Why NFTs Could Start a Social Movement
“I think we should get into NFTs”.
This was a message that I received on a Tuesday, just days before the artist Beeple sold a collage of Instagram posts for $69 million, before Damien Hirst made headlines with promises of a secret NFT art project, before Twitter, Instagram and Youtube become sites for climate-shaming and moralistic discussions about carbon footprints and ethereum gas fees.
“What’s an NFT?”, I asked.
“It’s a token on the ethereum blockchain that gives someone the right to say their own an artist’s work”.
“So it’s a way to sell usage rights?”
“No. Not the usage rights. Just the right to say you own an original copy of the art”.
“Why would anyone buy that?”
“Why would you want the original of a painting, and not just a print?”, my friend countered.
“I guess there’s value in authenticity”.
Value indeed. In February 2020, the total value of all cryptoart sold was less than half a million dollars. In February 2021, it was over 90 million, with much of that value residing in secondary sales as investors re-sold the non-fungible tokens of a growing boom in digital paintings, renders, animations, and collectibles.
I didn’t know that yet, on Tuesday. “Do you think we could make any money”, I wondered. In reply, I received a link to a seven second animation of a black cube morphing into various shapes. “Do you recognise this?” My friend included the laughing/crying emoji.
“It looks like someone’s followed the Greyscale Gorilla tutorial on Youtube for how to make soft body objects in C4D” , I texted back.
“Yes”, they replied. “And it’s just sold for $88,000”.
Launch time
By the end of the day, I was ready to launch.
I had an ethereum wallet installed neatly in my Chrome browser through an extension provided by Meta Mask. I had tried to buy $100 worth of ether and then contacted my bank to say thank-you-very-much for blocking that transaction but yes-I-do-actually-want-to-buy-cryptocurrency and no-it’s definitely-not-for-drugs. I had discovered the platform OpenSea, which allows artists to create and sell NFTs without actually spending any money (winning!) and I’d spent hours on different digital art marketplaces, coming to the judgement that SuperRare was where ‘real’ digital artists sold well-composed one-off works, while Rareible was for selling sets of digital collectibles, like 3d models of different dogs wearing pyjamas. This time last Tuesday, I was on a high at the thought of earning easy money with a production line rendering process and a few strategic Instagram posts. I could follow Youtube tutorials! I was the co-founder of a digital arts and media practice! I worked side by side with an award-winning render artist! We were going to be rich!
I’m writing this article one week later. No money has been made. No NFTs have been minted. No renders, animations, or collectible items have been sold. At least not by me. I have taken a breath to sort out for myself the difference between a token and a token contract, to understand how ERC-721 is different from ERC-1155, to balance the pros and cons of storing NFTs metadata on-chain or off, and to appreciate market innovations like lazy minting, which lower the barrier to entry for digital artists unable to cough up the cash for high ethereum gas fees. I have taken a breath to balance the ecological and social costs of minting and selling NFTs. And as I have done so, the construction of NFTs as a forcible source of value has continued, and the comment threads of social media posts and Github issue pages have filled with discussions that jump from economic theory to moral philosophy.
I find the conversation about the environmental impact of NFTs complex and fascinating, firstly because it is unfolding right now, in the most public spaces of the internet, and secondly because it hints at a new trend in digital art and cultural trend setting: a #YouToo movement for the environment.
The Shape of the debate
In December 2020, artist and technology researcher Memo Arken published a series of Medium articles on ‘The Unreasonable Ecological Cost of #Cryptoart’. By that time, according to his calculations, the crypoart market was responsible for 263,538 Kwh of energy and 163,486 Kg of CO2, or the equivalent of flying in an aeroplane for one and a half thousand hours. His articles accompanied a website — cryptoart.wtf — which calculated the energy expenditure and carbon emissions for individual NFTs and ethereum accounts.
Not so fast! Says a blog post on digital art marketplace SuperRare. Ok, so the ethereum blockchain is quite energy intensive. But don’t blame that on digital artists trying to make a living from the sale of their work through NFTs! SuperRare suggests that we can think of the ethereum blockchain as a train travelling on a fixed schedule from one station to the next. NFTs are like a certain type of passenger buying seats on the train. With them or without them, the train is going to move, and any seats the NFT folk leave unfilled will be taken by a different type of transaction — decentralised finance, for example.
It’s artists versus bankers in a new cryptographic class war!
That train analogy is not right, responds Memo in part two of his essay series. Every type of ethereum transaction has a corresponding ‘gas fee’, or amount of computational power required to process it. Every block of ethereum transaction mined by the network has a cap on the total amount of gas that it can contain (12.5 million gas units). Minting a single edition NFT costs about 260,000 units of gas, or 2 per cent of the total allowance of the block, while a simple transaction like sending ether from one account to another costs about 21,000.
Using Memo’s explanation, NFTs begin to seem more like airline passengers who buy up a whole row of seats for themselves, forcing the other people who would have sat in those places to demand the scheduling of a subsequent flight. Are artists who sell NFTs the equivalent of billionaires buying themselves private airlines?
Analogies are unhelpful! Claims a series of comments, tweets, and blogs. Ethereum miners respond to speculative future value, not day-to-day demand, meaning that the rate of block mining will stay relatively constant and increase or decrease as the amount of money earned per unit of work approaches the per-unit cost of electricity. If you want to blame someone for the link between NFCs and emissions, blame the design of the network which rewards miners for mining in the first place!
Hmmm..gurgles my brain. Since December, the price of ethereum has increased by more than 155 per cent and demand for powerful GPU graphics cards useable for mining has pushed the waitlist for Nvidia products (for example) into the months. The company is rolling out a new product line designed for cryptocurrency mining. Regardless of how immediately direct in time, ethereum demand does seem to encourage more people to mine, and the boom in NFTs is driving up ethereum demand.
Don’t think too much about it — suggests a page on ethereum.org. In any case, many miners use renewable energy — so everything is fine!
Um — nope! Retorts Memo. At most, 30 per cent of mining power comes from renewable sources, and that is taken into consideration when calculating the emissions from NFTs on cryptoart.wtf. Minting a single issue NFT still produces as many emissions as a single person living in an EU country for a month. In China, miners “equally report using hydropower and coal energy to power their operations”.
Be that as it may, warns Dave from Offsetra, tying gas fees to emissions makes individual artists look directly responsible for pumping clouds of greenhouse gases out into the atmosphere, and the calculation is more complex than that. This isn’t a witch-hunt against artists!
Indeed, indeed, agrees digital artist Ten Hundred in a Youtube video. We shouldn’t be blaming artists at all. He himself announced an imminent NFT drop before concerned fans enquired about its ecological impact and he did some googling and discovered how his “art almost destroyed the planet”.
Stop blaming artists, cries zeta mask yo. The methodology in cryptoart.wtf is flawed! Cryptoart isn’t that bad!
On the contrary, writes everest pipkin. “During unprecedented temperature increases, sea level rise, the total loss of permanent sea ice, widespread species extinction, countless severe weather events, and all the other hallmarks of total climate collapse, this kind of gleeful wastefulness is, and I am not being hyperbolic, a crime against humanity.”
#YouToo and ecological accountability
I am staring at the ceiling mumbling about transaction costs and carbon footprints. My friend must have felt my confusion through the ether. They call. “So everyone agrees that mining cryptocurrency is bad for the environment?”
“Yes’’ I reply. “On that we are agreed. The question seems to be how much and who’s to blame. The proof-of-work concept that makes current blockchains decentralised and secure means that millions of computers are racing to solve increasingly difficult computational problems and collectively demanding an immense amount of power”. My friend mulls this over. Then they say:
“So if irreversible global heating is a pool of lava at the bottom of a hill, and humanity is on a sled hurtling towards it, it doesn’t really matter if cryptomining and NFTs are the equivalent of a cat or an elephant, we don’t want either to get on the sled with us”.
“NFTs are already on the sled”, say I.
Some artists like Ten Hundred and Jacob Collier have announced NFT offerings only to counter-announce in the face of criticism. Twitter posts about NFTs are attracting negative comments, and cryptoart.wtf has been taken offline after its calculator was used to target specific artists about their voluminous carbon sins. A public reckoning about the pay-offs of digital art (and maybe digital industries in general) may be underway. On one hand, NFTs offer digital artists a way to monetise their work, even encoding within them a mechanism to pay creators a royalty every time artwork is resold — for perpetuity. Digital marketplaces are radically more accessible than physical art markets. I personally know multiple creators who are making tens of thousands of dollars by minting and selling NFTs. On the other hand, two weeks ago, these same creators were posting their art online for free. Hackers were not targeting the laptops of poor, impoverished artists and ripping from their hard-drives the golden fruits of their creative labours, denying them a means to put food on the table.
The conversation we may be about to have is are NFTs worth their environmental cost? Coming after a year of contractions and strains on creative industries, the restructuring of entire industries to be online and remote, the unemployment of millions, and endorsement of art and entertainment as a public health good — this is going to be a timely and vitally important conversation to have. So let’s begin!
