GCC On NFTs: A Concise Guide
In recent months, many of us have become increasingly aware of the environmental impacts that digital tools can have. The most widely discussed of these being NFTs and the energy intensive blockchain process in which they are created.
As such, GCC has produced a concise guide that explains the potential uses of the technology, alongside a consideration of its significant environmental damage.
What is blockchain?
The blockchain is a technological system that allows you to store transactions within a network in a way that is secure, decentralised and transparent.
Blockchain technology has great potential for use in the art world, such as for securely and reliably storing proofs of transactions ranging from authenticity, to provenance, to condition reports.
Unfortunately, blockchain technology has been problematic from a sustainability perspective as the process of mining (in which high-powered computers solve complex mathematical problems) is hugely energy intensive. Urgent attempts have been underway to fix this growing concern.
Though things are improving, the most well-known blockchain models are the least sustainable, so if you’re in doubt as to whether you need it and are concerned about CO2 emissions, you should try and choose wisely. To read advice on specific blockchain models, see GCC Co-Founder and Artlogic Founder & CEO Peter Chater’s blog post on digital carbon footprints.
What is an NFT?
NFT is an acronym that stands for non-fungible token. NFTs are a branch of crypto currency that use blockchain technology to establish the provenance and authenticity of an artwork or other digital asset. These digital artworks are ‘minted’, which is a method of certification that means a digital asset is unique and cannot be forged. This model, based on the concept of ‘verifiable scarcity’ means that digital artworks can be rightfully owned or traded.
Blockchain-based technology therefore offers a platform for artists to sell works directly to a client, without the need for third party involvement, whilst preserving their authenticity.
The NFT artworks themselves, or “crypto collectibles,” can be considered both a new form of artistic medium, a rights-management mechanism, and digital assets in and of themselves.
Whilst this can be seen as a breakthrough for digital artists, the ‘crypto art’ movement is receiving growing criticisms for its environmental impact.
What are the benefits?
Many artists are excited by the possibility of NFTs. For the first time in history, digital artists are now able to rightfully own and sell their artworks and therefore generate an income from their work.
As blockchain technology creates a transparent log of ownership and sale prices, this has the potential to bolster artists resale rights.
This also offers artists a more direct relationship with buyers, as it removes the need for third party involvement, such as galleries.
What is the environmental cost?
All digital usage has an environmental cost. While exact figures of carbon emissions are hard to measure due to the ever evolving nature of technology, there is no denial that blockchain technology is hugely energy intensive to produce and distribute.
Most NFTs live on the Ethereum blockchain which is one of the less environmentally friendly blockchains.
For example, The Guardian recently reported that the sale of 303 editions of Earth, an NFT produced by the musician and artist Grimes, “used the same electrical power as the average EU resident would in 33 years, and produced 70 tons of CO2 emissions.”
The artist and computer scientist Memo Akten investigated the inefficiency of NFTs and their subsequent environmental damage in a recent article. In it, he states that a single Ethereum transaction is estimated to have a footprint on average of around 35 kWh which is roughly equivalent to an EU resident’s electric power consumption for 4 days. This is for a single Ethereum transaction, and his research suggests that NFT sales and related transactions are a lot more complex and ultimately, damaging.
Many of those who work in the field of crypto currency are aware of the environmental damage and are seeking solutions to improve NFT efficiency in the short and longer term.
In the coming weeks, GCC will be updating it's digital resources to reflect the ever-evolving understanding of NFTs. If you would be interested in participating in a future event on this subject, please contact info@galleryclimatecoalition.org.
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