In a World that Undervalues Artists and the Environment — Are Overvalued NFTs the Solution?
“If you can’t convince them, confuse them” seems to be the motto of some parts of the tech world nowadays, and it’s almost certainly the case when it comes to NFTs. Few people know what they are, and even fewer people understand why so many seem to be pouring so much money into them. All we know is that a nyan cat meme recently sold for 590,000 USD and weird tweets are attracting bids of over 2 million USD — and that’s just the tip of the iceberg.
A “Tech-Bro Trend” with the Power to Change the World?
First, a brief primer. NFTs, or non-fungible tokens, are a way for people to own digital assets, just like how a collector can own a physical painting. This is done by storing a unit of data on a digital ledger (a blockchain, to be precise, which is essentially a network of transactions shared across an entire network of computers; it’s the same technology that powers bitcoin). This unit of data certifies the digital asset to be unique, and non-interchangeable. Think of it as a certificate verifying that the digital asset is yours.
The emergence of NFTs has shattered cryptocurrency’s reputation as a passé 2017 trend. Thousands of people can own bitcoins at the same time. But only one person can own an NFT at any given point in time, which is verified by the hefty network of transactions that is the blockchain.
The ability to certify something virtual as uniquely yours is rather groundbreaking. The internet exists on the premise that anything can be copied and pasted. If I were artistically inclined, I could make a piece of digital art, upload it online, and suddenly everyone has access to my artwork. If access to digital art is just a quick search and a free download away, why would people pay for it? Contrast this to physical art, where in order to have a Monet, you have to buy the Monet. NFTs give people a chance to buy ownership of a digital asset, just like how people buy paintings.
The fact that people are willing to blow thousands of dollars just to be able to say that they “own” something that is easily accessible by anyone on the internet is sure to raise quite a few eyebrows. However, people do blow similar amounts of money just to own physical artworks that can be viewed for a much cheaper price by visiting a museum. The latter probably makes more sense than buying an NFT since a physical artwork is easier to show off to guests, but still goes to show how the novelty of simply knowing you own something is quite intrinsically valuable to some.
Regardless of why people seem to be so eager to purchase them, arguably the most compelling selling point of NFTs is that they give digital artists a whole new way to monetize their artwork. The current method artists use to raise funds is through platforms like Patreon, where individuals can donate to support their favourite content creators. However, although you can get certain benefits that only donors get through this platform (such as the chance to meet the artist, or exclusive content), ownership of the content stays with the artist. In contrast, purchasing an NFT of your favorite digital artist’s work means that the ownership of the artwork transfers over to you. There’s also the financial incentive of being able to sell the NFT later should someone else decide that they’re dying to buy over ownership of the artwork at a higher price. Successful digital artists could also sell NFTs for works of art that have yet to be produced, and guarantee ownership of the future artwork to the highest bidder. This would function as venture capital for the arts. Artists could also ensure that they get royalty payments for every transfer of their artworks’ NFTs that take place, creating a constant income stream.
The Other Side of the (Bit)coin
The downside of NFTs (and anything that runs on blockchain technology) is their devastating environmental consequences. Maintaining a huge digital ledger requires enormous amounts of computational power and electricity, which greatly contributes to carbon emissions and global warming. For most of 2018, Ethereum mining reportedly used as much electricity as Iceland. A single transaction is estimated to have a footprint of about 35kWh, which is roughly equivalent to the average EU resident’s electricity consumption for four days. Transactions that include NFTs tend to be a lot more complex, so the figure goes up to around 82kWH, more than twice that of the average transaction.
This puts a different perspective on the place that blockchain technology has in our society. It’s easy for the average person to dismiss cryptocurrency as some niche thing that only the rich play with, with no real benefit to anyone. It’s harder to morally position yourself when the technology is bad for the environment, but provides artists a way to monetize their life’s work in a world where free copying and pasting is so easy.
As more individuals become aware of the environmental impacts of cryptoart, artists who sell NFTs have been attracting a lot of criticism. (Perhaps a disproportionate amount of flak in comparison to the average person who buys and sells cryptocurrency, since we have a tendency to be unable to separate art from an artist’s morals and values). Cryptoart enthusiasts are trying to find ways to push back against this criticism, usually starting by supporting the movement from the proof of work algorithm that most blockchains run on, to proof of stake, a less computationally intensive algorithm that Ethereum is currently testing out. Some allegedly carbon-neutral blockchains run on similar algorithms, claiming to release just 0.01% of bitcoin’s emissions.
Are NFTs Really the Holy Grail for Artists?
Perhaps it is possible for cryptoart to be environmentally sustainable in the future — but the jury’s still out on that. In the meantime, the question we must ask ourselves is: is holding on to the current ecologically destructive state of cryptoart even worth it? Would it truly bring any good for the arts community? As many environmentalists put it, “we truly don’t have time to wait.”
When Ronnie Chieng interviewed Beeple (a digital artist who made millions through selling cryptoart) on the Daily Show, he responded to pictures of Beeple’s artwork by saying the following:
“I don’t know much about art… but that looks like something that someone who knows about art would say is… not art.”
To which Beeple responded, “err… yeah.”
This exchange is pretty symptomatic of the problem with the cryptoart scene — the artwork can be rather sensationalist, not very tasteful, and as New York Magazine art critic Jerry Saltz puts it, “stupid cartoonish unoriginal bro high school blah.” This sweeping comment may not apply to all cryptoart out there, but it is unfortunately representative of the artwork that we’ve seen raise millions of dollars through the sale of NFTs.
That’s not because all digital artists produce bad art, but more likely because the people that currently demand cryptoart are of a different demographic than art collectors who value artistic skill in a more traditional sense. Perhaps the reputation of cryptoart has already been tainted by these sensationalist artworks in the eyes of art collectors, and the only ones entering the market currently are tech fanatics looking to hop on the crypto craze. Perhaps most art collectors still struggle to wrap their head around the true value of an NFT; there’s just something different about having a network of transactions that stipulate that you own a piece of digital art, versus being able to hang a one-of-a-kind painting in your house.
This leaves the demand for cryptoart in the hands of individuals who aren’t art critics (to put it nicely), which is probably why a lot of the cryptoart that has made the news is either made by famous people (e.g. Grimes) or downright wacky creations made by those who got lucky. This is not to say that the physical art collecting world doesn’t experience extreme surges in the demand of artworks for reasons apart from artistic value, but the introduction of NFTs could exacerbate the trend of individuals buying art at ridiculous prices simply for novelty and shock value, as opposed to true art appreciation. Moreover, when it comes to the impact that cryptoart has on the art community, it’s important to note that there is no existing safeguard for copyright when it comes to NFTs; artists have seen their work get minted and sold without their permission.
It’s hard to make any solid conclusions about the trajectory of the cryptoart scene, but if it is true that the demand for art NFTs is driven by individuals just hoping to catch a trend, then it probably wouldn’t benefit a lot of artists in the way that crypto enthusiasts claim it would. Perhaps the demand will drag on, and individuals who are demanding these seriously avant-garde artworks right now will continue to demand these artworks. But even that would probably be a very niche bubble down the road, which wouldn’t have the far-reaching positive impacts that tech enthusiasts dream of.
At least for now, it’s a small bubble, but a small bubble that uses a disproportionately gargantuan amount of electricity nonetheless.
Published exclusively in the Brown Technology Review.
