CryptoArt and the environmental dilemma
What are KnownOrigin doing about this?
In recent weeks, cryptoart has come under scrutiny due to its impact on the planet and the carbon emissions emitted from the production of NFTs. In this article we want to explore the impact of Cryptoart on carbon emissions and wider sustainability issues, clear up some misconceptions on the subject and explore the solutions KnownOrigin are implementing. We know that CryptoArt and NFTs have an impact on the environment because of its use of the Ethereum network, even if it's not directly the NFTs, and more an issue about blockchain technology.
We have started to implement actions on KnownOrigin to reduce our carbon emissions and are conscientiously exploring actions we can implement in the future. We know that being sustainable does not have an end goal, rather is a continuous work in progress. We strive to reduce our environmental impact as much as possible, as well as champion wider sustainability progress to ensure we leave a positive impact on the planet and our communities.
Why do cryptocurrencies use so much energy?
Ethereum in its current form is based on what many consider to be a legacy technology called proof-of-work (POW).
PoW is the prime reason why the energy consumption of blockchains which utilise the proof-of-work system are so high. Computers around the world compete against each other to find the solution to a simple problem, the goal being to find the answer and win the reward. This provides a financial incentive, which when combined with the growing price of cryptocurrencies, means there are many ‘miners’ (computers) working constantly to gain this reward.
What about ETH 2.0 and Proof-of-Stake?
Ethereum since its inception has always aimed to move away from Proof-of-Work (PoW) and to Proof-of-Stake (PoS). PoS swaps the computational, and energy expenditure, required in a proof-of-work system, to a system which is no longer energy intensive and with a different incentive, risk and reward system. Validators and block proposers in ETH 2.0 are required to “stake” capital in the ETH 2.0 system in order to have the chance of winning this financial incentive. This massively lowers the required energy consumption as it will no longer be based on how many machines you can throw at the problem. Although PoS has taken more time than everyone originally expected due to the complexities of building such a system, once we transition from PoW to PoS in the coming 12–24 months, Ethereum’s carbon footprint is set to fall as much as x100. This will usher in a new and sustainable age of permissionless commerce and computation.
But what about GAS costs for minting and selling NFTs?
GAS is the way Ethereum controls how many transactions fit into each block reward. A block is mined approximately once every 15 seconds. Every single interaction on Ethereum has an associated GAS cost. Storing a 32 byte piece of data for example costs approximately 20,000 GAS. GAS however does not further contribute to the carbon emissions of Ethereum. Miners will still be competing for block rewards, even if all the blocks were empty of transactions. GAS is often used to determine the environmental impact of the network but this has flaws. Regardless of these misconceptions, at KnownOrigin we still believe we have a responsibility to be as GAS efficient as possible when using public infrastructure such as Ethereum. In the next iteration of our contracts we are aiming to be good Ethereum citizens, and will be using as little GAS as possible whilst operating Ethereum mainnet.
Why do we need a Blockchain?
KnownOrigin is a community-oriented digital arts platform. We focus on providing tools to empower artists and collectors to engage with each, to monetise their craft and reap the rewards and relationships embodied between one another. A fundamental shift from the traditional art world.
Historically, digital artists have struggled to monetise their creations, receiving little in compensation and even finding their artwork used without credit, however, the emergence of blockchain technology has levelled the playing field, giving birth to a new movement in art where creators have more control over their art and are able to properly sell and trade their creations.
Collectors are able to freely transact with artists without the limitations of borders, or 3rd parties and unlike with conventional art, when art is re-sold, the original artist is fairly compensated and receives royalties.
Buyers too are benefiting from the space as they can now collect, resell and admire digital art like never before. Amongst other things, embedded within the KnownOrigin platform is the ability to explore new mediums of expression along with the ability to provide perpetual royalties back to the original creatives for life! This is currently set at 12.5% and facilitated at the point of sale.
What wider sustainability goals are KnownOrigin championing?
Without these technologies, these benefits would not be possible. So what does this mean for the world?
As championed by the United Nations (UN), there are 3 pillars of sustainability- environmental, social and economic. The UN Sustainable Development Goals (SDGs) were created in 2015 and are a roadmap to create a world that works for everyone. The SDGs contain 17 goals and all 3 pillars of sustainability are represented. Examples include SDG 4: Quality Education, SDG 8: Decent Work and Economic Growth and SDG 15: Life on Land.
Environmental sustainability tends to be the pillar that gets the most focus, for understandable reasons. However, not only is each pillar as important as each other, but each pillar contributes to and uplifts the progression of the others. For example, accelerating the environmental SDG 13: Climate Action is inseparable from advancing the social SDG 5: Gender Equality, as we know that climate impacts disproportionately affect women the hardest.
Sustainability is something we are passionate about at KnownOrigin. We believe not only does Blockchain advance sustainability, but we are also committed to progressing the SDGs in our own community.
First we want to reiterate that KnownOrigin is a community-led organisation. In contrast to large corporations, we highly value our community and allow opportunities for them to participate in the growth of KnownOrigin. We have held bi-weekly community calls for over 6 months now to get their feedback and guide us on major KnownOrigin decisions. We also keep open communication channels on Discord, with our community of over 5,500 members able to voice their opinions and participate in decision-making at any time they wish. We are passionate about being community-led and progressing the social SDGs that this advances, such as SDG 10: Reduced Inequalities and SDG 17: Partnerships for the Goals.
Through using Blockchain to give creatives agency and ensure they are fairly compensated for their work, we are progressing both the economic and social pillars of sustainability. Supporting creatives to make a career out of CryptoArt advances SDG 1: No Poverty, SDG 8: Decent Work and Economic Growth and SDG 10: Reduced Inequalities, as many artists face socioeconomic barriers to monetising their work. We are championing the social pillar of sustainability through helping new and innovative art forms to flourish.
It is important to us that we share our expertise whenever we can. We regularly do talks for no fee at places such as Blockchain Manchester and Northcoders. We want to encourage and support young people to pursue their passions and we value highly progressing the SDGs relevant to this, such as SDG 4: Quality Education.
What are we doing now?
At KnownOrigin we are passionate about advancing all 3 pillars of sustainability wherever and however we can.
We understand and recognise the problem with Proof-of-Work blockchains. Having been in the space for a good few years it’s often easy for us to overlook this if we focus on the end game of moving to a Proof-of-Stake system. However that does not mean we can’t and won’t do anything about it now.
There are several things we at KnownOrigin are doing to reduce our carbon footprint.
- Streamlining the internal design of a NFT
We have rebuilt our core NFT minting contracts to be about 50% cheaper for our artists and collectors in terms of GAS costings. Now, as mentioned above this is not directly relating to energy consumption but it does mean we will use less blockspace as well as providing cheaper transaction costs to all those who use KO. We hope to have this live within the next 4-6 weeks if all comes back fine from the auditors.
- We are exploring new ways for us to use the blockchain less
In the new version of KnownOrigin’s smart contracts, which is currently being built, we aim to push several things off-chain. This will mean that trading tokens uses less of the network in general, only using it for things which require the level of security and trustlessness such as exchanging value and ownership.
- No open editions
We have always and will always be a platform which offers limited editions of digital art, we can now pledge that we will not do open editions directly on Ethereum mainnet in the future.
- 1 mint per day
Limiting the artist to upload only 1 artwork within a 24 hour period not only helps exposure on artworks and allows the gallery to not be overloaded with new creations, it also reduces our direct impact of minting onchain.
Looking to the future
Sustainability and reducing our carbon emissions in particular is a process. We know that there is always more we can do. As well as the actions we have already implemented, looking to the future we are exploring more ways to reduce our impact on the environment.
- Short term
Ability to donate directly sustainability and climate action charities.
We are implementing a new feature to enable artists, collectors and the KnownOrigin team to be able to donate to Charitable / sustainable causes directly from their KnownOrigin profile. This will give the KO community the option to send ETH to a set of accredited org that are focused on green and sustainable causes. Each month KnownOrigin will donate to these charities using this new feature.
- Medium term
Looking at scalable alternatives such as ImmutableX and Polygon to provide more environmentally friendly settle layers for NFTs created, bought and sold on KnownOrigin. These tools are even younger than Ethereum but they are advancing a pace, we are keeping a close eye on using these possible solutions. We are keeping in constant conversation with an aim to use these solutions as soon as feasible.
- Longer term
Fostering support for ETH 2.0 in anyways we can. We already run a ETH 2.0 validator, putting 32 ETH worth of capital to support its development and participating in the early stages on the ETH 2.0 network. We believe that ETH 2.0 is the endgame and will provide a robust, environmentally friendly and scalable solution to the emerging cryptoart world.
We have seen the rise first hand of digital and cryptoArt, from its humble beginnings into this new emerging creative economy. Although it's important to contextualise this massive industry shift now it is not the time to be complacent, now is the time to actively take steps to help find solutions to reduce its impact on the environment. We must not dismiss its environmental impacts and we have to commit to supporting initiatives that will create a more sustainable future for Crypto artists and the planet.