Why Does NFT Crypto Art Waste So Much Energy
Discussion
Why does cryptoart waste so much energy?
Everest Pipkin:
"Cryptoart is a piece of metadata (including, generally- an image or link to an image/file, the creator of that file, datestamps, associated contracts or text, and the purchaser of the piece) which is attached to a “token” (which has monetary value on a marketplace) and stored in a blockchain.
An individual piece of cryptoart is called an NFT. You can think of each NFT as a trading card or a collectible with an individual value that is also affected by the general market value of NFTs as a concept, the Ethereum network and cryptocurrency in general. Like beanie babies without the beans.
Cryptoart is bought and sold with- and has its value calculated in- Ethereum, a 6-year-old cryptocurrency that was (at the time of writing, 2 pm March 2nd 2021) trading at 1 ETH = $1476.21 USD.
Several artists have written about the specific environmental costs associated with cryptoart. Numbers vary, but minting artwork on the blockchain uses somewhere between weeks, months, years, (and in rare instances decades) of an average EU or US citizen’s energy consumption. (You can see the energy usage and emissions of individual NFTs at cryptoart.wtf.)
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.
There really isn’t much contention on ‘powering an art market with incredible amounts of burned energy’ being a bad thing, although accounts differ to what extent NFTs are directly contributing to the problem.
A recent article by NFT marketplace Superrare, who may have, uh, some skin in the game would like to remind you that Ethereum’s carbon emissions are tied to price NOT volume. To borrow a metaphor from their article- you can think of the Ethereum network as a train, which will run whether or not the seats (NFTs) are filled. They would like to gloss over the next bit of the metaphor, which is that seats on trains are more expensive when trains are full, which in the case of Ethereum makes the whole network emit more carbon.
There is nothing specific about the energy cost of cryptoart that isn’t true for anything else that can be “minted” on the Ethereum blockchain, or that is bought and sold with a currency that is dependent on burning energy.
Why is this? This is because major cryptocurrencies- most notably Bitcoin and Ethereum (which is what NFTs are traded with)- use a protocol to determine their value called “proof of work”.
Proof of work, in essence, is a way to confirm that computational effort has been expended by “the prover” (the system doing a task). The idea was originally conceived in 1993 as a way to disincentivize things like spam or bots. Proof of work was supposed to be unnoticeable by normal human users, but would make things like the thousands of requests needed for a denial-of-service attack hard to run. It is like a little puzzle for your computer.
Fast forward to 2009, which saw proof of work (along with another technology called the blockchain, a kind of public ledger) used for a very different purpose; making the digital currency Bitcoin. This is a simplified explanation, but to make a bitcoin, Bitcoin “miners” task their specialized computers to solve those proof of work puzzles, competing with one another to validate blocks on the blockchain. A successful solution- which is somewhat rare- rewards the miner with the new coin. The more a computer “works” (the more energy is expended) the more competitive it is. You can think of it as a lottery, with every kilowatt-hour a ticket. This process is called mining.
This started innocuously enough- mining in 2009 was a background process that could run on a laptop as it idled. However, the difficultly of mining blocks in the blockchain is designed to increase over time. This is because as the network grows, the relative rate of new coins mined stays stable (for Bitcoin, about 1 block is mined every 10 minutes). To solve the problem of more computers mining, the proof of work puzzles get harder. Miners get more computers, better GPUs. The puzzles get harder. Miners move to places with cheap electricity. The puzzles get harder. Miners retrofit warehouses, air-condition shipping containers. The puzzles get harder. Monumentally harder.
After a decade+ of a growing cryptocurrency market, what we’ve been left with is a financial network that uses more energy than Argentina, with no regulatory structure or federal oversight whatsoever.
This is not a new problem; the ecological devastation rendered by an out of control proof of work system has been written about for almost as long as cryptocurrency has been around.
And lest you think we are dealing in long-term abstractions- this devastation has tangible, externalized cost; a recent study out of the University of New Mexico estimated that in 2018 every $1 of Bitcoin value was responsible for $0.49 in health and climate damages in the US, costs that are borne by those who will, for the most part, never see any return from cryptocurrency mining whatsoever." (https://everestpipkin.medium.com/but-the-environmental-issues-with-cryptoart-1128ef72e6a3)