The “crypto-” carbon crisis is evolving. And after years of low-key use, art and collectibles tied to what are known as non-fungible tokens (NFTs) have exploded into the global discourse as the Next Big Thing. Embedded with it, though, is an existential tension.
Crypto-art buying is built on the same blockchain technology currently frying the climate. As the potential bubble of crypto art inflates ever higher, so too do the risks it poses to the planet. Each transaction is another glug of carbon dioxide into the atmosphere. Without major overhauls to how tokens are created and sold, critics warn, it could ultimately help foist untold horrors on the biosphere and, by extension, humanity. Though steps are planned to mitigate the effects, if nothing is done soon enough, it could leave crypto art perpetuating the same broken system of extraction and commodity trading that it’s promising to upend.
If you’ve been even mildly online over the past month, chances are you have read about crypto art. The medium has exploded thanks to a few recent eye-popping sales. A gif of Nyan Cat sold for $US587,000 ($762,513) in mid-February. A piece by Mike Winkelmann, an artist who goes by Beeple, sold for $US6.6 ($9) million on Feb. 24, and he has another crypto art piece currently for sale at Christie’s auction house that’s expected to fetch millions as well.
Headlines have steadily devolved into mad libs as the situation gets more extreme. Kings of Leon is selling a NFT album. A clip of a Ja Morant dunk sold for $US100,000 ($129,900) (it’s already up for resale for $US240,000 ($311,760)). Grimes made $US5.8 ($8) million selling digital artworks of babies in space set to her music. Logan Paul hawked $US5 ($6) million-worth of Pokemon cards. Taco Bell has an NFT drop. Talk of the spectacle is now feeding on itself and filling up notoriously insufferable Clubhouse rooms.
“[Art is being sold] for several million dollars, I get it,” said Amy Whitaker, a New York University Steinhardt faculty member and longtime blockchain researcher. “It’s very easy to focus on the big shiny objects.”
What adds to the spectacle is what collectors are buying. The Ja Morant dunk, for example, is available for free on YouTube. The Memphis Grizzlies’ video of it has been viewed 28,460 times as of this writing (and it even comes with nearly two minutes of other highlights). I can watch the $US100,000 ($129,900) clip right there on NBA Top Shot myself just as I can look at Grimes’ piece or listen to the Kings of Leon NFT drop on Apple Music. What buyers are purchasing, then, is not the rights to a specific clip or art that can never be viewed elsewhere (for the most part). Instead, what they’re usually buying is an NFT tied to a specific media object. That can in turn be re-sold. Whitaker likened NFT-linked art to the original Mona Lisa while the clips and art posted elsewhere are like posters, coffee mugs, or other tchotchkes emblazoned with her iconic smile.
An NFT is part of a blockchain, which you can imagine as a huge digital ledger of transactions, each transaction with a unique code. After one block of information, you add another. The chain cannot be changed without adding an additional block, and the blocks are all publicly visible. In the case of cryptocurrencies like bitcoin, the block is the asset. But most crypto art runs on Ethereum, a blockchain that uses ether as a cryptocurrency. Unlike bitcoin, Ethereum is, in its own words, powering “thousands of decentralized applications” such as NFTs and smart contracts. When you buy one, the token isn’t the art. Rather, it’s the transaction on the big ol’ ledger that essentially certifies the transfer of ownership. It is “non-fungible” because it cannot be swapped with an identical or a similar token. Think of it as proof of ownership of the real thing, even if said real thing is an image sitting on a server somewhere.
But we are not debating the collectible value of non-physical, digital art objects here. We’re trying to assess the explosion of NFT interest and the potential risks and opportunities it poses, something artists have been in ongoing conversation with each other about even before NFTs exploded into the public consciousness.
“This is just a capitalist model on steroids that’s absolutely completely unregulated,” Joanie Lemercier, an artist who recently cancelled a NFT drop after calculating the carbon cost of it, said, noting the market “sort of doubles every week. This is why it’s important to slow down and think and maybe take action.”
February saw more NFT transactions than all of last year at three major marketplaces. An estimated $US342 ($444) million in trades were made. Many were on NBA Top Shot, which, to be clear, does not run on Ethereum. But the money aspect is secondary to the climate impacts of minting and trading crypto art.
The transactions on Ethereum are undergirded by computers around the world racing to solve a puzzle, a process known as proof of work. The computer that completes the task first wins and makes its owner a boatload of money depending on the price of Ethereum’s cryptocurrency, ether, while the rest end up doing work for nothing. This wasted energy takes a huge toll on the climate.
Miners tend to set up shops in places with cheap energy so they can run more processors at the lowest possible cost, maximizing their profit. Cheap generally translates to polluting. China’s Inner Mongolia, for example, is a mining hot spot due to abundant coal power. The province just banned cryptocurrency mining in part due to the carbon pollution issues tied to it. (Though there are some examples of clean mining operations, they’re fewer and further between.) Bitcoin has received the lion’s share of attention because of its huge carbon footprint tied to proof of work, but Ethereum runs on the same principle.
“They run on the exact same algorithm, meaning that they have the exact same wastefulness in them,” said Alex de Vries, the founder of Digiconomist, a platform dedicated to tracking bitcoin and Ethereum’s carbon emissions. “The only difference is that Ethereum allows for more activity on its network than bitcoin does. So you can have a smaller footprint per transaction than in bitcoin simply because the system scales a little bit more than bitcoin does. They’re both running on mining. No matter what, it’s the same process: You have machines wasting energy on useless computation.”
According to de Vries’ calculations, Ethereum’s annual energy use is roughly on par with all of Ireland’s annual energy use. And the curve has bent sharply upward since December, more than doubling over the past three months as more people invest in and use the currency and more miners get in the game to cash in.
Every aspect of an NFT produces carbon emissions, from minting the token to mining the coins used to buy it, to resales. A crypto art carbon calculator went online in December at cryptoart.wtf that allowed users to track the emissions tied with any piece of art. Its creator, artist and computer engineer Memo Akten, has updated it iteratively since then in addition to authoring widely read Medium posts that include the methodology. (Earther reached to Akten with questions about his methodology but hasn’t heard back by the time of this publication.) But the totals it shows for some pieces are staggeringly high. An average single-edition NFT uses as much energy as a typical European Union household does in a month, according to the calculator. Multi-edition NFTs are even more damaging.
“It is simply far too energy-intensive to be treated as a neutral act,” Ketan Joshi, an energy analyst, said in an email. “You get a lot of ‘who went and made you the energy police’ in response to this, but of course we actually do already have a discourse about perceived wastefulness, greed, and emissions intensity. For example, around celebrities catching private jets around the world while urging more climate action.”
Lemercier and a group of activists are conducting an audit of NiftyGateway, one of the main sites where NFTs are traded, using the methodology developed by Akten. That methodology uses a mix of data about the crypto art site contracts and the energy use of Ethereum as a whole to make its estimates of the carbon footprint of individual crypto art pieces. The results show that just 30 of the biggest artists’ drops in February released more than 2,100 tons of carbon dioxide. An open edition of a piece called “The Bitcoin Angel” has sold 4,157 editions on Nifty Gateway, resulting in roughly 468 tons of carbon pollution, which is equivalent to, as Akten’s widely used calculator describes it, using a laptop for 6,000 years.
Grimes’ high-profile drop resulted in 122 tons of carbon pollution. She committed to donating an unspecified portion of the proceeds of the sale to Carbon180, a nonprofit focused on carbon dioxide removal, an unproven but likely necessary technology to avert the worst of the climate crisis and a personal interest of her boyfriend, Elon Musk. It’s easy to feel like this is some kind of cop-out and get pissed at a few wealthy artists for destroying the planet for further profit. But not every artist is a celebrity. A number don’t have gallery representation, and NFTs give them a way to get paid for their work. And as with everything tied with the climate crisis, the issue of NFTs is a system one.
“This is obviously something important to everyone in the space including myself,” Beeple said in an email. He is perhaps the most famous crypto artist of today due to the scale of his recent earnings and the institution of Christie’s facilitating the sale of his work. “NFTs have an amazing potential to empower artists and creatives but they absolutely must be done in a sustainable way. I can assure you that moving forward that all of my drops will not just be carbon neutral but carbon NEGATIVE. I will also be buying carbon credits for my past drops to not only completely offset those but also make them carbon negative as well.”
Martin Wainstein, the executive director of Open Earth Foundation, said in an email that his organisation is helping Beeple calculate the carbon footprint of his work using a mix of data from Clean Coins, Digiconomist, and Offsetra, and will provide offsets through Creol that are from the verified carbon standard registry, which are also somehow purchasable NFTs. Offsets are projects that reduce emissions elsewhere. The Creol NFT offsets currently listed on Open Sea, a NFT marketplace, are tied to a reforestation project in Peru that is part of the United Nations’ REDD program.
Blaming artists alone and asking them to shoulder the burden is akin to yelling at people to change their light bulbs or recycle better. These solutions put the onus on individuals to solve a problem they cannot solve on their own. Popular platforms have essentially locked in artists, similar to how major social networks capture users, and have a much bigger say in how to address the carbon pollution they’re responsible for.
Some of the platforms selling NFTs, meanwhile, blame the entire Ethereum ecosystem and are using artists as a shield. Super Rare, one of the most popular NFT sites, published a post on Medium last week under the headline, “No, CryptoArtists Aren’t Harming the Planet,” as if people are only mad at the participating artists. In the post, Super Rare said it would use carbon offsets as a commitment “to reducing the impact of Ethereum’s carbon emissions,” but didn’t make clear how much of its footprint would be offset or how the team would calculate it. The site also said it would donate money to upgrading Ethereum’s ETH 2.0 work, which would completely overhaul how the currency is mined so it’s more sustainable — though again, it didn’t specify how much money it would donate. (Super Rare did not respond to our request for comment.)
Carbon offsets may help assuage some of the concerns around NFT emissions, but they’re not a panacea by any means and have been shown to be highly problematic in many regards. Among the issues are a failure to sequester carbon in the long-term and the fact that forest projects, a common type of offset, often displace Indigenous groups who reside there. It’s also a market-based solution to the problem of climate change that’s been baked in by a free market that has prioritised rapacious growth above all else. At most, offsets can arrest some of the climate damage of crypto art and other emitting industries, but they don’t come anywhere close to addressing the problem of carbon emissions worldwide.
“It’s basically millionaires burning oil for getting millions in rewards,” Lemercier said of the recent big crypto art drops. “This is the last thing we need right now. We need other solutions. And the solutions are here, and they could be deployed at any moment if the CEOs had that in their priority list.
“Any of those platforms today could make a statement that they will implement Harmony as a bridge to those site chains,” he added, referring to a system that uses proof of stake “bridge” to Ethereum that could help lower emissions tied to NFTs. “But they’re just too busy with the money they’re making on a daily basis.”
That one of the biggest crypto art companies doing something about its emissions is choosing offsets instead shows their priorities. It also reveals one of thee conundrums of how the crypto art market is relying in part on the very systems it claims its a bulwark against. What’s supposed to be a democratized, decentralized system that can allow artists more control over their financial fate is instead reliant on continuing extractive relationships by using mining systems that offload pollution into the atmosphere and offsets to cover it. That offloads the costs of the market onto society. Whitaker said the “externalities placed on the environment” are one of the biggest costs of crypto art, but that it ties into other issues with how the market has exploded.
“I think the environmental question is incredibly important and needs to be quantified and needs to be planned for going into the future,” she said. “The solutions may be more holistic than just putting a cast on a broken arm of environmental problems.”
“The goal for allowing global creative participation in crypto and reducing climate impact are one and the same from my perspective,” Ameer Carter, an artist who goes by Sirsu and is working in the space to both sell art and ensure the space is more climate-friendly and inclusive, said in an email. “If this space is largely dominated by a few groups globally, then it will only be those communities shaping our collective future within crypto. Through the inclusion of more cultural communities, their approach to creative work and sustainability will positively impact how we build digital ecosystems moving forward. We can’t expect to think that we are the only participants that have ideas for this space.”
Getting a more diverse set of people involved in addressing these issues could also ensure the marketplaces themselves are more egalitarian, putting Black or queer artists who are traditionally underrepresented in the gallery art world at the forefront of shaping the online one. In comments to TechCrunch, Carter noted how erasure is already happening in the NFT boom. Addressing that head-on now along with the climate concerns could start to heal the growing divide.
ETH 2.0 is in some ways the holy grail of Ethereum because it relies on what’s known as proof of stake mining, instead of the current proof of work. It’s been in the works since 2014 and would change the proof of work approach where every computer is racing to solve one problem to one where it’s essentially a lottery where one computer is randomly selected to solve the riddle. That cuts out an estimated 99% of the energy used and massively reduces waste. The group developing it is aiming for rolling out the proof of stake algorithm by 2022. It sounds great in theory and would alleviate much of Ethereum’s carbon problem overnight, but there’s a slight issue.
“They’ve been saying we’re going to proof of stake since 2014, and they’ve been saying since 2014 it’s going to take six months,” de Vries said. “So for me, I’ve become a bit sceptical that this is going to happen on the timeline they say it will because they haven’t been able to achieve their deadlines for the past few years.”
Proof of stake would also require miners to be invested in the system and gives miners who have more coins already a better shot at getting rewarded. So while it would alleviate some of the climate costs of mining Ethereum, it could end up making the system more unequal while a select few continue to make massive gains.
“For me, proof of stake replicates some of the forms of exclusion that are closely tied to income inequality and unstable societal structures,” Whitaker said. Referring to rules governing investing in non-public companies put together by the Securities and Exchange Commission following the Great Depression, she said, “they use the wealth as a proxy for sophistication. So to invest in private companies, you have to be an accredited investor or a qualified person. What that does is it concentrates wealth because you have to be wealthy to invest in companies that may be high risk, and you may lose money. But these are the companies that become the next Facebook, Google, Airbnb, Coinbase, or whatever it is. So to me, proof of stake has the exact same structure where it requires you to have money in order to make money, and that’s problematic.”
She suggested that proof of stake mining could become more egalitarian if there were ways to collectively own stakes in mining or if those with resources could put up the stake for proof of stake mining and then redistribute the proceeds to the community. Other experts noted that transparency could further help address the issue of emissions, drawing on best practices from cloud computing.
“If there were to be a way forward with this, surely it would be creating a system where the mining process can be somehow tracked back to a company that makes its energy consumption open e.g. I can choose to store my docs with either Google or Apple,” Joshi said. “I know they both purchase 100% renewable power purchasing agreements, but I also know Google does the extra legwork of matching server usage to renewable output, so it’s actually lower emissions.”
Whatever approach, NFTs are also in dire need of effort to ensure they benefit both artists and the planet, including the poorest among who suffer the most from the climate crisis. It’s a cruel twist that people with the least ability to either sell their art as NFTs or purchase work are those who will suffer the most from the impacts of the market the longer it runs on polluting energy.
Some artists are not waiting for platforms to address the issue or for ETH 2.0 to become a reality. A Green NFT bounty has been put up for both decarbonizing the process and raising awareness. It was started by Artnome founder Jason Bailey and has received donations totaling more than $US16,000 ($20,784).
“There are multiple ways to approach this issue and it takes more than just the conversion of NFTs to build a better future,” said Carter, who is involved with the Green NFT effort as well as creating a crypto studio known as the Well. “In the interim, the purpose of the Green NFT bounty is to find all of the current solutions, build on top of them, and show to the broader art communities outside of the space that we are not a community that is apathetic to how we treat the world we inhabit.”
Others, including Lemercier, are organising an eco-friendly NFT Discord server. And though Lemercier didn’t share details, he said he expected some major artists could soon be leaving the polluting NFT platforms for others that run on clean energy or proof of stake mining. Members of the Discord have also compiled a useful list of developers working on cleaner NFTs while others have created a detailed breakdown of how the most popular NFT sites work.
“While obviously these concerns are not just NFT-specific and relate to the entire blockchain, having been in the digital art space for many, many years I honestly believe we will be a leader in aggressively tackling this problem in a much more sustainable way than we’ve seen from the broader blockchain community,” Beeple said. They have their work cut out for them.
There’s an undeniable allure to how crypto art blends the relatively new and old together: the blockchain and collectibles, digital and gallery art, and the promised land of a more egalitarian art market that gives artists a stake in their work in the resale market. Though there are barriers to entry, it points to a future that could make right on past wrongs. The prospect of something potentially new and better is tantalising.
That alone isn’t enough, though. It could leave artists who aren’t big names on the outside looking in. Much like the Green New Deal, whatever comes next for crypto art will have to address the climate issues and social issues that come hand-in-hand with art. Failing to do so could otherwise leave rich artists and their wealthy benefactors trading the same few pieces over and over from the comfort of their hermetically sealed homes while the rest of the world burns.