The recent emergence of cryptocurrencies and NFTs has created a booming market for visual work; in 2021, the Business of Fashion reported that sales of NFTs rose to $10.7bn in the third quarter compared to just $1.3bn in the first quarter. Digital artwork largely fuelled this rapid acceleration though fashion was quick to respond as legacy houses like Burberry and Dolce & Gabbana raced to align themselves with gaming platforms such as Roblox and Fortnite to attract Gen Z consumers via NFT drops and branded virtual worlds.
**Want to get paid to make art that highlights crypto's affect on the planet? We're giving away $3.5m in grants with Arts Help and we'd absolutely love to fund your next project**
According to a recent study by BoF Insights, 50% of those interviewed are interested in purchasing a digital asset in the next 12 months. Screenwear, a new report by Virtue Worldwide and digital fashion marketplace The Dematerialised, revealed that 62% of US consumers surveyed already own a digital item.
It’s easy to see the appeal of NFTs—which are mostly used to sell digital art—and the more equitable business models they provide. While the internet 2.0 offered new ways for creatives to get their work out there, it provided as many, if not more, ways for digital work to be copied and profited off without attribution. By contrast, crypto art has granted artists ownership and a means to monetise their content. Today, artists can programme royalties into their NFTs to create a passive income stream, which is only possible because blockchain acts as a digital form of record-keeping, allowing artists to track every trade. “You don't need any middle man like a brand or gallery because we have replaced these institutions with code,” said digital artist Andrés Reisinger in an interview with Dezeen.
As digital art accelerated, so did carbon emissions.
NFTs are actualised by blockchain technology and as Linda Chew, Head of Business Operations at Forte, explained to Arts Help (who Talenthouse is currently partnering with to give away $3.5m), “the carbon footprint conversation has more to do with the underlying blockchain where the NFT lives than the NFT itself.”
Currently, most NFT marketplaces use traditional blockchain technology such as Ethereum, which guzzles astronomical amounts of energy to process transactions.
Energy use of countries compared to Bitcoin, from Cambridge University data
Data by Arts Help suggests Ethereum and the entirety of Nigeria have around the same annual energy consumption, while Bitcoin’s is closer to Argentina’s annual output, according to an analysis by Cambridge University. All this energy consumption can be translated into carbon emissions - most of which comes from fossil fuels rather than renewable energy, which in turn contributes to global warming.
So while NFTs undoubtedly allow for a more financially equitable marketplace, creatives now face a new dilemma.
How can creatives participate in this new economy in an eco-conscious way?
Throughout history, art has been a driver for social change. Great art has propelled the culture forward and given voice to injustice and inequality. Today, we see environmental activism play out in new and innovative ways as creatives address the climate crisis. Chris Precht, an architect who canceled his NFT releases after researching their environmental impact, addressed this via resistance, while Arts Help’s Conscious Crypto Creator is a creative community that campaigns for sustainable and scalable solutions to the current blockchain via direct action.
As cryptocurrencies are decentralized, there needs to be a way to verify transactions without a central authority. Currently, the oldest and most common verification is a blockchain that employs what’s called a Proof of Work (PoW) algorithm, which is incredibly electrically intensive as a vast network of computers essentially competes to solve the problem in exchange for some bitcoin. The more computers needed to ensure the network is stable, the more energy consumed, explains Catherine Mulligan, a professor of computer science in the Business Insider. Bitcoin established this protocol when it became the first cryptocurrency back in 2009 as cryptocurrency was in its infancy and only used by a minority of early adopters, the energy intensity of the algorithm was negligible.
However, as cryptocurrency has excelled beyond a fringe interest into a major player in the global economy, it needs to join the industry-wide effort to clean up energy consumption.
The push for sustainability is gathering pace
There are initiatives, such as Crypto Climate Accord, which aims to decarbonise the global crypto industry by 2040. Bigger cryptocurrencies are also building charity verticals into their business model. Binance Blockchain Charity Foundation—an offshoot of the cryptocurrency Binance—is using blockchain to make global giving transparent and traceable in much the same way as Provenance, a tech transparency solutions provider that empowers customers to shop in line with their values by illuminating the often-murky global supply chain.
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Creatives like Sutu, the co-founder of EyeJack, an augmented reality app and Kristy Drutman of Brown Girl Green are driving the conversation around cleaner systems forward. Currently, this means choosing “clean NFTs” or rather a cleaner blockchain to sell them on. Artist Joanie Lemercier, one of the first creatives to speak out against the environmental impact of NFTs believes the answer lies in moving away from Ethereum-based blockchains that use the PoW algorithm in lieu of newer blockchains that employ a Proof of Stake (PoS) algorithm. PoS is a less energy-intensive model that’s already being adopted by digital marketplaces such as The Dematerialised, which has partnered with RE:EARTH to plant one mangrove with every NFT purchase.
Ultimately, as cryptocurrency enters the world stage, the onus sits within corporate social responsibility. Art will always be a vehicle for change but without sustainable and scalable solutions within the cryptocurrency industry, artists are left grappling with impossible ethical and environmental dilemmas.
Being able to own and profit from your art needn't contribute to the destruction of the planet.
**Want to get paid to make art that highlights crypto's affect on the planet? We're giving away $3.5m in grants with Arts Help and we'd absolutely love to fund your next project**
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