A Decentralized Art Paradigm: Crypto Art, Climate Change, and Colonialism Examined

Abstract

In March 2021, the crypto art movement gained ubiquitous attention due to the sale of a non-fungible- token(NFT) by the artist Beeple. NFTs allow artists to mint their digital artwork and sell it as a digital asset in the form of a video or image file; thus, providing ownership rights in the form of a unique token on the blockchain. The current performance of digital art within the art market reveals its potential value and future uses being limitless; what you could call a turn in contemporary arts and culture. As critics are posed with this new emergence in high art, they are posed with questions surrounding critique, such as how this art form can be analyzed formally and interpreted socially. NFTs have the advantage of being easily disseminated online and are created to be viewed on a screen – much more convenient, perhaps, than going to your local art gallery, especially during the 2020-2022 pandemic. Some, like Gems of Resistance – Tanzania, are even playing the antithesis to energy consuming giants, by utilizing carbon-neutral designs and donating to various causes during a transaction. Gems of Resistance– Tanzania operates on a blockchain that uses proof-of-stake, limiting and often even eliminating needs to consume energy. This is important to the contemporary art and tech world especially, as the many uses of blockchain technology emerge, and issues surrounding neocolonialism are raised. There runs a parallel between crypto art and the desire to run on clean energy in the blockchain world, and artists are arguably, largely facilitating this change. As more blockchains are created, a focus on eco-friendly platform education to inform people on best practices should be implemented. As I will explain with concerns surrounding the privacy and security inherently characterized within the blockchain, it is easy for corruption to occur. As the online art market continues to grow, an increasing demand for new, specific, curated NFT exhibitions will become realized, requiring ethical oversight and interpretation surrounding transactions.

I.    Introduction

Since the first decentralized crypto currency was released in 2009, the world has become increasingly fascinated by the blockchain (distributed ledger technology) and its many uses. Crypto currency is possible because of the blockchain, which was used first for the transfer of money using Bitcoin in 2008; Blockchain technology evolved into being used for financial exchanges, insurance, real estate, securing medical information, voting, data storage, and gambling, among others.[1] As the role of blockchain technology evolves, the ability to continually recognize environmental, social, and governance concerns, such as, secure ownership to digital art, environmental impact, and oversight surrounding cryptocurrency transactions, can contribute to preventing neocolonial practices where they are not due; for example, the blockchain increasingly being used for economic benefits at the expense of people located in the Global South, is not acceptable.[2] In order for crypto art to remain relevant in 2022 and onwards, more sustainable methods will need to be applied within the mining process, as well as with “gas fee” transactions; Creators, collectors, experts, and enthusiasts alike have responsibility to implement sustainable frameworks, as the digital art trajectory unfolds within its current zenith.

By cross-referencing a few highly-used blockchain platforms and their methodologies, the qualitative and quantitative data gathered leads to a cross-analysis of Ethereum and Bitcoin as they are used in the context of crypto art. Bitcoin runs completely on a proof-of-work model, consuming massive amounts of energy, whereas Ethereum runs on both a proof-of-work and proof-of-stake, eliminating some of their energy consumption concerns. Proof-of-stake is a nearly carbon-neutral blockchain and is becoming increasingly favoured in attempt to decrease worldwide emissions. The benefits of transitioning crypto art to an entirely carbon neutral blockchain was researched for purposes pertaining to this paper by accessing peer reviewed journals regarding the carbon footprint left by the mining process involved in buying and selling on the blockchain. Scholarship regarding the advantages and disadvantages of NFTs (non-fungible tokens) in comparison to fungible tokens is explored, leading to the purpose of this paper to facilitate dialogue surrounding eco-friendly cryptocurrency, as well as to provide a case for supporting the migration of those using energy-consuming platforms, such as Ethereum, to using blockchains, such as EOSI, used by the Voice platform to create, buy, and sell eco-friendly NFTs.

II.   Literature Review
II.I   Crypto Currency Emerges

Before the release of crypto currency in 2009, several professionals had already begun writing and disseminating the concept of cryptography in the 1980 and 1990’s, such as the writer and electronic engineer Timothy May (1951-2018), leader of the crypto-anarchist movement.[3] May believed crypto currency would allow for anonymous transactions of money, which would provide the privacy and secrecy needed by society, and had released his Crypto Anarchist Manifesto in 1988.[4]  Around the same time, in the late 1980s, Cryptographer Stuart Haber and physicist Scott Stornette, while working as researchers at Bellcore in Morristown, New Jersey, managed to build a time-stamped ledger (the basis of blockchain technology).[5] Ten years later, 1998, Wei Dai then provided an outline for what would be called "B-Money," which was used as the foundation of pseudonymous developer Nakamota Satoshi’s release of Bitcoin, the first decentralized crypto currency, in 2009.[6] Nakamota essentially revolutionized currency by utilizing the invention by Haber and Stornette:

"Nakamoto took Haber and Stornetta’s concept of a distributed ledger and added a financial incentive for maintaining the connected copies of the ledger. Nakamoto’s key development was the invention of mining, that is, allowing people to win coins—bitcoins— by solving mathematical puzzles tied to verifying transactions in a block. It is not the coins, in and of themselves, but the reward for building the chain that supports the tamper resistant decentralization Haber and Stornetta had first imagined."[7]

In 2014, Vitalik Buterin released Ethereum, which allows for tokenization using the fungible ERC-20 code, functioning like cash, and later the ERC-721 non-fungible token, functioning to support digital collectibles.[8] The Ethereum protocol introduced the non-fungible token (NFT) to allow digital assets to remain unique, opposed to Bitcoin, in which all the coins are equivalent and indistinguishable. NFTs allowed for the circulation of limited-edition digital art, registered on the blockchain in the form of an NFT; and thus, crypto art began to emerge.[9] It is important to recognize that although Bitcoin consume more “gas” fees than Ethereum, Ethereum is not entirely carbon-neutral (yet) but is at least working towards a more sustainable model (and already produces less energy than Bitcoin). Ethereum could direct the trajectory of crypto currency to a  healthier model for others to replicate. 

II.II   NFT Market

In 2017, the NFT market was stable until mid 2020, averaging $60,000USD being traded daily.[10] From July 2020 (just a few months after the beginning of the global COVID-19 pandemic) onwards, the NFT market saw exponential growth, with the total amount being traded daily surpassing $10 million as of March 2021 – 150 times more than eight months earlier.[11] The demand for NFTs peaked May 9, 2021, reaching $176 million in sales, down to $8.7 million June 15, 2021.[12] The function of crypto art can be best explained in recent scholarship published by the Massachusetts Institute of Technology in their academic journal Leonardo, published August 2021:

"We describe the crypto art system by first considering the gallery SuperRare, a major cryptoart marketplace. When an artist uploads an artwork to the SuperRare gallery, a transaction is created on the Ethereum blockchain. This transaction creates a nonfungible token (NFT), uniquely associated with the work of art, and transfers the token to the artist’s cryptographic wallet. The transaction is digitally signed by the artist, using asymmetric encryption, in order to prove the authenticity of the work. The token is permanently linked to the artwork and is a one-of-a-kind asset that represents ownership and authenticity of the underlying artwork. The gallery distributes the artwork file over the nodes of the peer-to-peer InterPlanetary File System (IPFS) network. The IPFS network names the image with a code that uniquely matches its content. This means that the same image, even if distributed over several nodes of the network, will always have the same name and will be conceptually identified as a single resource."[13]

The first Non-Fungible Token to sell was Kevin McCoy’s Quantum (Fig. 1), minted May 3, 2014. However, Cryptokitties and Cryptopunks (Fig 2) dominated the NFT market up until July 2020, when the NFT market began to grow.[14] In March 2021, Crypto Art gained huge attention with the sale of artist Beeples’ (Mike Winkelmann) Non-Fungible Token Everyday’s: The First 5000Days (fig 3) for $69.3 million by Christie’s online auction house - the third-highest auction price received by a living artist, after Jeff Koons and David Hockney.[15] It was a collaged image of different pictures he had taken over five thousands days, juxtaposed together into a square. The various images spill onto the digital canvas, folded in a temporal collage of each photograph condensed into one digital piece of art.  Concepts surrounding the age of information, multiple narratives, the Metaverse, and connectivity are reverberated back to the viewer. Even the colours throughout seem to create a dynamic, pulsating effect, like a ripple or a wave – however, the key conclusions is that this artwork has significant meaning in our contemporary period, and therefore has the ability to create a ubiquitous feeling in viewers, manifesting as a structure of feeling opposed to a thought or idea. Therefore, any effort to articulate the significance of this work will be beneficial to reach a greater concession regarding its purpose, and the future meaning and purpose of cryptoart.

III.   Methodology/ Methodological Design

Using qualitative and quantitative data regarding the serious implications of blockchain technology, countered with the significant value and market blockchain has enabled -particularly in the crypto art marketplace and platforms – an introductory analysis regarding the interpretation of crypto art in terms of its social and economic relevance (and future) can be examined. Using historical and bibliographical data to draw a paradigm to identify environmental, economic, and educational evidence concerning NFTs, demonstrates the need for cyrpto art to adopt eco-friendly guidelines going forward.

IV.   Results

The following results expand on why some blockchains consume more energy than others, depending on the model they are running to authenticate transactions. Although Ethereum is more energy conscious than Bitcoin, it is still not the ideal platform to be buying and selling NFTs. It is estimated that just one multi-edition NFT is the equivalent to 260 megawatts per hour, or the same as boiling a kettle 3.5 million times.[16] With this in mind, Ethereum (and other NFT blockchains) have already begun to feel the pressure, especially when newer, eco-friendly NFT marketplaces emerge, such as Voice. Voice is run on the carbon-neutral blockchain EOSI, which requires zero“gas fees,” and furthermore, when an NFT is purchased, many creators donate part of that sale directly to some sort of activist work, such as planting trees, to offset energy consumption. The decision to be completely carbon-neutral seems to encourage artists on this platform to be more eager to support activism within their communities – a reciprocal relationship. On Voice’s website, they state that they are 65,000 times more energy efficient than Bitcoin, and 17,000 times more energy efficient than Ethereum.[17]

IV.I   Proof-of-Work Vs. Proof-of-Stake

Concerns regarding non-fungible tokens and theirsubsequent detrimental effect on the environment have been expressed through mainstream media; however, very little scholarship on the ecological impact of NFTs is available. The reason why NFTs consume so much energy, and therefore leave a massive carbon footprint, is the algorithm known as PoW, or proof-of- work (Fig. 4). The mining process is required for crypto currency due to the lack of any federal oversight, such as a bank, during transfers, deposits, etc. This mining process allows the privacy and secrecy features of cryptocurrency to prevail; however, this mining process requires extensive computational power (proof-of-work), and thus, energy consumption – concerning climate activists globally.[18] The process of mining is to validate transactions on the blockchain, essentially being rewarded a “coin” for the consecutive transactions, becoming a lengthy process. However, the exact amount of energy consumed by NFTs is uncertain, mainly because this currency is designed to be difficult to master or comprehend (it lacks transparency). In 2017 alone, Bitcoin - which uses proof-of-work exclusively - was generating $150,000 worth of electricity each day.[19] Bitcoin generates more energy each year than many countries, including Switzerland, Norway, and Bangladesh (Fig.6):

"Bitcoin's annualized footprint in electricity consumption reached anall-time high in June 2021, nowbelieved to be higher than the power consumption of Finland. This according to a source that tries to estimate the energy consumption of both Bitcoin (BTC) as well as Bitcoin (BTH). It does by assuming that miner costs and income are the same thing: The higher the miner income, the more powerful machinery it can support. Essentially, the source first calculates how much miners earn, then estimates how much of this income is spent on electricity and how much per kWH, to finally be converted into consumption figures. The main reason this figure is an estimate, is due to the decentralized nature of Bitcoin or cryptocurrencies in general: There is no central authority that tracks how many computers there are or where miners submit figures."[20]

In opposition to this, Ethereum utilizes a proof-of-stake and proof-of-work scheme, proving more cost and energy efficient than those working on primarily proof of work. What is unique about proof-of-stake is that not anyone can join, the way anyone can become a miner with proof-of-work and join in on the process.[21] Proof-of-work is initially thought to be more secure than proof-of-stake; however, with a larger pool of users and larger sized experiences, many people prefer proof-of-stake not just due to its energy conservation, but also for network security.[22] Proof-of-stake requires no computational power to solve puzzles because nodes or validators participate in the minting process, which facilitates transactions and creates block on the blockchain. Additionally - there is no money rewarded during the creation process, and there is no money being created, as there is when mining a bitcoin, for instance.[23] Proof-of-stake requires proof of ownership, opposed to proof of puzzle-solving aptitude.[24]

IV.II   Crypto-Colonialism

On the flip side, the uses of blockchain technology goes beyond their use for currency and crypto art. In response to climate change, blockchain technology has adapted to perpetuate “green grabbing,” North-South trade and investment inequalities, and power asymmetry, using data colonialism and surveillance capitalism.[25] Each year, an average of 24 million people are displaced due to climate change, and by 2050, 143 million people across the Global South will become climate refugees.[26] In response, land, natural resources, and data are being traded to offset carbon footprints. People being displaced due to neo-colonial climate change are also facing the consequences of neo-colonial practices which are being deployed to combat the climate change crisis:

"Appropriations of things, including data, are legitimized by a necessity for urgent climate action. Data colonialism or environmental ends combine the extractive practices of historical colonialism with the abstract quantification methods of computing that works at every point in space where people and/or things are attached to everyday communication infrastructures. This mode of colonialism could also be thought of as surveillance capitalism, whereby the territory claimed by climate-minded blockchain projects includes land, labor, and other resources, but also private human experience to be used as “behavioural data” for “prediction products.” Unlike traditional forms of colonialism, data colonialism involves not one center of colonial power (the West), but multiple. These centers include, for example, Facebook, Palantir, Accenture and Microsoft, and these players are seeing extractive opportunities from human migration caused by climate change."[27]

Howson reveals how “crypto-colonialism” is justified through climate crises, and where the blockchain becomes an incubator for neo-colonial practices; nature is becoming increasingly valuable, and purchasing the ownership and protection of natural resources (often in third world countries) is becoming increasingly used, offering people the relief of compensating for the energy intensive labor of mining and trading on the blockchain.[28]  In response to the immense carbon footprint left by the blockchain, carbon credits are being utilized by projects such as Infinite Earths’ Veridium Labs and Athelia, to offset energy consumption.

IV.III   Democratizing NFTs

The full potential for blockchain technology may not be developed for three decades.[29] But why would it take so long, if there is so much discussion around the speed of blockchain technology awareness and usage? It seems that despite its popularity, it will not be considered being at its full potential unless more people become interested, involved, and make an effort to create a more democratic environment. Part of the democracy I have recognized is the tendency for artists making crypto art, that is, digital asset collections online, to pledge for a safer, greener, more transparency online. As multiple narratives begin to enter the blockchain scene, or utilize the blockchain due to its many uses, crypto art seems to be in the vanguard of transitioning to and advocating for greener spaces online.

IV.IV   Ownership Rights Among NFTs

Blockchain technology has paved an entirely new path for artist’s to flourish; prior to NFTs, artists had no way of preventing copies – there was no way for them to authenticate their digital artwork and thus be able to sell to collectors, maintaining and increasing their artworks’ value. Provenance research is a lengthy process, but blockchain technology allows for an easy way to track ownership of artworks, counteracting the lack of documentation, as well as the strenuous process of proving ownership.[30] Listing artwork on the blockchain is not just for newer digital creations and artists, but also for galleries and auction houses to list their collections. The Ebsworth Collection, which sold at Christie’s New York for $318 million, became the first company to list a major auction sale through Artory – a company built on the Ethereum blockchain, offering collectors a certificate of authenticity encoded to the blockchain.[31] The “blockchain air gap,” which links the blockchain listing to the original artwork, is still being refined, where companies are exploring the best way to authenticate artworks, such as physical tagging, DNA analysis, and photographing artwork so it can be recognized similarly as one would recognize a fingerprint.[32] Other companies operating in this space are Verisart and Codex, all working on this main issue of authenticating provenance.

V.   Aesthetic Dimension of Crypto Art

I will refer to cryptoart as an artistic movement, although it is debated as to whether it is a movement or style of art. Perhaps it could be both, whereas the crypto art movement emerged from digital art, an artistic style on its own. Does crypto art fit within a traditional art historical context, or is it something that fits entirely in its own space? For example, it took quite some time before a style considered closely resembling graffiti art, such as Banksy, entered the auction house. Digital artworks such as this have been on the rise since the 1990s- 2000s, but only now, due to the ability of imprinting a unique code on a digital file, has digital artwork finally given artists the ability to flourish in an online environment. The rise of crypto art, in conjunction with the speed of its development, has consequently left traditional art collectors and critics relatively puzzled. However, the analysis and critique of crypto art has yet to be disseminated widely; perhaps art critics, curators, and academics have (like many) been slow to welcome NFTs into the art world. What’s worth thinking about when understanding NFTs as an art critic or curator, is to see how not only are NFTs are copying traditional photography, illustration, and paintings, but how contemporary (tangible) artworks are influenced by the digital effects apparent in so many NFTs. Crypto art will soon be experienced in our own virtual environments, so this other-worldly, sci-fi aesthetic is pronounced in a lot of crypto art. Gems of Resistance – Tanzania, selling for $500.00 USD and released on Voice.com, is not only pioneering in its existence on an eco-friendly platform, but also due to the social activism behind the work. The artist collective, called Ferara, collaborated and created this work to pay respects to those in Tanzania fighting speech oppression.

V.I   Analysis

For future NFT collectors, choosing proof-of-stake schemes over proof-of-work schemes will be critical in the transition to a fully eco-friendly marketplace. The previous results show that proof-of-stake works in conjunction with global climate change goals. Those who support blockchain technology, whether using eco-friendly platforms or not, have the responsibility to fully understand the implications of the technology they use, while being cognizant of the environmental impact due to humans; with this knowledge, artists, buyers, and sellers of NFT’s can begin to develop methods of working against the corruption within. Individuals using blockchain technology should be well-aware of the way it is being used. For example, many people have boycotted Facebook and Instagram due to privacy and security issues, for reasons pertaining to algorithms directed at our younger generation, and the exploitation of personal data.  With more awareness surrounding the way blockchain technology is being used, society can at begin to redirect the trajectory of the future of eco-friendly and ethical practices and values within the systems or structure they participate in.

VI.   Conclusions

In conclusion, CryptoArt is on the rise, with little indication of slowing down. The many benefits of Crypto Art are seen, and therefore, it is worth applying sustainable protocols to the mining process for Crypto Art, particularly Ethereum, to remain relevant. Ethereum also faces competition against other blockchain platforms supporting CryptoArt, and therefore, it should only be a matter of time before either Ethereum is “cancelled,” or if one of the less popular blockchain will emerge, due to their sustainable practices. This paper draws attention to the need for transparency in the realm of the blockchain.

An important variable to consider for those looking at different cryptocurrencies and which cryptocurrency to boycott (if you want to buy and sell), is to look at whether they use a proof- of-work model or a different model to keep the ledger secure, such as proof-of-stake. There are alternatives, like the blockchain flow, and this uses a different model than Ethereum, which does not require verifying transactions by solving complex puzzles (which is where the energy consumption occurs), and consequently would have much smaller carbon footprint. Eco- friendly blockchain platforms deserve more attention, and my hope is that this paper will help disseminate the topic. To prevent the boycotting of future NFT marketplaces, blockchain reform should be considered across all platforms. My hope is that this paper helps to draw attention to those working on democratizing NFTs and encourage mining for social good, rather than just profit. I want to stress the importance of providing context for NFT artists, not undermining their title of an artist, and providing them ample opportunity to share their artistic practice, process, and representations in their work. It is easy to resist thinking about the artist who creates the work, and within this intangible world, it is easy to not provide adequate recognition to artists, which should be thought about mindfully. Providing more info about artists with NFTs, not to forget they are artists worth appreciating still, despite being intangible art, and lastly, everyone can become an art collector and seller easily with NFTs, but not everyone will choose to do so carbon-neutrally.

VII.   Illustrations