You’ve probably heard of cryptocurrencies like Bitcoin or Ethereum—the all-digital currency that isn’t centrally tracked by a bank. It has exploded in popularity over the past 10 years or so, but this post is not about that. It’s about the underlying technology—the “blockchain”—that is used to keep track of all bitcoin transactions, and also used in other crypto-related industries.
I can’t pretend to be an expert on this, but I recently read the very illuminating article, “The Unreasonable Ecological Cost of #CryptoArt” by Memo Akten and I think, at the VERY LEAST, this should all be heavily investigated. I’m just going to assume his claims are accurate (or close to accurate) because the logic makes sense to me. Below is a bit of a condensed version of how this works and why it’s so bad.
“Bitcoin, Ethereum, and many other cryptocurrencies use a consensus algorithm known as Proof-of-Work (PoW)¹ ². This allows information to be stored in a distributed, decentralized manner across many nodes in a network (e.g. The Internet) while remaining secure, reliable, and dispute-free.”
“Ingeniously idiotic, by design² the PoW blockchain is outrageously computing-intensive and wasteful in its energy consumption [1, 2, 3, 40]. The original cryptocurrency Bitcoin (BTC), is estimated to have an annual footprint in the range of 80–110 TWh [3, 40], with a footprint of 685 kWh for a single transaction , and corresponding carbon emissions in the range of 326 Kg of CO2. To put that into perspective, that’s equivalent to the total electric power consumption of an EU resident for 3 months ; the emissions of driving for 1.5 thousand km in a petrol car (including exhaust emissions and emissions from the production of the fuel) , or flying for 3 hours  (Annualized comparisons here).”
The TLDR: every transaction done using crypto technologies is very, very wasteful in terms of energy consumption because of how the transactions are tracked by thousands of computers. I’d suggest reading Memo’s entire article to get a better understanding of why it is this way.
So back to CryptoArt. Recently a lot of digital art marketplaces have become popular that use the same (or similar) underlying technology that makes the cryptocurrency blockchain work to sell “limited editions” of purely digital art. It’s almost as wasteful in terms of energy consumption to facilitate one digital art auction as it is to buy something with bitcoin.
The technology used in conjunction with the blockchain is called “Non-Fungible Tokens (NFT).”
NFTs are custom tokens that can be created (i.e. ‘minted’) on the blockchain, and then traded. NFTs can be minted as unique one-offs, or they can be limited edition runs (e.g. of a few dozen, hundreds, or thousands). And linking NFTs to other assets (physical or digital), seemingly introduces a scarcity to those assets that might otherwise be unattainable.
This alleged scarcity, combined with the speculative crypto-hype-bubble-startup-craze — has fueled the CryptoArt market, as well as a booming general NFT Rare Collectibles market .
People are associating these NFTs as “editions” of an artist’s digital painting. It basically acts as a certificate of authenticity. Personally, I don’t understand the appeal, but it’s been taking off in popularity.
The website http://cryptoart.wtf/ scans popular CryptoArt marketplace websites and records the transactions/sales/auctions etc… of various pieces and will show you a random piece of art with its associated environmental impact in easy to understand statistics. The number gets higher depending on the number of editions and auctions. Some of them have generated emissions equivalent to an average EU resident’s electricity consumption for multiple months, or more. For some truly scary numbers, the website features a page that shows you some different collected stats from the recorded analysis of all art processed through the website http://cryptoart.wtf/#list=nfts.
It’s important to understand that the artists selling their crypto art most likely have zero clue the effect their art sales are having on the environment. That still doesn’t make it less awful for the planet. This issue should be thoroughly investigated and the public should be educated on any dangers found. So if you were thinking about taking a crack at selling your own crypto art, you should really think again until this is better understood.
TD note: Chris’ post is our studio’s 1,000th blog post! Thank you for reading what we have to say on a wide range of topics.
Senior Front-end Developer