Article used: https://www.artprice.com/artmarketinsight/the-art-market-and-the-environment-can-digital-art-be-green
Can Digital Art Be Green?
The COVID-19 pandemic in 2020-2021 led to the abrupt halt of gatherings, prompting art fairs, museums, and galleries to quickly establish online platforms for virtual visits and viewing rooms. Auction houses, facing restrictions and empty rooms, capitalized on their online presence, with varying success based on size, pre-pandemic online development, and location. Rapidly developed and updated websites significantly enhanced virtual exhibitions, offering 3D experiences, numerous interviews, conferences, and ultra-high definition images for detailed artwork inspection. This shift markedly improved the online shopping experience for auction house customers, signaling a substantial advancement towards a future that was already underway.
Artprice's 2020 report highlights the shift to online as the new norm in the art market, accelerated by the COVID-19 pandemic. Before COVID, online bidding was familiar, but the first lockdown led to a surge in online connections, attracting a broader, younger audience. Digital technology enabled year-round sales activity. Despite reducing greenhouse gas emissions, the switch to digital has an ecological impact due to energy consumption. While CO2 emissions from online art transactions are lower than physical auction rooms, players in the art business are increasingly aware of the digital activity's ecological footprint. Art of Change notes that the digital world's carbon impact is projected to be 9% of greenhouse gas emissions by 2025. To address this, some market players are finding strategies, such as choosing web hosts powered by renewables, using eco-friendly search engines, employing dark backgrounds on web pages for energy savings, and utilizing free software. In his film "Coronation," Ai Weiwei lightened its digital weight by using existing images, thus reducing energy consumption. Many accessible initiatives exist to minimize the digital impact on the environment. Additionally, environmental commitment is now a significant factor for potential buyers, especially among younger generations deeply aware of societal and environmental issues in the digital realm.
In 2021, "NFT" was chosen as the Collins English Dictionary's "word of the year," highlighting the phenomenon's popularity. Outsiders from the crypto world, like BEEPLE ($98.5 million), LARVA LABS, and PAK, entered the Top 500 most successful artists by auction turnover, challenging established artists like René Magritte and Henri Matisse. While NFTs made a powerful impact in the art market, questions arose about their environmental cost. Each NFT creation involves transactions, with suggestions that publishing 100 crypto works generates over 10 tons of CO2, surpassing the annual carbon footprint of a person in the European Union. Storing an NFT isn't energy-intensive, but its creation and transfer conditions are. Environmentally conscious NFT buyers should understand blockchain differences to identify the most sustainable networks.
Bitcoin, Ethereum, Monero, and ZCash are some of the more well-known cryptocurrencies. Most NFTs use the Ethereum blockchain for ownership certification. When someone buys an NFT, they use Ether to initiate the transaction, which involves complex mathematical processes validated by miners through the "PoW" (Proof of Work) protocol. Miners compete to solve mathematical problems, with the first successful Miner earning cryptocurrency as their reward. The solution is added to the blockchain, a public ledger of transactions that cannot be reversed. Originally, basic computers could handle this, but the environmental impact has increased due to the rising value of cryptocurrencies. The rapid growth in mining complexity requires powerful computers, consuming significant electricity, often derived from fossil fuels. This, along with the environmental impact of producing such devices, gives NFTs a poor ecological reputation. Sustainability is becoming a critical consideration for the future of the blockchain industry.
In the effort to reduce carbon emissions from the cryptocurrency industry, one approach is shifting to renewable energy sources. In 2021, less than 40% of bitcoins were mined using renewable energy. Startups are exploring solutions, including optimizing mining farms in areas with surplus electricity and turning to renewable sources like hydroelectric and geothermal plants. This move is financially beneficial and helps sell excess energy. Cryptocurrency mining companies can also use state-run carbon credits or buy credits from other firms to offset global emissions or transition to greener energy and sell their credits.
New green cryptocurrencies use protocols to decrease the carbon footprint. Ethereum2 aims to reduce energy consumption by 99.95% by adopting the Proof-of-Stake (PoS) protocol, also used by NFT-oriented cryptocurrencies like Algorand, Cardano, and Solana. This system reduces the risk of fraudulent transactions and optimizes energy use by allowing each machine to work on different problems. Tezos, a rising blockchain for NFTs, uses "Delegated Proof of Stake" (DpoS) where users delegate their currencies to validators.
The world of NFTs, like crypto art, is working on becoming more eco-friendly. Some artists held a charity auction called #CarbonDrop, raising $6.6 million for climate research. The challenge is that these efforts often use platforms like NiftyGateway, which run on Ethereum, contributing to environmental concerns. To address this, #CarbonDrop attached carbon credit NFTs to art NFTs. Now, the crypto-art industry is facing pressure to be more sustainable. The Crypto Climate Accord aims for all blockchains to use renewable energy by 2030 and achieve a net carbon footprint of 0 by 2040. Over 200 companies and individuals in the crypto, energy, and tech sectors have joined this initiative. The upcoming climate conference (COP27) is expected to prioritize sustainable solutions for art e-commerce.
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