When the website ArtStation announced plans to start offering NFTs, short for non-fungible tokens, the last thing it expected was backlash. But within hours of tweeting about its intentions, that’s precisely what it got.
Almost immediately, the site’s patrons loudly voiced their opposition to the move, citing concerns about the environmental impact of putting art on the blockchain. The uproar reached such a peak that, before the day was done, ArtStation decided to pull the plug on its NFT initiative before it had even launched.
“In light of the critical reception on social media regarding NFTs, it’s clear that now is not the right time for NFTs on ArtStation,” the company wrote in a blog post. “We are very sorry for all the negative emotions this has caused. Despite our attempts to validate our approach, we clearly made a mistake and admit fault.”
The people behind ArtStation aren’t the only ones who failed to consider the staggering carbon footprint of crypto art before attempting to cash in on the NFT gold rush.
Joanie Lemercier wishes he had known about it before he sold six of his light-bending artworks as NFTs. Lemercier, a French artist turned climate activist, has spent the last few years trying to cut his annual emissions by 10 percent with significant measures like ditching air travel and integrating rainwater into his studio. His NFT launch erased the progress of those efforts in a matter of minutes.
Austria-based architectural designer Chris Precht was far luckier. Right before he had made up his mind to sell 300 editions of his artwork as NFTs — with the added condition that he would plant enough trees to offset this technology’s emissions, his partner warned him: “You need Amazons, not trees to offset NFTs,” she told him.
The rise of NFTs, which are essentially certificates of ownership for any virtual asset, from pictures of a painting to tweets, has sent the art world into a frenzy — and understandably so. With artists facing a pandemic-fueled downturn in the absence of in-person exhibitions and auctions, NFTs have emerged as a much-needed saving grace for many.
While NFTs have been around for a while, they landed 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 racked in millions of dollars. But NFT fortune comes at a grave cost, as artists like Lemercier and Precht discovered: They’re spectacularly bad for the environment.
The hot new NFT trend is heating up the planet
The end-to-end transaction of a single NFT, on average, is estimated to emit the carbon equivalent of a two-hour flight or a month of an EU resident’s electricity consumption. This is just for trading ownership for one digital asset. The figures only get worse when you consider the multi-edition sets artists are putting up for sale. In the last month alone, over 100,000 such transactions took place on some of the leading NFT marketplaces, per a tracker site called NonFungible.
Lecermier’s six-edition NFT drop, which sold out in a mere 10 seconds, for instance, consumed more electricity than what his entire studio consumes in two years.
Alex de Vries, a data scientist and creator of Digiconomist, a site that’s been tracking cryptocurrencies’ carbon footprint for years, says “cryptocurrency mining is already negating our entire net gains from deploying electric vehicles.”
But NFTs are only the tip of a (melting) iceberg. The reason an NFT’s carbon footprint is so vast is because of the way its underlying platform of choice, Ethereum, works. You see, creating, say, a JPG picture on your computer won’t take up a whole lot of energy. But to forge its NFT — a unique, nontradable token of ownership for it — its information has to be “minted” onto the Ethereum blockchain, which is not at all designed to be green. Access to this information is what the person who acquires the digital asset is paying for.
The root of the problem: Ethereum
In order to successfully record an NFT’s information on Ehtereum and add a new block to its chain, miners need to use power-hungry computer hardware to crack complex cryptographic puzzles. The more power their computing rig has, the quicker it can solve the puzzle. The winner is rewarded with Ethereum coins, which at the time of writing, were trading for around $2,500 a pop.
That may not sound like much but these machines aren’t your usual run-of-the-mill PCs. Their computations involve breaking down large math equations that can take hours or even days to complete. Not to mention this takes place on thousands of machines as everyone attempts to reach the finish line before anyone else.
A single Ethereum transaction, therefore, ends up gobbling up the same amount of electricity as an average U.S. household would over 2.56 days. The NFT process from start to finish often involves multiple such transactions. To date, according to Digiconomist, Ethereum’s power consumption is equivalent to that of the entire country of New Zealand.
Aurora Sharrard, director of sustainability at the University of Pittsburgh, likens the virality of NFTs to fast fashion and believes it’s not in line with our sustainability targets.
“While NFTs and cryptocurrencies are means for various industries and artists to work around economic market hurdles,” she added, “environmentally speaking, they are the digital fast fashion of the day, requiring extreme amounts of electricity to produce nontangible items whose positive social benefits have not been demonstrated to exceed their negative environmental impact.”
What’s worse, Ethereum’s existing system, called proof of work, is built to progressively become more complex and demand even more power as people continue to compete for it — to make it increasingly more competitive, to prevent cheating, and to shoot up prices as new blocks get scarce.
Replacing this system with a more environmentally friendly one that doesn’t involve thousands of giant mining rigs guzzling energy is what most experts believe could prevent Ethereum (and other blockchain-based platforms) from killing the planet.
That alternative is already here and it’s called proof of stake. In this model, Ethereum’s algorithm simply picks a miner to authenticate the new block based on how many coins they already own — eliminating the need for miners to compete and emit an enormous amount of emissions to break down the puzzle.
Proof of stake has been in development for years, but the organization behind Ethereum has remained vague about its release and repeatedly postponed its launch timeline.
The rise of eco-friendly blockchains
Fortunately, the proof-of-stake model isn’t exclusive to Ethereum, and a handful of NFT marketplaces have cropped up that take advantage of proof-of-stake blockchains to offer a more eco-friendly alternative to Ethereum-based services.
However, even though popular platforms like NBA Top Shot, where you can buy NFTs of NBA video highlights and trading cards, have found success in proof-of-stake blockchains, artists are wary of their volatility preventing such climate-first models from reaching the same level of popularity as Ethereum.
NBA Top Shot
Alice Bucknell, a London-based artist, believes the timid response towardsgreener platforms is also partly because of the “generalized lack of awareness around Ethereum’s gigantic energy consumption” and points out that “neither the currency nor mainstream NFT auction platforms are interested in making these figures transparent for the exact fear that it would scare away potential buyers with an environmental conscience.”
Ethereum-based platforms like NiftyGateway and SuperRare have been unusually secretive about their carbon emissions and have refused to reveal them, forcing artists and everyone else to rely on third-party trackers. Nifty Gateway and SuperRare didn’t respond to requests fro comment from Digital Trends.
Christina Akopova, co-founder of a proof-of-stake cyrpto-art marketplace called Pixeos, is nevertheless optimistic. While she agrees there’s “still a lot of education and awareness to be raised,” NFT and the blockchain industry will ultimately turn to the green side as long as reliable alternatives exist.
Clean energy probably not the solution
Another approach to tackling Ethereum’s carbon-intensive process is to either power it all with clean energy or offset the emissions later. While both these options appear sound on paper, they’re easier said than done.
Despite accounting for such a minuscule portion of world transactions, Ethereum is already responsible for consuming as much energy as many countries combined and is notorious for putting power plants under heavy strain. If left unchecked, environmentalists have good reason to predict that even clean energy won’t be enough to make such cryptocurrencies sustainable.
“Using only renewable energy to produce cryptocurrencies is a good start,” Sharrard told Digital Trends, “but the overall energy intensity and demand of the sector 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 supplying clean energy is simply not adequate to handle cryptocurrency’s growing appetite. He adds that electronic waste from piles of obsolete mining chips is projected to “massively outpace e-waste creation by the banking sector.”
For the time being, though, offsetting emissions may be the best way forward. On platforms like Offsetra, people can select the amount of carbon they’ve spent and directly invest in a pro-climate project of their choice.
Offsetra co-founder Brendan McGill claims offsetting is the most pragmatic solution right now since it’s something artists and miners can do right away instead of putting their NFT plans on hold and waiting for Ethereum’s proof-of-stake update. Environmental initiatives, McGill adds, are also in dire need of resources and they could use some from the ongoing NFT gold rush.
In the long run, however, a government reform that mandates eco-friendly systems and emissions offsets might be the only option for a sustainable future of technologies like NFTs. Otherwise, reckless mining ecosystems could end risking the fate of cryptocurrency. China, for instance, recently banned the world’s largest mining hub in Inner Mongolia over fossil fuel consumption concerns.
“The distraction of crypto methods that cause huge environmental and social damage isn’t good, fun entertainment — it’s wasteful fast fashion,” Sharrard said. “We only have one planet fit for human life and we need to make sure we’re not letting wasteful and harmful trends destroy the only place we can call home.”