is crypto art sustainable?

What makes Crypto art so unique? For one, it allows artists to create, produce, and sell their artwork digitally. What’s even cooler is the concept of cryptocurrency! To keep a record on transactions, verify ownership of the artwork, and track additional coins, an entire decentralized digital system was created to add value to the artwork posted. It is fascinating how quickly value is transferred globally for a small cost. Crypto offers greater autonomy to the artist since they are the ones who have full access to their assets. But with crypto becoming so popular, concerns regarding individual pieces of crypto art or NFTs (non-fungible tokens) have risen.

NFTs, a cryptocurrency token, has been known to increase carbon emissions via the unreasonable power consumption thereby contributing to global warming. A recent study about NFTs by Memo Akten has shown the extent to which crypto art harms the environment. His study reveals in just less than half a year, one crypto artist has a footprint 260 Mwh which is essentially 160 tonnes of Co2 emissions. He compares this value to flying for 1.5 thousand years or driving 838 thousand km. The process of producing NFTs is dependent upon the “computational capabilities of thousands of computers” requiring more energy than standard servers can provide. In addition, each transaction has an estimated footprint of 27.7kg of Co2 which is equivalent to the electricity consumption of an American home over 2 days!

So, can we try out crypto art while reducing the impact NFTs have on the planet? Whenever any product is produced at large one of the best solutions is to regulate it, and in this situation PoS protocols (proof of stake) should be implemented on the blockchain since it reduces impact by 99%. There are a few ways cryptocurrency can be regulated without being completely restrictive. Generally, banks and currency houses regulate foreign exchange flows and after the exchange, the person has full control of what happens. The same can be applied to cryptocurrency. In order for this to take place, we need banks to open accounts for exchanges. Although, many banks are reluctant to pursue this notion since they fear criminals and hackers will use the funding for the dark web and laundering, but if the exchanges were efficiently regulated, the bigger banks will be more accepting.

Furthermore, there needs to be clarification in regards to the tax situation. Tokens need to be traded in and out of the government-backed currencies (U.S. dollar) in order for a chance to make a profit and the IRS needs to provide greater guidance on transactions.

Another plausible solution includes using sustainable blockchains instead of Ethereum, a Proof of Work system which consumes a large amount of computational work resulting in excess usage of electricity. Ethereum is extremely harmful compared to other sources because it uses up to 70.32 Kwh which is enough to power one household for two and a half days. To gain a better understanding of how harmful it is, Ethereum consumes more energy in one years compared to all of Denmark. Therefore, finding other sources of energy is pertinent. Bitcoin has also started becoming more sustainable with a plan to place mining centers in renewable energy farms during low-demand periods.

Blockchains are the best option in the sustainability lens because of their potential to provide a high level of transparency. What blockchains have in comparison to other supply chains is that they have a structure where encrypted copies of information can be stored on every server. Transactions are made more easily because blockchain systems “validate entries”, which allow for safe circulation of entries. However, even with sustainable options, any small currencies or supply chains used at a large scale can become harmful.

Lastly, by simply talking about the issue at hand, more developments and research in the field can be made. Applications built upon blockchains have the potential to drive great social and environmental change since it’s more incentivized. For instance, Margot McMahon was able to call attention to the significance of life on earth through her sculptures and drawings. During the time scientists began to consider climate change as a serious issue, artists like her were able to stir great change by depoliticizing the issue. The great thing about art is every new generation of artists carries contrasting interpretations in which each individual connects with a piece differently, and that’s what makes art so powerful.

There are still very many companies such as Superare, a marketplace for digital artwork, that disagree with the concept of cryptocurrency being harmful to the planet. There are still many questions to be answered in regards to how cryptocurrency can change and become more sustainable for long-term use. Right now, the topic is still in the air. More research and transparency need to take place in order to decide the next step for crypto art sustainability.

Published on 2021-11-15

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