If you are among the many who have been appalled at the seemingly unstoppable growth of NFTs (or non-fungible tokens) over the past few weeks, you may be forgiven some schadenfreude when it was announced that Mars House, a digital file, has been the subject of a dispute. It was sold for $512,000 (PS360,000) in March.
Let's not forget to mention what was purchased here. Mars House is nothing but a string of zeroes and ones residing on some server. The NFT, however, is not that string. It is simply another string that points to the original, certifying that it is indeed the only one with that exact sequence of ones/zeroes. You can forget about the absurdity of a virtual home selling for half a billion dollars. Mars House is an example of what NFTs can't guarantee. They don't even have the ability to own a digital asset.
One of the most popular fads in this bizarre late-pandemic period is NFTs. They are a buzzword that is generating a lot of attention. It's a digital token created using the same cryptographic protocol used to underwrite currencies like bitcoin. This digital token certifies the uniqueness and authenticity of any image or digital file. The artwork is not being sold on the NFT marketplace. It's a pointer to the artwork, which the buyer has inscribed.
To be considered for this value, artwork must have no other merits - not historical resonance or social relevance, nor aesthetic refinement nor skill in execution. Mars House is your only option. The token's string of numbers is unique in that only you, the buyer, are its sole owner. As the legal battles have shown, even this most basic assertion is subject to shifting sands. This makes Mars House, as all NFTs an infinite zero and a perfect representation for the meaningless churn on which so much of our economy is built.
NFTs are the ultimate solution to artificial scarcity. The NFT frenzy is a convergence of the art market and the bizarrely Ponzi-like dynamics in cryptocurrency trading. Here, enthusiasts openly speak out about their contempt for "bagholders", those who bought in large before the market comes to its senses. This is clearly no problem for an art market, which long ago abandoned the pretense artworks could be a critical mirror to the rest of the world or that they were a special asset class.
However, artists are not rushing to support the NFT market. The problem lies in a fundamental feature of NFTs' operation. Every transaction on the Ethereum blockchain, where most NFTs are recorded at the moment, requires a set of calculations known as proof-of-work. These calculations are designed to consume a lot of energy. All the processors involved with validating proof of work globally use a lot of electricity. This is a serious environmental problem. The New York Times quoted a French artist who was shocked to discover that the "release of six crypto artworks" consumed 10 seconds more electricity in 10 seconds than their entire studio in the previous two years. Elon Musk's large-scale transactions in proof of-work-based Bitcoin have also released more carbon into our atmosphere than all the Teslas had saved in principle.
This brutal calculus may be of little concern to artists who sell their work as NFTs. It is especially absurd to claim that art can inspire ecological consciousness. John Gerrard recently announced an NFT for his video work Western Flag. Gerrard calls it an artwork "flying the flags of our own destruction" that asks us to "consider our role in the warming and desertification of once fertile land." It's almost as if Gerrard or his gallerists had written this statement in crude oil letters a mile apart and set them on fire...a thousand times.
Gerrard's NFT promoters promised that it would have a minimal environmental impact. The sale of regenerate, which is carbon-negative, will offset this. farm, "crypto funds for climate and soil" This is more than a little absurd. Even if all claims about offsets are true, Gerrard’s announcement generated buzz, credibility, and validation. This, in turn, underwrote the market for NFTs. The overwhelming majority of these were not buffered or offset by regeneration. Farm or in any other manner. This kind of sophistry is a reckless disregard for the planet and depraved indifference towards the damage being done.
Twelve years after the launch of bitcoin and six years after Ethereum's introduction as a blockchain that could be programmed to allow NFTs to be issued, many of the promised and revolutionary innovations in technology have yet to come to fruition. The only thing that has happened is a transfer in power from global financial institutions to less responsible actors. Meanwhile, the rest of us are burdened with an environmental impact no one can afford. It is hard to imagine if Western Flag's proud new owner will feel that it was worth it when, not too far from now, coastal cities are drowning and the water from the tap must be boiled before it can be safe to drink. Climate refugees are huddled in tent cities at the horizon.