pipe dream. Since the NFT art form is a rather recent phenomena, there is little data for unbiased experts to analyze in order to unearth resolute solutions.
Can we really have leaner, greener, cleaner NFTs?
Environmentalists are putting pressure on the market to change. A recent example of this can be found in the case of ArtStation, an online marketplace for digital artists. ArtStation cancelled its plans to launch a platform for NFTs within hours after receiving backlash. People wishing to disassociate themselves from crypto art, sharing a belief in its environmental immorality, are increasing in number.
Furthermore, Mike Winkelmann, considered by many as the godfather of the NFT, a.k.a Beeple, has come forward with a personal proposition. He has vowed that his future artwork will be carbon “neutral” or “negative.” He plans on offsetting emissions from his NFTs by investing in renewable energy and conservation projects. It costs an estimated $5,000 to offset the emissions from one of his collections. For now, there are still greenhouse gas emissions associated with his NFTs despite his attempt to even out the score.
While people try to hash out the kinks in all of these proposed solutions, the climate crisis grows more and more dire by the day. Against the very real backdrop of climate-related disasters, there are some people who refuse to participate in the NFT market at all. Ultimately, artists are the ones pushing the most for change. If NFT marketplaces don’t start to meet their demands, artists could start minting their NFTs on marketplaces using cleaner cryptocurrencies. There’s already an artist-led effort to raise money to reward people who can figure out new ways to make crypto art more sustainable. For now the waiting game continues.
Founded in 2013, Artsper is an online marketplace for contemporary art. Partnering with 1,800 professional art galleries around the world, it makes discovering and acquiring art accessible to all.Learn more