NFTs look to be great for digital artists, but not for the environment. They have placed the ownership back in the hands of digital artists, allowing them to profit from their works that would otherwise be shared freely. However, there is an environmental cost, making NFTs great for digital artists, but not great for the natural world around us.
NFTs (non-fungible tokens) are digital tokens tied to assets or collectables that can be bought, sold and traded. NFTs provide ownership and authenticity to digital assets, most commonly, digital artworks.
Like cryptocurrencies such as Bitcoin, they exist on a blockchain—a tamper-resistant digital public ledger.
Blockchain is a system in which a record of transactions made in bitcoin or another cryptocurrency is maintained across several computers that are linked in a peer-to-peer network.
Artists who want to sell their work as NFTs have to sign up with a marketplace, then “mint” digital tokens by uploading and validating their information on a blockchain.
Every single owner of an art piece will be known to anyone. Every single sale, bid or transfer would be recorded on the blockchain in a transparent way.
Profit from NFTs comes from the scarcity of an item or the bragging rights for an individual in society.
Artists can create value around a work by cultivating a story or community, the same way galleries created spaces to compliment artworks in showcases, shifting the power back into the hands of the creators, not third parties.
Investing in NFTs has boomed in recent months as the future providence of artworks is their status on the universal ledger of NFTs.
Most notably, artist Mike Winkelmann, referred to as Beeple, sold an NFT for his digital artwork ‘Everydays – The First 5000 Days’ for $69 million through auction.
After decades of digital artists building online presences and getting nothing in return for their work; authors, musicians, painters, poets and filmmakers are diving into the world of NFTs.
Digital artist Jazmine Boykins, who is known online as BLACKSNEAKERS stated, “artists put so much of their time—and themselves—into their work. To see them compensated on an appropriate scale, it’s really comforting.”
NFTs Not Great For Environment
However, what is the environmental cost of this booming creative market?
Ethereum is the server that stores the digital proof and blockchain transactions.
The method that’s used to verify the blockchain and to create new digital coins is deliberately energy-intensive and inefficient. Ethereum requires computers to handle the computations, known as “mining,” and those computers require a lot of energy.
Blogger Everest Pipkin has released a statement article damning the growth of NFTs in a bid to raise the environmental damages in our foreseeable future. To read the whole article, click here.
He states, “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.”
Pipkin likens ethereum mining to a train, “they will run whether or not the seats (NFTs) are filled. And the train is really small, runs every 5 minutes and seats are more expensive depending how full the train is.”
The baseline Ethereum network supports roughly 14 transactions (seats) a second; beyond this, minters enter a bidding war for these seats. A bidding war incentivizes miners to compute blocks with a particular transaction in them, increasing the number of miners working on specific blocks and directly contributing to emissions.
The energy use of crypto mining servers is said to be equal to the energy consumption of Argentina. Innovators and environmentally conscious artists are coming together to encourage other creatives to help develop more ecologically friendly and transparent NFT mining platforms. The goal is to create platforms where digital artists can continue value-adding their works, without the environment suffering the consequences. For now, it looks as though NTFs are not great for the environment, but there is a group of innovators and engineers working tirelessly to change this.