Are NFTs so devastating for the planet that closing shop and abandoning the cryptographic revolution is something we should've done already?
The answer is not straightforward.
As of today, a single NFT art exchange has yet to succumb to accusations of how NFT crypto art is destroying the environment.
SuperRare, a popular NFT market, claims NFT exchanges have no role in the vast energy expenditure and that CO2 emissions wouldn’t change even if we shut down all NFT projects.
The University of Cambridge, one of Britain’s historically best research authorities, supports SuperRare’s argument. The UoC has published a separate website addressing common cryptocurrency myths and stating that environmental concerns are vastly exaggerated.
Activists have a different story, claiming that something more sinister is at play here.
One NFT transaction leaves a carbon footprint equal to an hour-long flight. Imagine adding more transactions to the mix. Trading 100 pieces would produce 10 tonnes of CO2, dwarfing the yearly energy expenditure of a single European household. This argument puts NFTs in the same box as the world’s worst polluters, including fossil fuels and the meat industry.
Grimes — a musician, artist, and wife to the richest man on the planet — sold over 700 NFT copies in 48 hours, singlehandedly disrupting the climate beyond repair, according to climate activists.
Memo Akten analyses the carbon footprint of NFT markets in a long-form blog piece on Medium. His story is worth reading, even if you disagree with the premise. Many others share his concerns. New York Times also seems to be on a crusade of exposing the real danger of crypto markets.
What does all of this mean for everyday NFT artists? And are you a bad person for trying to make ends meet with money earned on the blockchain? These are tough questions. Let’s dig deeper.
Two reasons potentially fuel the debate
- Activists are running on emotions, misrepresenting climate readings, and failing to see the big picture.
- Auction houses and top universities are biased and oblivious to the real costs of decentralized markets.
We’re exploring both arguments in this story, hopefully contributing to the overall debate. But before we jump into both arguments, we have to mention two leading Ethereum protocols Proof-of-work and Proof-of-stake.
The proof-of-work vs. proof-of-stake debate
A Non-Fungible Token (NFT) is an ERC-721 token that defines each token as being unique from other tokens on the blockchain.
NFT markets are mostly run on Ethereum’s grid. To prove ownership, you must control the private key that’s associated with the token in question.
Blockchain lets users create low-maintenance apps that don’t need much monitoring once published. These apps are decentralized and self-sufficient in theory. One app can travel and interact between websites, enhancing user experience and boosting workflow.
Imagine Google chrome plugins that work on multiple websites. Good Annotations is a good example of a centralized app that looks almost like a decentralized one. The app lets you capture and annotate any website from your browser. You can then easily share your remarks, audit website elements, and collaborate with colleagues.
NFT markets are mostly run on Ethereum, the second-largest blockchain in the world.
Ether powers the network. Think of it as a currency that helps things move around and information delivered to its rightful place. Miners currently produce and validate Ether through proof-of-work, a protocol that manages mining operations and generates consensus at scale.
This is where everything gets interesting.
Proof-of-work helps Ethereum’s decentralized network reach a consensus. The network users can communicate account balances and transaction orders, effectively preventing double-surcharges and loss of information. Similarly, Internet has TCP/IP and several other protocols that make the cloud go round.
However, proof-of-work has an immense downside. The network evenly distributes information across the nodes, which favors stronger computers. Miners have to buy better equipment and use more energy to compete amongst each other.
Weaker miners organize into groups. And groups form mining pools to compete with other mining pools. Demand for high-end electronics spirals out of control, driving energy consumption and tech shortages.
Gamers literally couldn’t buy new graphic cards because miners buy off entire market supplies. When AMD launched Radeon RX 6700 XT in March 2021, miners crashed the website and bought all the graphic cards within an hour. Here’s where the problem lies.
High-end tech consumes more energy than your regular air conditioner and a washing machine. Electricity bills for mining are mindbogglingly high, forcing miners to relocate to Siberia, Mongolia, and in some cases, re-negotiate energy prices with the American government.
On the other side, we have the proof-of-stake (PoS).
Blockchain can effectively run on less energy. Units can stake Ether to validate transactions and forge blocks, giving wealthy participants more power over the network.
The system seems grotesque at first. It favors the rich, after all. However, validators leverage their stake against fraudulent activity and lose part of leveraged Ether if they try to bamboozle with the system. If any stakeholder misrepresents your transaction, they’re pledging to lose money.
Proof-of-stake lets miners solve computational problems on little to no energy, as they don’t need to compete with energy-intensive computers anymore. Money talks now. The system would kickstart a new age in the crypto world, creating Ethereum 2.0. Blockchain then becomes more effective, faster, and flexible. And PoS primes Ethereum for a major expansion and possible entry to the mainstream.
This all sounds good, but here’s the catch. Crypto-critics have heard this argument too many times before. Ethereum Foundation has been promising Eth2 for years now, with the latest failed attempt to launch the network in January 2021.
Ethereum needs 16,384 validators willing to stake a minimum of 32ETH to launch the PoS network. Each validator has to pledge roughly $81,436 to join the grid. The total stake comes down to about $1.3 billion at the current price.
Compared to other financial institutions and banks, these numbers are not scary. Ethereum has already moved part of its grid to PoS, and that’s positive news. Vitalik Buterin, Ethereum’s founding father, now predicts the network would fully move to PoS by December 1st, 2021.
The environmental arguments can be put to rest if the largest blockchains implement PoS systems. NFT transactions could virtually spend less energy than the old lightbulbs in this case.
We’re not there yet, though. Let’s try to see how badly does crypto is affecting the planet at current rates. Are NFT crypto artists truly boiling the oceans?
NFT crypto art is wrecking our efforts in fighting climate change
Memo Akten spearheads the argument against NFT crypto art. He’s a London-based creative technologist and an established artist with more than one polarizing opinion.
His 22-min viral Medium article goes against all things NFT. The story has dominated the trending category on Medium in early March, almost 3 months after being originally published.
The story is still making rounds, judging from the number of YouTubers, TikTokers, universities, and crypto exchanges sharing his ideas. Memo has been openly documenting his finding on several platforms, including FlashArt, Cornell University’s arXiv, and other, both peer-reviewed and more speculative journals.
“This lack of transparency is unacceptable” — Memo Atken
His story intentionally presents a one-sided argument. Memo actively fires back at NFT crypto art in its current form and calls for change.
“I’d like to make it very clear that what follows is not a general “all-sides-of-the-story” article, but focuses only on the CryptoArt/NFT Market from one perspective, which I believe has to be — but yet has not been — included as part of the conversation.” — Memo Akten
What is the argument all about?
Non-fungible tokens are energy hogs, according to Memo. Minting NFTs consumes a lot of electricity, and the heat from the mining rigs melts the glaciers and destroys energy grids.
Bitcoin runs on an energy-intensive network, and it’s responsible for 0,45% of total energy consumption in 2020. Bitcoin is the original and the largest blockchain system on the planet. The network can’t process or store data-intensive artwork, and all those efforts have been focused on the Ethereum network.
Artists can mint personalized ERC coins or even create whole blockchain systems that support NFTs. Personalized networks could potentially consume less energy if build well. However, building a new blockchain network would be a monumental task that’s unlikely to be sustainable for an individual. Even if you successfully organize your private blockchain, you probably wouldn’t have time for much else. The artwork would suffer.
What’s left then? Ethereum.
Ethereum’s ability to execute custom code and build smart contracts has been fueling the non-fungible world. Smart contracts allow artists to earn royalties on their NFT crypto art time over time and without worrying about the legal aspects of trademarks, copyright infringements, and other business aspects. You can deploy your NFT with a smart contract and make a cut of every future transaction.
However, a single Ethereum transaction is responsible for 61.7 kWh of electrical energy, or 2 days of regular power consumption for an American household.
Ethereum’s annual consumption for 2020 is pegged at 28.29 TWh, which compares to Libya’s power consumption, or equivalent to the environmental footprint of the Ivory Coast.
One NFT transaction is not the same as one ETH transaction, according to Memo. You have to Mint the NFT, transport the token, exchange it for money, and then receive royalties every time it’s resold to a new owner.
Memo estimates that an average artist is responsible for 9,553 KhW, or 5,926Kg of CO2 emissions. The median numbers are lower, though. They amount to 3,143 Kwh or 1,950 KgCO2e. Most of the NFT market is not active and never sells a single copy, making it almost impossible to calculate the real energy expenditure.
Finally, the environmental cost of running NFTs on SuperRare (a popular NFT marketplace) is 6 GWh, which amounts to 37 thousand hours of flying, or 54 thousand years of using a laptop, according to Memo. This all sounds grim.
The real consensus is yet to be reached, as the majority opposes Memo’s sentiment. Memo is not a fool. He has put the time end energy into getting to the bottom of this argument. At least, he contributes to creating a truly sustainable crypto world. However, we disagree with his sentiment.
Here’s what we have found in our research.
NFT crypto art consumes less energy than literally everything else — including YouTube
Memo’s conclusions are scary, and nobody wants to contribute to the environmental catastrophe massively. However, his calculations are ambivalent at best. Here are a few clear facts that will put your mind to ease. You can easily verify everything in the list below with a simple Google search.
Crypto art is not killing polar bears, but almost everything else does:
- The entire crypto world is responsible for 0,7% of total CO2 consumption in 2020, at the time when the planet completely stopped driving, sailing, and flying. Everyone was stuck at home in front of their computers. The percentage of crypto’s contribution to total energy consumption can only dwindle from now on as factories, roads, and airports reopen.
- Watching Youtube contributes 5x to producing carbon footprint than running the whole crypto world with all of its tokens and applications. Youtube contributes 2,5% of total greenhouse emissions.
- Streaming the song Despacito by Luis Fonsi and Daddy Yankee, featuring Justin Biber, consumed over 900 GWh in 2017. Youtube streams of Despacito emitted 150x more greenhouse gases than SuperRare, a whole marketplace for NFT art where thousands of artists trade their work.
- Meat and dairy consumption makes for around 14.5% of total emissions, according to the UN’s Food and Agricultural Organization (FAO). Dropping meat for your diet only once a week contributes more to saving the planet than shutting down every NFT market out there.
- NFT art costs less energy than producing physical art.
Imagine a professional painter from Lower Manhattan. He’s sitting in his wooden workshop chair, adjusting his canvas and smearing the pallet with oil paint.
He’s ready to translate his ideas to reality. The painting comes to life some 17hours later. The artist is almost satisfied with his creations, but he knows he can’t be a perfectionist now. Nobody pays for wasted time. He has to ship the artwork, so he calls an established gallery and inquires about an auction. He shares the event online and accepts a few interviews. The auction house happily sells the painting to the highest bidder, who turns out to be an art collector from London.
Our painter can’t hide his smirk. People validate his hard work in intense exchange, and he makes enough money to pay off half of his mortgage. It’s a win-win. The painting finally takes off. Local couriers accept the package, transporting it to the nearest airport and across the Atlantic to its final destination in the United Kingdom.
What’s the total cost of a classic painting, including the canvas, paint, brushes, marketing, auction, and transportation? Well, it’s still less than a few hours spent on YouTube. The painting emits significantly less CO2 than a few weeks of eating burgers and drinking alcohol. The moral of this story is that we shouldn’t point fingers at one artist or the other, digital or physical.
We should be concerned about the environment. The potential implications of NFT art should come under scrutiny. But why are we pegging these narrow art fields against each other when they wouldn’t reach 1% of total energy consumption combined under the worst circumstances?
Your artwork is not to blame for the environmental crisis. The tables may turn soon as proof-of-stake blows away this whole debate.
This is original content from NewsBreak’s Creator Program. Join today to publish and share your own content.