by Kieran Metcalfe
Posted at 13:51pm on 12th August 2021

I have been vocal over the past few months against NFTs, primarily from an environmental standpoint. I was therefore very interested in Matt Payne's latest podcast episode where he discusses the wider topic with Brynn Schmidt, Alex Nail and Alex Noriega.

I know I have had a very entrenched view, but even so I was keen to hear the sides of the discussion with as much of an open mind as I could.

It did not surprise me that I am most closely aligned with Alex Nail's viewpoint - that now is not the time to get involved with NFTs, especially in the form that they are most commonly understood.

But that didn't mean that I was closed to the nuances in the wider discussion. There are certainly some opportunities for good and ways to approach it that are perhaps helpful.

On reflection, I did feel that some of these arguments were also flawed when considered more widely. But it also gave me a few thoughts on ways we can pull together to start some small changes for the better that, given time, could benefit us all.

So, while this was catalysed by my listening to the episode (and I made a great many notes!) a lot of what follows is my own musing and maybe doesn't refer back to the source material as much as it should!

Are NFTs inherently bad?

No, they're just different.

I'm old enough to remember the appearance of the internet in our daily lives. As it happens, I was studying my Masters in Web Design (although it was called "Worldwide Interactive Systems" back then) so I watched with great interest as 'e-Commerce' became a thing. Something that was once the preserve of specialised folk started to come into the mainstream and, specifically, web addresses began appearing on billboards inviting us to purchase online.

Even with my connections to the sector, it still felt like a big moment and something of a sea change - but now for most of us it's perfectly natural.

NFTs, as a concept, are surely no different. It's a new concept to most of us, taking something we recognise as tangible, and presenting a digital version of it. Right now, that feels an alien concept, but I can see it's very likely something which will evolve and grow over time.

The concept of the 'blockchain' - the ledger, or audit trail which drives cryptocurrencies and NFTs alike - is also a marvellous idea when it comes to bright new possibilities. It is essentially a string of records which cannot be changed without breaking all the records that follow, and they are also not under the complete control of any one group or individual. This combination of security and independence mean that any blockchain is pretty much independent from meddling or manipulation, and that has to be a good thing.

As mentioned in the podcast, banks are looking at how these can be used to safely store financial records etc so there is clearly potential for these platforms - and NFTs are another way in which these record trails are being used.

So what's the fuss about?

The above doesn't talk about anything specific in terms of WHICH blockchain is in use - and there are many. Where the podcast is perhaps unclear (although they are talking high-level admittedly), is a strong initial suggestion that NFTs are solely linked to the Ethereum (ETH) blockchain. This point is clarified briefly later on, with a mention of Tezos, but only quickly. 

The problem with ETH is that it uses a highly energy-intensive method of securing blocks (records) in the chain. For them to have value as a currency requires a mix of factors including desirability and scarcity. The latter is achieved through a method called Proof of Work which forces computers to perform massive calculations to create a block.

ETH is not just NFTs - far from it - but the carbon footprint of the chain as a whole is larger than many countries - energy usage matching that of Israel, and footprint comparable to Myanmar at the last time I checked.

This means that, currently, just the act of creating an NFT on the Etheruem blockchain involves the release of about 65kg CO2. The sale of the NFT generates the same again for every ETH in the sales price.

In the podcast, Matt mentions a conversation he and I had about a calculator site which allows you to trace the CO2 footprint of a user of the ETH blockchain - there are some accounts which over only a few months have racked up multiple Metric Tons of CO2 emissions linked to their transactions.

This for me is the major issue with NFTs in their current form*, and I have not shied away from saying so. It is this point that sticks in the craw for many photographers - the question of how can we say we celebrate the natural world while engaging in a system built on such waste and damage.

(*See alternatives below)

One of the arguments against this eco-view is that the blockchain is moving anyway - the actual energy use is by the computers running the blockchain. It’s then easy to rationalise that all NFTs do is utilise the energy that has been expended, rather than wasting it – a bit like buying a plane ticket as the plane will fly anyway. While simplistic, there is logic there.

I was pleased to hear the discussion take a wider view on this aspect though – in the following section I will dig more deeply into some thoughts on the cause and effect of the growth of ETH, but as the panel pointed out, it is highly interdependent. In a nutshell, the more we use ETH, even indirectly, the more its capacity and consumption will grow. We cannot leech off it without contributing to it.

To put it another way - if enough people want to fly, the airline will charter more flights. The more valuable ETH becomes, driven by activity on the blockchain, the more new computers will be signed up to produce the blocks. Even if we're not part of that end of the process, we add to the demand.

There are also many articles like this one which try to separate the act of minting NFTs from the creation of the ETH blocks themselves. On one hand, they are correct that the act of minting does not *directly* cause the footprint. 

However, this feels like a disingenuous means of accounting. The nature of a blockchain is that once a block is used, it is unchangeable. All data stored is permanently linked and the block cannot be used for anything else. So, once we link an NFT to a block, and reap the benefits of that, surely we also must take ownership of the resources used to create it? And especially, given that cleaner options exist (see below), by using an ETH based platform we are making a deliberate choice to hitch our cart to that use of resources. With our decision comes an obligation - at least morally - to accept that.

The plane analogy can help us here too - if it is permissible to say "the plane flies with or without me, therefore the emissions belong to the airline", why is it that those who DO fly often take steps to offset the impact of their travel? They care because the two cannot be separated. If the transport has a footprint, then we clearly accept, as passengers, a responsibilty for our share when we board, and I feel the same therefore applies to the use of the blockchain.

Is it just an ecological problem?

Not really. As well as scarcity, I mentioned desirability as contributing to the value of a currency.

I've been uneasy about the spiralling prices of ETH (and therefore NFTs) without being able to put my finger on what I found unsettling. At about the 37-minute mark, Matt and Brynn dive into an aspect which made sense to me, and none of the panel could refute.

There is a concerning interdependency and overlap between the creators of ETH, the ETH-NFT platforms (Foundation / OpenSea), and the collectors who are buying the artwork. Specifically, the largest collector on Foundation (Vince / Caktux) lists in his twitter bio that he helped launch the Ethereum cryptocurrency. Is he really giving back to the community, or is he helping inflate the value of his own assets?

As NFTs gain in popularity, ETH grows in value. As ETH grows in value, NFTs gain popularity with creators. It's something of a feedback loop. Given there's fees to pay just to create an NFT, they don't even have to sell to be of use in bumping up the overall ETH value. What's needed is a steady stream of new artwork joining the platform.

As such, the system has now manufactured a gold rush, and likely not a sustainable one (although I'm no economic expert, the .com bubble and 2008 bank crashes are recent enough to give me pause...)

But if the surge carries on, that's no bad thing, right? In a sense, I have nothing against folk who have seen an opportunity and been able to make themselves financially secure (and then some) through it - both NFT artists and the ETH holders too.

But, while I've seen a handful of accounts do exceptionally well, from looking at various artist profiles on Foundation it's clear that these are very much the minority. Instead, I have several contacts with large collections of unsold work.

Especially after the huge financial impact of the lockdowns, the draw of the NFT market for photographers is the possibility of a financial boost - maybe even a life-changing one - and I very much respect that.

But the lure comes with a cost - GAS: the fees you pay to Ethereum to access the blockchain and create your work. This amount does fluctuate with demand but can easily run into hundreds of dollars to get a collection set up - sometimes even that high for a single item - and there's no guarantee of a return. It's the ETH equivalent of your eBay listing fee - but with a bigger energy footprint.

For me, this paints a cynical picture of a lottery system set up to pull in masses of users who will each contribute in the hopes of a pay-out, and hoping they'll overlook the sprialling energy usage it currently relies on.

The primary role of collectors in all this is perhaps not to find great new works and appreciate the artists, but to drive enough hype around the huge selling costs that the system gains critical mass and grows under its own momentum. Maybe I do them a disservice and that's an unintentional consequence, but it's very much the view I have from outside that their motives are not purely altruistic.

The frantic and desperate advertising of NFT collections on social media then draws more users in. No one will advertise their works saying "I paid loads to make this. Help me cover my costs". Rather, it's all worded about how wonderful the opportunities are. It suggests a looming problem for the mental and financial state of those who are enticed to over-committ and don't see the return.

It creates a two-tier system where the struggling artists try to emulate the successful ones, while not getting the traction their work deserves. It's a bleak picture - and maybe it's the same in a traditional marketplace. But there isn't a traditional art marketplace that was set up so much to help drive the value of a currency as this.

Yes, there are other facets to ETH which will also be driving its value, but the ETH-NFT marketplace is a great example of a feedback loop within that system which is doing an excellent job of inflating the value of the currency.

I did ask nonfungible.com (an NFT market tracker site) if they had information on the total number of minted items and the percentage sold. While they said they were working on that feature, they were unable to release any data on it.

Is it really all about money?

No. I don’t think it is. It’s very easy to stand outside and point fingers. And even if artists are looking to make some money, why not!

One of the first supporting arguments I read was that “finally we have a platform where art and photos are given their worth”. I very much appreciate that view. I have been on the receiving end of a great many “Photos for Credit” requests from travel guide companies, and have had images stolen from the internet by large organisations. There is a definite lack of value placed on images in a commercial sense, and the price of NFTs does seem at first to remedy that.

One point about a perceived benefit of NFTs raised by Alex Noriega is the ‘democratisation’ of the platform – that it has the possibility for sellers everywhere to have open access to buyers, as opposed to the traditional access via physical galleries. I can certainly see the thinking behind that.

One fellow twitter user I was chatting to raised a valid point – that presently, the barrier to this is the technology itself. We’re currently at a point where understanding of NFTs is quite low in the community. I suppose that is a temporary roadblock, and that (as with eCommerce in the 90s and 00s) things will improve. But for now, access is stymied by a number of aspects:

  • The terminology of NFTs (Wallets, GAS, ETH, Crypto)
  • The technical knowhow to actually get set up with the above
  • The sheer concept of what it actually is that you’re selling – not a physical item, not even a JPG, but just a certificate of ownership.
  • The financial hurdle of the fees involved.

These barriers will come down in time, but for now I think she is right when she pointed out that social media and our own websites offer a much more accessible marketplace.

There were interesting points made about the value of online community, with recognition that NFT artists have pulled together in support of each other. I’m sure that’s correct, but it’s certainly not a unique thing for NFT folk.

I’ve been on twitter since 2008, but only heavily used it in the last few years. Long before the influx of NFTs I was starting to find my way into a rich and supportive network of like-minded photographers. I find that Twitter, far more than Instagram and Facebook, allows for just chatting with folk. IG is too image-led for random discussion, and Facebook (for me at least) just feels too cluttered.

The recent changes to Instagram and the NFT drive have drawn a huge number of photography folk to Twitter, and I welcome that. However, I strongly suspect that these new folk are seeing the better interaction the platform offers and attributing the sense of community to NFTs rather than Twitter. I feel the same sense without the NFT side, so Twitter is (I think) the actual root there.

And as a counterpoint to this, I do have an additional aspect to bring up here relating to the NFT marketplaces themselves – Foundation especially. If NFT is the great leveller, and these platforms are the best chance for a real and new interaction… why is seller access curated? You either need a limited availability invite from an existing user, or to tout for upvotes to gain enough standing to be able to sell.

The only reason I can see for this is that it generates hype around the platform. Constant requests for upvotes and invites may be as off-putting as the many “New Work Dropped” tweets, but they do their job in piquing the interest of new folk. It plays heavily on our FOMO while also enhancing the exclusivity of the club.

But in all of this, the false and unnecessary exclusivity creates a barrier to the very community and recognition that we artists (NFT or not) are so desperate to find. 

What's the alternative?

So, there's a leviathan of a marketplace that's getting loads of attention and a few people are making a lot of money from it, and in its wake are a many more of out-of-pocket artists and a vast carbon footprint.

It is important to talk about different ways of running a blockchain. The system used by ETH is known as Proof of Work, where it's the Work that consumes energy. The panel do mention the planned move to ETH2 in the future which uses "Proof of Stake" - a 99.8% more efficient system.

As Alex Nail mentions - we could and probably should wait for this to happen. It's probably two years away at best though.

Do we have a choice? That's just it. Yes - there ARE other options.

Tezos, as mentioned in the podcast are one example of a clean, efficient Cryptocurrency and there are many others. There's also a whole list of clean NFT marketplaces, many of which are up and running right now - objkt.com claiming to be one of the largest, and Kalamint.io showing good levels activity.

These platforms have, in some cases, no listing fees, and certainly they do not tend to have the invite-only, exclusive club ethos of Foundation and the other ETH marketplaces. To my mind, that suggests a more open-minded and genuinely community-spirited approach which is refreshing.

There's also HIVE - not just an NFT marketplace, but a whole internet and social media system running on a clean blockchain. There's exciting potential here (although I'm still understanding the full implications).

There is absolutely no barrier to using these platforms instead - except one. There's no financial clout there, and that sadly then becomes a self-fulfilling prophecy.

The more we all rush to follow the piper to Ethereum, the more Ethereum will dominate. If the art and photography community are serious about the environment, we need to stand our ground and either wait for Ethereum to switch to ETH2, or vote with our feet and give our support to these smaller, cleaner platforms.

It means us choosing the longer game - not the quick big buck from ETH-NFTs, but lending our support to grow these smaller systems. If we all did that in the droves that flocked to Foundation and OpenSea, think of the difference it could make. Imagine the day when BitCoin and Ethereum values are knocked off the top spot by a cleanly produced, low energy currency.

But that long game isn't as attractive. There's no quick return, and there's the issue I think, especially for the struggling artists for whom the financial side is a natural motivator. I don't wish to pour scorn on anyone for wanting to feel their work is valued, or who genuinely would benefit from a cash injection.

Maybe though, the weight here falls more with folk like me - ambivalent about NFTs, and with a (touch wood) secure income stream that pays my bills. Perhaps those like me with the benefit of some stability should be the ones to forge ahead on other platforms to bolster their value and make them a more attractive proposition. Wouldn't that be a great community-building move?

Mitigating the impact

I may sound negative in my view of the financial cycles at play. Maybe that's naive of me, but the overriding sense it leaves is that NFT artists are caught in a tug-of-war between a chance (maybe fleeting) to make a life-changing sale, and (if they are aware of it) the Environmental concerns.

I have a lot of respect for honesty with which the panellists expressed their hesitation when faced with this. There's some great discussion towards the end of the episode about how they're dealing with it – although for me, the red flags made me stop whereas others are carrying on with their involvement.

There is a key point made that the high sales value enables them to make sizeable donations to environmental projects - referred to as a Net Positive Impact.  The fact that this huge income allows artists to support green projects is the strongest argument in favour of the current marketplaces. I especially appreciated the need to avoid 'greenwashing' and taking care to properly evaluate the recipients of the donations.

But I have an additional couple of concerns that the podcast didn't dig into.

Firstly, saying that we can donate x% of our income relies on us having that income to start with. Given the low sales conversions may NFT artists are finding, there's a disconnect there for users of Foundation - which is the main marketplace in use. 

What if I mint a load of NFTs but sell none? I've added to the momentum of the ETH blockchain, and put myself personally out of pocket at the same time.

If the plan is to offset with a donation, I strongly feel artists should have the funds to make the donation upfront for each NFT (based on the reserve price perhaps), and then donate more if the piece sells for a higher price. It should be seen as an integral part of the set-up costs, not a bonus for a sale. Otherwise, we're just speculating with the environment as part of the collateral.

I must be fair an mention this is not the case on all ETH marketplaces though - On OpenSea, you can create a collection, where the individual NFTs are only minted at the time of purchase. This delays the impacts until the funds are available. However, while a great idea, it only applies to collections (not single NFTs) and you have to have paid ETH into OpenSea as part of your sign up fees - so there is still an impact to consider up front.

I appreciate that all this adds to the burden on the smaller / new artist, and probably makes it unaffordable. But without that, the calculations fail. Any talk of a Net Positive Impact has to cover the entire collection – indeed our entire footprint (see below) - rather than a single NFT sale.

Secondly - the discussion was still based around the concept of NFT-on-ETH and to my mind there's an even greater advantage to be had if the NFTs were on a cleaner system. Imagine having the ability to make that amount of income, enabling those donations without the impact to start with? By using the cleaner systems above, that could be real possibility if they were helped/allowed to grow to the financial levels of ETH. Maybe that's just a fairy-tale…

Cynically though, I can't escape the fact that cleaner platforms might actually cause a drop in donations. I am sure that if I made a big pile of cash from a clean NFT, I’d feel less compelled to give something back as a necessity – rather it would need to be a personal choice to do so. This creates an almost laughable contradiction that we almost have to damage the environment to guilt ourselves into supporting it.  

Maybe that’s more of a reflection on my own attitudes, and something I will gladly challenge myself on! It’s certainly my biggest reservation about offsetting and greenwashing as mentioned.

The Danger of not Speaking Out

One aspect which I lamented in myself during the podcast was the expression of fear from the NFT artists to mention what they were doing environmentally. They have faced strong accusations of hypocrisy - and I am aware that I have fallen into that trap on occasion. I have enjoyed many long conversations, but in certain cases I know I have let my worries and frustrations drive my tongue and not my ears.

So, here I must offer my apologies for where my attitudes have shut down conversations and promise to do better. Indeed, this post is largely coming from that place.

My thanks go those (Matt, those on the podcast and others) who have reminded me of the need for level-headed conversation. It's something often missing from social media. 280 characters isn't great for making an eloquent point - words get mistyped / misread, tempers flare, and the conversation fails. I've been on both ends of that.

But aside from the stifling of productive debate, we then face a situation where these issues are not openly discussed. The knock-on is the lack of visibility to newcomers of the bigger picture.

As the panel expressed - where an artist has thought long and carefully about their own situation and is acting in a certain way but cannot communicate that out of fear of reprisal, there is a lack of information about that reasoning. Instead the flawed system is presented (unintentionally perhaps) as a utopia. That simply adds to the feedback loop of new folk seeing the wonders of these uplands and the ETH platform maintains its dominance and footprint.

The Wider Challenge

It is worth noting however that inflammatory responses are not unique to the NFT-averse. I have had equally visceral tweets from NFT artists, accusing me of jealousy, FOMO, and just plain hypocrisy.

And to be honest, I can probably claim some aspect of all those accusations, and as a result it has prompted me to look more closely at my own situation. I produced a long thread looking at the impacts of a single outing and minting a single NFT. The figures are now outdated, with best estimates putting the NFT footprint 50% higher again. But even at the time, the CO2 impact of driving and processing the images was a tiny portion of that required for the minting of a single NFT (not to mention that of the sales, GAS fees etc).

There are other aspects we all need to consider - camera production, battery charging, fuel, and many more. Our wider lifestyles must also come under the microscope.

As a result, I particularly resonated with Brynn's point about how she has been challenged in similar ways, and Alex too when he spoke about no longer visiting Patagonia. In a global sense, NFTs are probably small potatoes, and we can all do better in many ways.

No change is easy, no challenge is comfortable - I'm certainly reviewing my own activities because of the current news and NFT issues, and I'll probably talk more about that at another time. It challenges me greatly as to whether I should reduce my definition of acceptable travel amongst other things. While I don't do international travel for photography and stay within about an hour's drive from home, how far is too far? 

If there is one good thing that comes out of this, I would love for it to be us all taking a greater responsibility for our impacts. And I very much point the finger at myself here too. Clearly, I would love to see the NFT marketplace become more focused on sustainability – and sooner than the arrival of ETH2.

But I would repeat my earlier thought: maybe the solution for the damaging dominance of the NFT market is for us to diversify ourselves – to play the longer game and lend our weight to the cleaner platforms to get the ball rolling there.

If we can do this - if the photography community can pull together for change - maybe we can see an end to the division over NFTs that is risking pulling down the community we're all wanting to build.