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To: The Digital Arts Industry

From: Margaret Moore (University of Texas at Dallas), Charles Averill (University of Texas at Dallas), Neal Gandhi (University of Texas at Dallas), and Jeniel Zimmerman (University of Utah)

Art is in the midst of a technological revolution. Non-Fungible Tokens, a method of applying unique values to digital content, have enabled digital artists to sell their work online as never before. This revolution, however, is not a green one, with electricity-guzzling cryptocurrency forming its basis. The industry — and the planet — would benefit greatly from adopting a non-cryptocurrency minting process, as implemented by NFTree.

Background 

Non-Fungible Tokens, or NFTs, serve as digital proofs of ownership, permanently tying a file to a token on a cryptocurrency — typically Ethereum — blockchain, a ledger of transactions that can be used to verify the item’s authenticity. That process, known as “minting”, makes each NFT unique, like a signature from its creator. While anyone can still view the work, owning its NFT grants buyers certain usage and bragging rights, creating the air of exclusivity that has led to its current popularity explosion. NFTs create scarcity: by labeling a digital piece as the original copy, artists are able to ensure the value of the individual work, rather than losing out to the copy/paste function. This empowers monetization in an otherwise difficult-to-protect industry. It also allows creators to insert conditions within the file, such as preventing unauthorized use or paying a cut of resale profits back to the original artist.

Problem Statement

However, the environmental drawbacks of NFTs are massive. Mining, the process by which computers generate currencies like Bitcoin and Etherium, requires enormous amounts of electricity to operate. Most major currencies work via vast networks of computers competing to be the first to guess an encoded number, like solving a puzzle. These puzzles are designed to be inefficient — which secures cryptocurrency generation, but at a high electrical cost. 

Ethereum mining, which shot up with the rise of NFTs that relied on it for encryption, accounts for 14.35 metric tons of CO₂ emissions a year, with the energy of a single trade sufficient to power an average U.S. household for over 2 days. Bitcoin, another cryptocurrency used in transactions, matches Switzerland’s entire carbon footprint. Spikes in energy consumption due to mining have already caused power grid failures, sparking fires, and incurring overload damage. Long-term, cryptocurrency’s energy inefficiency contradicts the fight against fossil fuel consumption, contributing to the larger climate crisis. Ethereum alone uses over 30 billion kilowatt-hours (kWh) a year, estimated at $3.2 billion/year of environmental damage. Notably, that figure does not include non-climate damages, such as health costs incurred by pollution. 

NFTs play a critical role in overall cryptocurrency energy use: the most popular NFT auction houses have put out over 2,000 metric tons of CO₂ total since launch (McDonald). Given the growing concern over the effects of climate change on the global population, curbing NFTs’  environmental footprint is imperative.

Recommendation

A solution to NFTs’ environmental problem is desperately needed. Current proposals fall short in addressing the damage caused by cryptocurrency mining; most simply look to alleviate negative effects rather than stopping them at the source. For example, alternative cryptocurrencies exist that use less energy than Ethereum, but, ultimately, they still rely on mining. As another option, projects like ImpactScope have been launched to offset NFTs’ carbon footprint, encouraging users to donate to international conservation projects, but this still allows carbon emissions to occur. The last option is to abandon non-fungible tokens completely, which risks losing out on a revolutionary advance for digital art. 

However, minting unique signatures for digital content does not inherently require the use of blockchain. While cryptocurrency mining is a method of verifying a piece’s authenticity, it is not the only way. Many platforms verify uniqueness through the use of a Universally Unique Identifier, or UUID. UUIDs have an incredibly high rate of variance, making them a computationally cheap method of generating unique values. Using UUIDs to verify unique signatures would eliminate NFTs’ ecological impact without sacrificing their unique opportunities in e-commerce for both creators and collectors. NFTree would be a platform for the sale of digital art using this UUID system as an alternative minting mechanism, ensuring authenticity without harmful emissions. Future work may focus on audience interactions, improving the auction feature, and adding an “upvoting” feature to improve user experience.

The benefits of adopting non-blockchain minting are numerous. By eschewing the use of cryptocurrency, NFT mining’s demand on power grids — and the resulting ecological harm — is eliminated. Shifting to this model would increase profits for buyers, sellers, and the platforms that host them, too. Take ArtStation for example. The digital art platform sought to sell NFTs on their website, but faced enormous backlash from their user base over environmental concerns, forcing them to abandon the idea entirely. NFTree would allow companies to sell digital art without alienating “green” users — potentially expanding the current market. Going off Ethereum would also eliminate its “gas fees,” lowering the cost of entry for new artists and increasing profit margins for buyers and sellers alike.

Digital art sales would still face issues like fraud prevention that continue to make verifying content creators a pressing concern, which merits further investigation. Shifting away from cryptocurrency may deter some users wary of more stable currency; however, the clear benefits of “going green” outweigh the risks. For every die-hard cryptocurrency fan turned away by the use of new mechanics, there are more of the uninitiated who could have an easier entry into the market by removing both the complexity of blockchains and the fees incurred with Ethereum use, making this a net beneficial move for the industry and environment.

Conclusion

The art world’s technological revolution need not rely on inefficient — and environmentally dangerous — cryptocurrency mining. By implementing a Universally Unique Identifier to authenticate works, the industry can adapt to the future, protect the rights of digital artists, and prevent a significant rise in emissions. Through environmentally-conscious innovations like NFTree, we can ensure a greener and cleaner future in digital art.

References available in full pdf.