Mostly one would have brushed aside the NFT mania as yet another bubble humanity has created and will eventually burst in its natural course. Except for two differences – first, in support of NFT, there are some genuinely useful applications of NFTs and the second, a shortcoming – the energy intensity of NFTs. Hence this alarmist piece in the Nautilus by Caleb Scharf, an astrobiologist and the author of “The Ascent of Information: Books, Bits, Genes, Machines, and Life’s Unending Algorithm.”
“In simple terms, just as a cryptocurrency is meant to be infallibly secure and fair, an NFT is a way to assign secure provenance and ownership to a digital asset. That digital asset might be an image, a video, or some hybrid digital experience.
Already there’s been a lot of grumbling about the extraordinary energy demands of cryptocurrencies. Now there’s grumbling about the absurd growth in the market for NFTs. This is because both commodities use a robust system for tamper-proof bookkeeping: the blockchain. Blockchain technology is purposefully burdensome and computationally distributed, making it notoriously energy intensive. Estimates put the energy used to create and trade a cryptocurrency like Bitcoin on a par with the total consumption of a country like Sweden. And that’s without accounting for the environmental footprint of the physical computer hardware.
It’s possible to see a purpose for cryptocurrencies, but NFTs are (for now) almost comically bereft of anything most of us would associate with social or cultural value. Down the line there may be value in attaching permanent ownership or provenance to digital works of art. But at the moment it’s Pudgy Penguins for the masses, or a pixel-heavy version of Nyan Cat going for an eye-watering $1.2 million for cynical investors. With an explosive growth of equally speculative and bewildering offerings appearing every day.
This represents a tangible planetary burden. Prompting the people behind the blockchains to try to improve their environmental image. The company Ethereum (that supports cryptocurrency as well as NFTs) has indicated it aims to cut energy use by more than 99 percent by changing its core methodology. That change will make it possible for aspiring currency “miners” to participate without so much hardware and electricity consumption.
That sounds great but understanding the nature of these changes is not easy, since the whole idea of blockchains is rooted in astonishingly arcane concepts like “proof of work” or “proof of stake” manifested in computer hardware and algorithms. It’s also far from clear that other companies will follow suit, or that the most energy-intensive pieces can ever be fully removed from the scheme without risking the innate reliability that makes the blockchain so appealing in the first place.
The much bigger question, though, has less to do with these emergent upstarts in our informational world and more to do with humanity’s overall trajectory. Any species that endlessly grows, and continually invents energy-hungry processes, may not be destined for a happy ending. At best, such a species will go through boom-and-bust cycles, with big corrective failures. At worst, a species like this simply won’t make it through to the future. NFTs and cryptocurrencies by themselves may not be the cause of a future collapse, but they are symptoms of what ails us. And like all symptoms, they can offer clues to a cure, because the root of the problem may be much deeper—in the fabric of digital information itself.”
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