why nfts are bad for the environment? The climate controversy

 The crypto art and NFT boom produces millions of tons of Co2 for just a few clicks

The energy consumption and environmental impact of a market that should be digital only upsets artists on social media.

Some artists have turned into activists to testify that the cryptoart market is toxic to the environment.

Many platforms, such as Foundation or Nifty Gateway , allow anyone to auction their works only in digital format. Earnings are high, in the order of thousands of dollars, when not, for the more established names, millions.

NFTs are traded : non-fungible tokens. They can be described as signed copies of digital works of art: therefore pixels, on which the buyer does not acquire any copyright, but only the awareness of owning an original and unique file.

The uniqueness depends on the fact that of each NFT only a minimum number of copies can be issued: sometimes no more than one. To ensure that they are 'authentic', they go through the same procedures with which cryptocurrencies, such as Bitcoin, are born and verified.

The mechanisms of the latter are known to be very energy-intensive. The processes depend on the computing capabilities of thousands of computers, turned on to solve complex mathematical problems, much more expensive than standard server tasks. We talk about blockchain, mining and proof of work. The energy consumed still derives predominantly from fossil sources.

A single transaction in Ethereum, a 6-year-old cryptocurrency widely used in the cryptoart market, produces an estimated 27.7 kg of Co2 - the equivalent of an American home's electricity consumption over two days.

When it comes to digital works, it gets worse. The process of validating an NFT is called minting. It is complex and therefore consumes more. But the data on it, so far, are very few and the platforms are very opaque when it comes to making their energy footprint public.

Memo Akten, a computational artist, engineer and researcher, tried to calculate it. Her research, published in Medium, only recently went viral, coinciding with NFT sales records that brought the phenomenon to the attention of the press, and in particular the New York Times.

Akten analysed 80,000 transactions related to 18,000 NFTs sold on the SuperRare trading site. According to his calculations, the average energy consumption per transaction on the platform is 82 kWh, equal to 48 kg of Co2.

However, since every single NFT goes through a long path, which travels for the energy-consuming authentication systems of cryptocurrencies, between purchases, changes of ownership, or its own initial certification, the consumption of Co2 rises.

On average, Akten calculated that the carbon footprint of a single NFT on SuperRare is 211 kg of Co2. The equivalent of traveling by car for a thousand kilometers or flying for two hours.

The situation does not change much for other platforms, which rely on the same procedures and mechanisms as the Ethereum cryptocurrency.

Since many artists on these sites have already produced and sold more than one NFT, it can lead to paradoxical consumption. 

According to Akten's data, on average each of them would produce 6 tons of Co2 on SuperRare over 11 months, for 9.5 kWh: the electricity consumption of an EU citizen for 3 years.

In particular, an artist examined, whom Akten does not mention, would have burned the equivalent of 77 years of electricity consumption of a European citizen to sell the 1500 editions of his NFTs in the span of six months (160 tons of Co2).

In total, 3.8 million tons of Co2 were spent on all NFTs analysed in Akten's research. The equivalent, again for the conversion of Akten's carbon footprint, of 37,000 flight hours or to the electricity consumption of a European citizen for two thousand years.

On March 6, SuperRare CEO John Crain told Wired that he does not believe the comparison between transactions and carbon footprint is right. He considers Akten's approach sensational:

 "It is not fair to tell the artists that they are the ones who produce Co2 when there is a whole ecosystem out there".

 SuperRare, he explains, is looking for more efficient solutions, and points out that even an exhibition in a museum wastes energy, between the transport of works and the maintenance of a building.

The problem, however, is not so much in comparing one consumption to another, but in adding yet another energy-intensive and inefficient market to a collapsing ecosystem. It would be outrageous even if the cryptocurrency world only supplied itself with renewable energy. It is the consumption beyond reason that is disturbing.

The root of all evil is the circuit itself. There are cases where fossil sources are explicitly used to fuel the computational power of cryptocurrency mining 'farms'. The small company Giga Energy, for example, specialises in powering servers with natural gas from a proprietary field in Texas.

The artist Joanie Lemercier , known for her light installations, was also seduced by the cryptomarket. A climate activist who has been intent on reducing his studio's environmental footprint for years, Lemercier soon decided to investigate the consequences of his November NFT sale on Nifty Gateway.

It consisted of 53 authentic copies of six works taken from a project by him on the 'Platonic solids'. He explains on his Di lui website: "I knew that the market was consuming a lot of energy, so I chose to limit my first sale (...). It was sold in 10 seconds".

To understand the impact it had had in terms of Co2, Lemercier asked the platform for feedback, without getting any answers. He then turned to Offsetra , a company specialized in calculating the carbon footprint of other companies, which determined a production of 80 kg of Co2 for each of the 53 NFTs auctioned (exchange currency: ETH).

On his Akten site, cryptoart.wtf , you can see the environmental impact of the sale of some works. Many new artists on Twitter and Instagram are referencing their search for him to raise awareness among colleagues.

Becoming a millionaire has a huge cost

With the art market booming, every work put up for auction seems to have some chance of enriching its author overnight.

The possibilities for instant profit are enormous: Nyan Cat's NFT, the viral gif of a cat stuck in a candy, was sold for the equivalent in ETH of nearly $600,000 on Foundation (although the exchange rate fluctuates from hour to hour). Now). A grotesque 10-second video by artist Beeple, depicting Donald Trump, was resold for 6.6 million. The first tweet from Jack Dorsey , the CEO of Twitter, also went up for auction .

"Update: the new record of 11 March goes to Beeple who through the historic art house Christie's auctioned his Everydays - The first 5000 days: a single JPG file containing all the images posted online so far since 2007. Party at $ 100, the NFT was sold for $ 69 million. A record for a work by a living artist who qualifies third after the figures spent on works by Jeff Koons (91 million) and David Hockney (90 million)."

But there are also gains for many small artists, who have found themselves faced with the possibility of being able to make a living from their art for the first time in their life.

However, the lack of clarity on the energy expenditure of the platforms, on their sources of supply, the lack of studies in this regard and the widespread nature of the system, which prevents precise quantification, make the market very opaque for those involved in the protection of environment.

The ecological impact of cryptocurrencies is a much discussed issue. There are those who argue that the economic benefits and the possibilities of reinvestment in renewable energy compensate for the exaggerated consumption.

According to others, the impact of NFTs is still less than that of art collateral markets, such as the sale of t-shirts with prints from productions located in China. To argue that NFTs do not consume, some users have then produced explanations of various kinds. What would argue that 70% of the network is supported by renewable energy contrasts with the estimates of other research. 

Many try to devalue the size of the network's consumption. Yet even without cryptoart, according to a BBC research from 2019, the Bitcoin circuit alone at the time would have consumed as much energy as the Netherlands.

For artists, including Akten, who have signed a manifesto in Flash Art magazine, 'For a new ecology of cryptoart', it's a cultural problem. 

The world of cryptocurrencies is an illusion of collective and distributed wealth that responds to the neoliberal ideals of markets without controls and the unlimited exploitation of limited resources. A logic that should scare the artists of the 21st century, on which the weight of the great question of the millennium hangs: the survival of ecosystems.

The signatories of the manifesto argue that the market cannot be expected to 'regulate itself'. The less energy-intensive versions of cryptocurrencies, including Ethereum 2.0, are still under development, at least a couple of years and millions of tons of CO2 away.

The whole digital world, from social networks to Netflix , has an impact on the environment. But with the same time, use and results, the cryptoart market far surpasses them. An intervention, therefore, is even more necessary.

A hyper consumerist logic

Cryptocurrency and by extension cryptoart is a much more energy-intensive circuit than the traditional economy, certainly more restricted, but still loudly supported by technology visionaries.

Among them is the billionaire Elon Musk, certainly not a symbol of environmental protection: for his Gigafactory 4, the largest Tesla electric car factory in Europe, he had no problem cutting 92 hectares of forest in the area of ​​Berlin.

No wonder: the ecological revolution, thus conceived, is a hyper-industrial race to the technological leap with the latest resources available on a collapsing Earth.