non-fungible tokens – Close Read

The Frida Kahlo NFT

Like a Phoenix rising from its ashes, Art is reborn into Eternity.
fridanft.org

In July this year, a Mexican businessman named Martin Mobarak allegedly destroyed a painting by Frida Kahlo in order to liberate it from its physical shackles and unto its “eternal” existence henceforth as an NFT that he is selling for $4,000 apiece. He has said the money will go to charity, but it’s hard to understand how that is relevant considering what has (allegedly) been lost. Art these days is not entirely art: at least a part of its purpose has been subverted by cryptocurrencies into an object for proponents of this technology to con. Also, a fundamental tenet of the NFTs market is that scarcity is always better. Put these things together and you realise Mobarak’s actions were a matter of when, not if. However, the intersection of NFT-centric thinking with the art world has been and continues to be complicated.

In 2021, an artist named Beeple sold a collage of images he’d crafted and pieced together to a cryptocurrency entrepreneur named Metakovan for tokens worth $69 million. Metakovan, and his partner Twobadour, had said at the time that they were democratising art by enabling the cryptocurrency-based public ownership of works of art and by taking advantage of cryptocurrencies’ opportunities to allow non-white, non-western people to acquire high-valued art. It was a poorly conceived proposition in many ways – starting from the fact that the acquisition was a façade for Metakovan to inflate the value of the tokens he owned and going up to the fact that the $69-million moment did everything to uphold the links between art and modern capitalism instead of critiquing them (forget tearing them down).

Fast-forward to Martin Mobarak’s (alleged) destruction of ‘Fantasmones Siniestros’ and the contradictions abound. Contrary to Metakovan’s aspiration to democratise anything, even in principle, Mobarak’s (alleged) action epitomises the private ownership of art – outside history itself, isolated in one’s personal collection and thus – by the premium American logic of private ownership – at the unquestionable mercy of its proprietor, who may even choose to burn it without regard for its thingness as a historical-cultural-political object. In both cases, and the thousands of other instances in which NFT-makers have either championed the cause of paying artists or conceived art of their own, this human endeavour has been far removed from its telos of critiquing capitalist society and has become a commodity per se.

But while this is the long- and well-known effect of capitalism on art, the (alleged) destruction of ‘Fantasmones Siniestros’ also confronts us with a tense three-way contest. On vertex 1: The painting is Kahlo’s and is as such an important part of Mexico’s past, heritage and the aspirations of its people through the ages. On vertex 2: The headlines of most news reports, if not all, make sure to mention that the painting was worth $10 million, in a reminder of its monetary value de facto and the place of art by influential artists as an important bourgeois value-store de jure. And on vertex 3: No matter the legerdemain of businesspeople, NFTs will always and eventually ensure the complete commodification of art, thanks to their foundational premise.

The only thing worth prizing here is that on vertex 1: Kahlo’s work, inasmuch as it captures her spirit and anima and is a reminder of what she did, when and amidst whom. But vertices 2 and 3 seem to hold the means by which this preservation has been achieved before and will be achieved in future, and together prompt us to pay more attention to the delicate strands by which the memories of our pasts dangle. We still await the public ownership of the work of important artists, and many others, but anyone who says cryptocurrencies or blockchains are the way to get there is lying.

A similar problem has assailed the world of scientific knowledge and publishing for many years now, with more scientists becoming more aware today of their actual role in society: not to create new knowledge and improve lives as much as to widen the margins of scientific journals, overlook their glaring flaws and the incentives they have set up to the detriment of good science, and comply unquestioningly with their inexplicable price hikes. And even as many scientists have invented notions like “prestige” and “status” to make their allegiance to journals make sense, Mobarak et al. tell us, and themselves, that they’re doing everyone a favour.

Intro to NFTs

First

I wrote this piece for a friend who wanted to understand what NFTs were. I have considerably simplified many points and omitted many others to keep the explanation below (relatively) short. If you’re interested, you can read the following articles/sites as well as find links to more discussion on this topic from there.

https://digiconomist.net/bitcoin-versus-gold
https://rpr2.wordpress.com/tag/nft/
https://blog.dshr.org/2022/02/ee380-talk.html (I left out talking about scammers – this post has great explanations and additional learning resources on this front)
https://caesuramag.org/posts/laurie-rojas-why-no-good-nft-yet

Background info

What is an NFT?

To understand NFTs, we need to understand the ‘T’ first: tokens.

And to understand the Ts, we need to understand the reason they exist: the blockchain.

The blockchain is widely touted to be a ledger of transactions. But I – a person who has struggled to understand banking and finance terminologies – have found it more useful to understand this technology in terms of the fundamentally new thing it facilitates.

In ‘conventional’ banking, banks – state-owned and otherwise – validate financial transactions. If I transfer money from my wallet to yours online, the bank knows a) whether money has been deducted from my wallet, b) whether money has been credited to your wallet, and c) whether I, the wallet’s owner, performed the transaction in question.

The blockchain is a database that, together with a bunch of algorithms, offers a way to perform these tasks without requiring a centralised authority. Instead, it helps the people who are transacting with each other to ensure the security and integrity of their transactions.

Say 10 people have already been using a blockchain to validate their transactions. Each row in this database is called a block. When one of the 10 performs a new transaction, it is added as a new block in the database along with some data pertaining to the previous block. This bit of data is called a cryptographic hash. Using the hash, all the blocks in the database are linked together: every new block contains a cryptographic hash of the previous block, all the way back to the very first block. This chain of blocks is called the blockchain.

Every time a new transaction is performed, and a new block has to be added to the blockchain, some algorithms kick in to validate the transaction. Once it has been validated, the block is added, a timestamp is affixed to the operation, and a copy of the blockchain in that instance is shared with all the 10 people using it.

This validation process doesn’t happen in a vacuum. You need computing power to perform it, drawn from the machines owned and operated by some or all of the 10 people. To incentivise these people to donate their computing power, the blockchain releases some files at periodic intervals. These files denote value on the blockchain, and the people who get them can use them gainfully. These files are called tokens.

Different blockchains have different validation incentives. For example, the bitcoin blockchain releases its tokens, the bitcoins, as rewards to those who have provided computing power to validate new transactions.

The bitcoin protocol states that the number of bitcoins released drops by half for every 210,000 blocks added. In May 2020, this reward stood at 6.25 bitcoins per block. The blockchain will also stop releasing new bitcoins once it has released 21 million of them.

Technically speaking, both centralised and decentralised validation systems use blockchains. The one that uses a central authority is called a permissioned blockchain. The one without a centralised authority is called a permissionless blockchain.

This is useful to know if only to understand two things:

The concept of blockchains has existed since the early 1980s in the form of permissioned systems, and
Permissionless blockchains need tokens to incentivise users to share computing power whereas permissioned blockchains don’t need tokens

The demand for bitcoins has caused the price of each such token to rise to $43,925, or Rs 33.47 lakh, today (March 25, 2022, 9:06 am).

The tokens on a blockchain can be fungible or non-fungible. An example of a fungible token is bona fide currency: one one-rupee note can be replaced by another (equally legitimate) one-rupee note and not make any difference to a transaction. Bitcoins are also fungible tokens for the same reason. On the other hand, NFTs are tokens that can’t be interchanged. Each NFT is unique – it has to be because this characteristic defines NFTs. They are non-fungible tokens.

Bitcoins are basically files. You write an article and store it as a docx file. This file contains text. A bitcoin is a file that contains alphanumeric data and is stored in a certain way. You can save a docx file on your laptop’s hard-disk or on Google Drive, and you can only open it with software that can read docx files. Similarly, you can store bitcoins in wallets on the internet, and they can be ‘read’ only by special software that work with blockchains.

Similarly, NFTs are also files. The alphanumeric code they contain are linked in a unique way to another file. These other files can be pictures, videos, docx files, bits of text, anything at all that can be stored as digital data.

When one person transfers an NFT to another person over a blockchain, they are basically transferring ownsership of the file to which the NFT is linked. Put another way, NFTs facilitate the trade of goods and value that can’t directly be traded over blockchains by tokenising these goods/value. This is what NFTs fundamentally offer.

Emergent facts

This background info leads to some implications:

Bitcoins have been exploding in value because a) their supply is limited, b) investors in bitcoins and/or blockchain technology have built hype around this technology, and c) taken together, the rising value of each bitcoin has encouraged the rise of many Ponzi schemes that require more people to get in on cryptocurrencies, forcing demand to rise, which further pushes up the coin value, allowing investors to buy low and sell high.
The demand for bitcoins, and other cryptocurrencies more broadly, has obscured the fact that a) permissionless blockchains need tokens to exist, b) these tokens in turn need to be convertable to bona fide currencies, and c) there needs to be speculative valuation of these tokens in order for their value over time to increase. Otherwise, the tokens hold no value – especially to pay for the real-world costs of computing power.
This computing power is very costly. It is highly energy-intensive – if it weren’t, anybody could validate any transaction and add it to the blockchain. In fact, one of the purposes of the compute cost is to prevent a hack called the Sybil attack. A copy of the blockchain is shared with all members participating in the chain. Say my copy gets corrupted for some reason; when the system encounters it, it will check it against the copy that exists on the majority of computers on the network. When it doesn’t match, I will have forked out of the blockchain and no longer be a part of it. A Sybil attack happens when multiple users work together to modify their copies of the blockchain (to, say, give themselves more money), confusing the system into believing the corrupted version is the actual version. A high computing power demand would ensure that the cost of mounting a Sybil attack is higher than the benefits it will reap. This power is also what leads to the cryptocurrencies’ enormous carbon footprint.
If you provide more computing power to the pool of power available to validate transactions, you have provided the system with proof of work. Another way to validate transactions is through proof of stake: the more value you have transacted using the blockchain, the more stake you are said to have in its proper operation, and therefore the likelier it will be for your transactions to be validated. Proof of stake is less energy-intensive, but its flaw is that it’s a ‘rich get richer’ paradigm. From a social justice point of view, both proof of work and proof of stake have the same outcome: wealth inequality. Indeed, a principal failing of the ethereum and bitcoin blockchains today is that a very small number of individuals around the world own more than half of all the computing power available to these networks – a fact that directly undermines the existential purpose of these networks: decentralisation.
NFTs differ in their uniqueness, but other than that, they also require the use of blockchains and thus inherit all of the problems of permissionless blockchains.
NFTs also have two problems that are specific to their character: a) they have to be scarce in order to be valuable, and this scarcity is artificially imposed – by investors but more broadly by tech-bros and their capitalist culture, in order to keep NFTs exclusive and valuable; b) the items that NFTs currently tokenise are simple crap made with conventional software. For example, the user named Metakovan purchased last year an NFT associated with a big collage by an artist named Tweeple for 500 ether ($69 million). This collage was just a collage, nothing special, made with Photoshop (or similar). Now, if I uploaded an image on a server and linked it to an NFT, and one day the server goes down, the NFT will exist but it will point to nothing, and thus be useless. This vacuity at the heart of NFTs – that they contain no value of their own and that whatever value they contain is often rooted in conventional systems – is emblematic of a bigger issue with cryptocurrencies: they have no known application. They are a solution in search of a problem.
For example, Metakovan said last year that using cryptocurrencies to trade in art was a way to use the anonymity afforded by cryptocurrencies to evade the gatekeepers of the art world, who, in his words, had thus far kept out the non-white, non-rich from owning the masters’ paintings. But many, many art critics have ridiculed this. I like to quote Laurie Rojas: “Even with all the financial speculation around NFTs, the point that Art’s value is determined within the parameters of a society in which commodification is the dominant form of social relations (i.e., capitalism) has too easily been abandoned for poorly defined neologisms. … NFTs are the latest phenomenon to express this.”
NFTs’ newfound association with artistic works is something for NFTs to do, otherwise they have no purpose. In addition, small-time and/or indie artists have criticised NFTs because they don’t solve the more fundamental problem of people not funding artists like them or protecting their work from copyright violations in the first place – much less because potential funders don’t have the requisite technologies. This criticism also speaks to the criticism of the bitcoin network itself: to quote Alex De Vries, “One bitcoin transaction requires … several thousands of times more than what’s required by traditional payment systems” to perform a transaction of the same value. Therefore it can’t be a functional substitute for the world’s existing banking system either. And we’ve seen in a previous point that they’re not decentralised either.

Two last issues – one about a new way in which blockchain tech is trying to find relevance and one about a pernicious justification to allow this technology to persist.

The first is what has come to be called “web3”. The current iteration of our web is known as web2, supposed to have begun around the mid-2000s. Web1 was the first iteration, when the web was full of websites that offered content for us to consume. Web2 was about content production – social media, blogs, news sites, etc. Web3 is supposed to be about participation – based on Metakovan’s logic. In this paradigm, web3 is to be powered by blockchains. This is a stupid idea for all the reasons permissionless blockchains and NFTs are stupid ideas, and others besides.
Second, some entrepreneurs have started to buy carbon credits from various parts of the world and offer them for a price to blockchain entrepreneurs, to help ‘neutralise’ the carbon footprint of the latter’s efforts. This is wrong and evil because it’s a wasteful use of carbon credits that diverts them away from more socially responsible uses. It’s also evil because, in this paradigm, cryptocurrencies and NFTs foster two paths towards greater inequality. First, as mentioned before, they impose a prohibitive energy cost to use them. Second, developed countries need to cut down on their carbon emissions right away – but many developing countries and most under-developed countries (in the economic sense) still have room to emit some more before they can peak. Carbon credits, the demand for which cryptocurrencies are increasing, reverse these outcomes – allowing the former to keep emitting while purchasing ‘room to emit’ from less developed nations, and thus lowering the latter’s emissions ceiling.
Finally, a fundamental flaw of the carbon credits system is that it assumes that emissions over one part of the world can be compensated by supporting forests in another. So carbon credits may in fact make the problem worse by allowing cryptocurrency folks to keep kicking the can down the road.

Art is something for cryptocurrencies to con

Joe Dunthorne penned an amusing article in London Review earlier this month about encountering a fake account of him on Instagram, whose user promoted the real Dunthorne’s poems and book. Dunthorne begins by citing Fyodor Dostoevsky’s The Double, in which a doppelgänger usurps the life of a nondescript young man named Yakov Golyadkin by taking over his life and social circles. The original is eventually confined to an asylum because everyone in his life, such as it was, prefers the new fellow.

Dunthorne himself quests for the identity of the person impersonating him, only to find, through many twists and turns, that it is a guy who constantly changes his identity as he goes about scamming people to invest in cryptocurrencies by posing as someone whose work doesn’t directly involve these digital entities in the first place.

It’s a fascinating con – although not the one Dunthorne may believe it is, as he writes: “Then there was the one where scammers tricked people into investing $2.7 million in cartoons of apes. In fact, this was a double scam, convincing buyers first that the images were timeless works of digital art and then that they should pay huge amounts of money to an organisation that didn’t exist.” Dismissing these investments because they’re directed at companies that “don’t exist” in the physical realm is naïve. Nonetheless, while Dunthorne ponders if a random stranger has done a Yakov Golyadkin on him, there is a con here – one that brings to mind a post by a user named kevbrinx on Tumblr:

Tumblr is known for being a place where creativity happens because it’s cool, it’s fun, it’s different and difficult! “I will make it because I can”.
The majority of NFT artists I’ve seen don’t share the same mentality. And that is worrying.
I’m sure out there are many works of art that aren’t made by a computer and have been created with the intention to inspire. However, just like it has been demonstrated on Twitter, who buys wouldn’t do it just to showcase their precious possessions?
Where is the value in that?
It might be not what NFTs have been created for originally, but right now they represent vanity and greed to many. Expecially when there are other safer ways to support artists economically.
…
“The focus of NFTs is not actually the art”.

The post is addressed to Matt Mullenweg, the cofounder of WordPress. Mullenweg’s response is ambiguous, noncomittal:

The list of things to do before we got to anything NFT-related is super-duper long. I don’t share all your worries about NFTs, but I am not fanboying them. The only NFTs I hold myself right now are Wapuu related: https://web3wp.com/

If Mullenweg doesn’t see the problem that already exists, he’s not going to solve it.

Cryptocurrencies have emerged as a (disagreeable) way to fund art, and therefore supposedly support artists, using the Trojan horse of NFTs. (For a detailed yet accessible detailed explanation of this concept, see here.) Dunthorne’s story illustrates that cryptocurrency evangelists – including scammers – are looking for ways to promote it without letting their prospects be tainted by the conflict of interest of how much they have to gain: lots of money, and the advantage of being invisible to law enforcement – in exchange for allowing struggling artists to enter the cool cryptocurrencies circuit.

But what Dunthorne leaves unsaid is that the modus operandus of his scammer is indistinguishable from those who claim they’re legitimately supporting artists by trading their work using cryptocurrencies and NFTs.

Separating the item in question from the value of it that’s being traded may seem virtuous, but it’s really the essence of the scam: art becomes another financial asset, one that the rich and the powerful are already familiar with. Art here is being used to give cryptocurrencies something to do, and to look any bit respectable while doing it. But breaking into this art-trading system only legitimises the rituals of the moneyed and renders art, and its makers, inseparable from their limited representation in the plutosphere.

The purpose is money, and profiteering, not the art itself or the issues embedded therein. The antics of the cryptocurrency-proponent Metakovan last year, buying an NFT of a collage of pictures for $69 million, popularised the concept and set this ship sailing, but in his case itself, as I wrote:

Metakovan’s move was ostensibly about getting the world’s attention and making it think about racism in, for some reason, art patronage. And it seems opportunistic more than anything else, a “shot fired” to be able to improve one’s own opportunities for profit in the crypto space instead of undermining the structural racism and bigotry embedded in the whole enterprise. This is a system which owes part of its current success to the existence of social and economic inequalities, which has laboured over the last few decades to exploit cheap labour and poor governance in other, historically beleaguered parts of the world to entrench technocracy and scientism over democracy and public accountability.

To quote Rosanna McLaughlin of The White Review:

The most shocking aspect of the NFT to the art intelligentsia is its brazen entanglement with finance. Trading art has always been a pastime of the wealthy. Much of what counts for art history consists of flattering portrayals of the rich and powerful, and artists have long been expected to perform what Tom Wolfe called the Art Mating Ritual – attracting the interest of wealthy patrons and conservative institutions, while simultaneously presenting as Bohemians and renegades. Yet with the NFT, the distinction between art and asset seems to have disappeared. In place of the curated exhibition is the auction website; symbols of the market have seeped into the aesthetic language of the art itself. Prices, not ideas, dominate.
Despite the promise of “art for everyone”, the final destination of the NFT might not actually be art. Art may simply be a useful way to advertise the possibilities of a new technology. “I’ve done everything from fashion, fragrances to endorsements,” Paris Hilton says, adding that NFTs are another way for “fans to have a piece of me”. As well as working with the rapper Ice Cube, Jones recently made an NFT for the whisky company Macallan, to be auctioned alongside a very expensive cask of scotch. This, it seems, is a taste of where NFTs may be heading: not a radical new model for trading art, but a digital marketing bauble.

Anil Dash, the CEO of Glitch:

Meanwhile, most of the start-ups and platforms used to sell NFTs today are no more innovative than any random website selling posters. Many of the works being sold as NFTs aren’t digital artworks at all; they’re just digital pictures of works created in conventional media.
…
There’s only one exception to the lack of interest in blockchain apps today: apps for trading cryptocurrencies themselves. What results is an almost hermetically sealed economy, whose currencies exist only to be traded and become derivatives of themselves. If you squint, it looks like an absurd art project.
After a decade of whiplash-inducing changes in valuation, billions of dollars are now invested in cryptocurrencies, and the people who have made those bets can’t cash in their chips anywhere. They can’t buy real estate with cryptocurrency. They can’t buy yachts with it. So the only rich-person hobby they can partake in with their cryptowealth is buying art. And in this art market, no one is obligated to have any taste or judgment about art itself. If NFT prices suddenly plunge, these investors will try buying polo horses or Davos tickets with cryptocurrencies instead. Think of a kid who’s spent the day playing Skee-Ball and now has a whole lot of tickets to spend. Every toy looks enticing. NFTs have become just such a plaything.

Finally, Laurie Rojas, cofounding editor of Caesura, on the inevitability of NFTs because of art’s foregone relationship with capitalism:

Commentators, however, actively neglect the lesson learned since the late ’60s that trying to escape art’s commodification is futile, or merely a pretense, and rarely reflect on the artwork’s connection to capitalist social relations. The connection between these two tendencies — that art’s value is determined/critiqued by commodity “fetishism” or that art’s value is determined/critiqued by socio-political position-taking — is deeper than it appears at first glance. These “critical” tendencies express how much Art has become caught between being an end in itself and a means to an end. NFTs are the latest phenomenon to express this.
Even with all the financial speculation around NFTs, the point that Art’s value is determined within the parameters of a society in which commodification is the dominant form of social relations (i.e., capitalism) has too easily been abandoned for poorly defined neologisms. Rarely is there a reflection on the relation of the artwork — its form, technique, beauty, contemplativeness, incomprehensibility, and what have you — to the increasingly barbaric commodity form.
Has the art world gone mad? No. This is business as usual.

Featured image credit: Karolina Grabowska/Pexels.

If WordPress supports NFTs, should I boycott it?

I’m a blogger, an amateur coder and an employee at a nonprofit organisation. My experience in these realms of endeavour is such that, taken together, keeping my blog online means a) using a trustworthy web host, b) using a simple as well as moderately featureful content management system, c) achieving this at a reasonable monthly cost, and d) not having to spend any time whatsoever thinking about the setup’s availability or security. Currently WordPress.com is fulfilling (a), (b), (c) and (d).

The next best alternative is a shared host offering WordPress hosting followed by a VPS managed through a control panel and with WordPress. If I drop WordPress, the options available to me dwindle rapidly. There’s Ghost, of course, but not much else. There are very many content management systems out there but the vast majority don’t have an option to import WordPress posts and also have either fewer features or too many for my limited programming chops to handle.

(I should stress here the extent to which I’m out of sorts in this area. I don’t understand all the differences between cloud hosting and VPS hosting. I kinda know what shared hosting is but I don’t know why its problems don’t assail other forms of hosting. It took me years to get the hang of static-site generators and what web-servers really do. I barely get Docker now and have no frigging idea what Kubernetes is or does. My sense of what is good is simply some better-informed people’s sense of good.)

In this scenario, can I afford to boycott all platforms and services that are interested in, or whose leaders are interested in, incorporating NFTs into their products?

The answer I think is a distinct and discomfiting ‘no’. WordPress cofounder Matt Mullenweg is pro-NFTs, as are Ghost’s John O’Nolan, Twitter’s Jack Dorsey, Reddit’s Alexis Ohanian, Salesforce’s Marc Benioff, Twitch’s Justin Kan, as well as Microsoft, Google, Amazon Web Services, Akamai (for blockchain in finance) and many, many others. Hosting companies like Amazon Web Services and Digital Ocean ban the use of their services to mine cryptocurrencies, but I doubt they will assume a similarly hardline position against the storage of NFTs.

When you’re interested in boycotting the work of people who favour the use of a technology you distrust and dislike, but then find yourself having boycotted every platform, service and/or product you’ve needed and/or admired thus far, what do you do?

This conundrum is largely already real. Many of our internet-based tools today are the brainchildren of people and companies operating primarily out of that American white Democratic libertarian tech space (although I’m bearing in mind only the worst of this group here, principally Zuckerberg). I really like my smartphone but I have many problems with the practices of the company that made it. The same thing goes for my laptop, Kindle, debit card, WhatsApp account, Fire Stick, a vision-impaired aunt’s voice-activated phone, my neighbour’s electric scooter, etc.

My (first) point is that a certain geographically restricted demographic has monopolised innovation in the information technology sector worldwide. As a result, the best tools we have available to use (in this category) to do the work we’d like to do are often made by people and companies doing other technological things with which we’re often likely to disagree yet from which we can’t ever fully divest ourselves, and whose products we can’t readily replace with those of alternative provenance either.

At the same time the builders of these tools have accrued more decision-making power than the tools’ users, the result of which is that – for one example – we’re all contemplating the possibility of a “web3” erected on blockchain technology even though the population of people interested in that future is eminently minuscule. Another is that WordPress powers 43% of all websites on the web while Mullenweg has the single-most say on whether this mass will one day became NFT-friendly.

The second point is that of quality and scale, which taken together ensure a good user experience at a relatively low (monetary) cost. For example, if the best American cloud-hosting companies today start to offer pro-NFT services, my hosting options will suddenly be limited to Asian competitors with shady business practices and pricier European ones that, while being better with user privacy and such, also charge more as a result. (I’m neither aware of nor know how to evaluate hosting companies in other parts of the world). I get the philosophy of “either pay or be the product”, but here’s the thing: I work in journalism in India and don’t have much money to spare, not to mention neither the time nor the inclination to spend becoming a better technologist.

The third and final point is about the act of boycotting itself. Why has it been meaningful? It has been meaningful because it has had the power to force managers to change their minds in favour of consumers’ demands. Would it be as meaningful as it has been before to boycott WordPress or Twitter or Google? No, because boycotting does not have that power against companies whose breadth of innovation is so diverse that they build the tools with which to organise protests against tree-cutting as well as – to slip into a metaphor here – manufacture the axes with which they will be cut.

At this point, a quote from Elementary (2:21), the TV show on Amazon Prime – another behemoth, wouldn’t you say? – comes to mind: “Piffle. They want an army of drones keeping tabs on all of us.” Since when do you care about other people’s privacy? someone else asks. “I make use of the tools available to me. That doesn’t mean to say I have to applaud every advance in the field.”

I suppose this is my conclusion… for now. I think this will allow me to continue to use WordPress while retaining the moral authority to criticise Mullenweg’s support for, or even his equivocation on, NFTs… for now.

Crypto: Climate change means new tech has less time today to prove itself

I spent this weekend reading about permissioned and permissionless blockchain systems. If you want to get in on it, I can’t recommend this post by David Rosenthal enough. Much of the complexity of executing transactions of the major extant cryptocurrencies, including bitcoin and ether, arises from the need for these systems to ensure they are permissionless from start to finish, i.e. to maintain their integrity and reliability without deferring to a centralised authority entity.

This simple fact is more important than it seems at first because it challenges in a significant way the reality that most bitcoin and ether mining pools are highly concentrated in the hands of a very small number of people. Put another way, everything from the verbal sophistry to the speculative fundraising to the enormous power consumption that sustain the major cryptocurrencies have failed to do the one thing that cryptocurrencies were invented to do: decentralise.

Most other cryptocurrencies likely operate with the same problems; I say ‘major’ only to limit myself to what I’m familiar with. Second, don’t underestimate the value of simple facts in an ecosystem in which jargon and verbiage are core components of defending against criticism. One such bit of verbiage is the oft-repeated claim that “it’s still the early days” – in the face of questions about how much more time cryptocurrencies will need to become stable and, importantly, socially useful. Software engineer Molly White has written about how this is simply not true:

… a lot has changed in the technology world in the past six to twelve years. One only needs to look at Moore’s law to see how this is pretty much built in to the technology world, as once-impossible ideas are rapidly made possible by exponentially more processing power. And yet, we are to believe that as technology soared forward over the past decade, blockchain technologies spent that time tripping over their own feet?

Something I see missing from this already expansive discussion (i.e. I might have missed it) is how climate change alters the picture.

The biggest criticism facing bitcoin and ether is that their power consumption, based on the method they use to protect against fraud in a decentralised way – called ‘proof of work’ – is colossal. Rosenthal defers to the Cambridge Bitcoin Energy Consumption Index, according to which the annualised bitcoin network power consumption (at 6:47 pm on February 13, 2022) was 125.13 TWh – roughly equal to that of the Netherlands.

Others, like Molly White, have written about the fact that 13-14 years after the advent of the web, there was much more adoption and innovation than there has been in the 13-14 years since the birth of the idea of using permissionless blockchains to execute financial transactions. This can be interpreted to imply that the proponents of cryptocurrencies have been expending energy – both literal and otherwise – fighting against the system’s indefatigable tendency to centralise. And by failing, they have kept this energy out of reach of its “more socially valuable uses,” to use Rosenthal’s words.

I think both these arguments – the straightforward carbon footprint and the social disempowerment – are significant and legitimate but often lead people to ignore a third implication specific to technology: the time a technology has available to prove that its adoption is desirable is falling rapidly, perhaps as fast as the atmospheric concentration of carbon dioxide (CO2) is increasing.

The creation and implementation of the web – technically, web1 from the early 1990s and web2 from the mid-2000s – happened at a time when the atmospheric CO2 concentration was 354.45 ppm (1990) and then 379.98 ppm (2005). In 2021, the concentration was 416.45 ppm.

Tech folks may find this arbitrary, but for an observer at infinity (which I consider myself and anyone outside of the cryptocurrency as well as IT/software spaces and located in an economically developing or ‘under-developed’ country to be), it seems eminently reasonable. Climate change has broken the symmetry between our past and our future vis-à-vis our ability to tolerate energy-intensive technologies, and constantly breaks it.

Roughly 16 years lapsed between the advent of web1 and the birth of Twitter, but in the era of manifest climate change, the fuller statement has to be: “Roughly 16 years lapsed between the advent of web1 and the birth of Twitter, as the atmospheric CO2 concetration increased by 27.64 ppm.” Obviously there may be no generally accepted way to compare levels or even types of innovation, so saying “innovating something in the cryptocurrency space comparable to Twitter” doesn’t make sense. Let’s flip it to a marginally more meaningful statement, one that I hope will also illustrate my point better: how much innovation did technologists achieve in the cryptocurrency-space in the time in which atmospheric CO2 concentrations increased by 27.64 ppm?

Note here that web3 – a web based on storing, transporting and validating information using blockchains – seeks to depart from the incumbent web2 by decentralising, and liberating, user experience from the silos of ‘Big Tech’, a group of companies that includes Twitter. So there may be a way to compare the carbon emissions vis-à-vis efforts to achieve web3 versus efforts to achieve web2. Proponents of cryptocurrencies and NFTs may contend in turn that the social consequences of web2 and web3 would be apples and oranges, but I think I’m comfortable ‘cancelling’ that difference with the opportunities for social welfare squandered by wasteful energy consumption.

Second note: the concentration of atmospheric CO2 is distributed like this. But in our calculations, we need to adopt the global average for reasons both obvious (it’s climate change, not weather change) and subtle. Some entities have created (permissionless) “carbon-negative” blockchains; the negativity is attained through carbon offsets, which is a stupid idea. To quote from a previous post:

Trees planted today to offset carbon emitted today will only sequester that carbon at optimum efficiencies many years later – when carbon emissions from the same project, if not the rest of the world, are likely to be higher. Second, organisations promising to offset carbon often do so in a part of the world significantly removed from where the carbon was originally released. Arguments against the ‘Miyawaki method’ suggest that you can only plant plants up to a certain density in a given ecosystem, and that planting them even closer together won’t have better or even a stagnating level of effects – but will in fact denigrate the local ecology. Scaled up to the level of countries, this means … emitting many tonnes of carbon dioxide over North America and Europe and attempting to have all of that sequestered in the rainforests of South America, Central Africa and Southeast Asia won’t work, at least not without imposing limitations on the latter countries’ room to emit carbon for their own growth as well as on how these newly created ‘green areas’ should be used.

To conclude: Global warming is accelerating, so I’m comfortable comparing two events – such as two bits of innovation – only if they occurred in a period of the same atmospheric CO2 concentration (give or take 10%). Perhaps more fundamentally, clock-time is a less useful way today to measure the passage of time than the value of this number, including vis-à-vis the tolerability of innovation.

The persistence of NFTs

NFTs freak me out. One of the ways in which my grandmother lost touch with her daughter – my mother – was my mother’s generation’s access to and use of computers, smartphones and the internet. And one of the ways in which my mother and father are out of touch with my generation is digitisation: the amount of information, and ways to manipulate it and extract wealth from it, that has become virtual. And I’m becoming surer that NFTs will be one of the big ways in which I’ll lose touch with the generation following mine.

From my point of view, NFTs have two facets, one each for the physical and the digital worlds they span. NFTs are essentially digital, but their name itself – non-fungible tokens – indicates that they are the product of a time in which the physical, typified by the fungible, and the digital coexist but in which the fungibles are still more important, even as the non-fungible is starting to evolve its first ‘offline communities’. Such communities are perhaps the best indications there could be that something is worth noticing, even if it’s misguided or just culturally hollow.

The film (and the book, which I haven’t read) Ready Player One should quickly clarify how powerful and how liberating the non-fungible universe, the metaverse, can be, even though it’s very much an outcome fantasy, and NFTs are allowing people to crenellate around such possibilities. Yet I remain deeply sceptical of NFTs because they exist in a superposition of high energy-consumption, the socio-economic privileges of their proponents, the absence of socialist values in their development trajectories and, immutably, a soup of jargon that constantly keeps their principles out of reach of those who would like to debate them. (The last point is non-trivial: intended inexplicability is a common symptom of scams).

I’m aware that, with these vectors of scepticism, I’m also part of a global community that’s pushing back against the nebulous rhetoric that has enveloped NFT culture – a community animated by the obvious and considerable distance between the present as lived by countless people in the “Global South” and the future as those in New York and California are imagining it.

At the same time, I’ve also been sort of wary of what the essential motivation for the NFT culture and the metaversal tendencies more broadly might be. This picture isn’t immediately clear because both cryptocurrencies and the metaverse are the brainchildren of that white + libertarian + Silicon Valley + tech-bro space that has prided itself on its profiteering, technocratism, cynicism of politics and a unique brand of super-rationalism. So it’s hard to conclude that anything this group thinks is a good idea is more than a good idea to make more money.

On the flip side, the existence of communities around an asset as baffling as NFTs at least indicates the presence of a deeper angst, particularly among people of certain ages. What might this be?

I recently read an article by Ginevra Davis, published on January 21, that attempted a diagnosis:

Our generation is notable for our lack of a youth-led counterculture, or any coherent rebellion, at least not on the scale of the late 1960s. But this lack of open rebellion does not mean that we are more satisfied than previous generations, or that we have nothing to rebel against. We are by many measures poorer, sicker (mentally and physically), and have fewer close relationships than our parents or grandparents. But instead of running away to some proverbial California, we have mostly chosen to express our frustration in private, on the internet, where you can laugh at memes about major depression or wanting to kermit sewer slide from the safety of your bedroom.
In the NFT community, we are witnessing the logical conclusion of a generation that is so alienated, so profoundly unfulfilled, that they are considering abandoning the physical world altogether. At least the metaverse is something new—maybe somewhere they can be rich, or important.

Either this is really true or it’s what the NFT-evangelists are telling themselves. Either way, it’s led to the creation of a parallel dimension that apparently promises to quell the tension that inhabiting the physical world in the 21st century entails. But it’s probably what the evangelists are telling themselves because, for an observer at infinity, it’s very difficult to distinguish the mores of the wider cryptocurrency + metaverse community, especially the self-indulgence and consumerism, from those of the tech scene that this community is apparently tiring of (Metakovan’s eyebrow-raising purchase of that piece of art for $69 million comes to mind). In fact, it’s tempting to consider whether NFTs are the result of a people doubling down on a culture and worldview in search of a purpose that this culture and worldview have thus far failed to produce, that their angst is less the desperation to break out and more the desperation per se. Davis herself is more charitable in her conclusion:

In “Slouching Towards Bethlehem,” [Joan] Didion captured a moment in time; a small group of teenagers who tried to find meaning in psychedelics. But it was also one of the first major literary works documenting the broader phenomenon of American decadence, or cultural malaise in the face of unprecedented economic prosperity. In the fifty-odd years since “Slouching” was published, a diagnosis of “decadence” has become shorthand for a constellation of cultural neuroses plaguing Western countries, including technological stagnation, cultural repetition, sterility, and nihilism. Unlike in the 1960s, it no longer includes coping with unprecedented prosperity.
As I wandered through New York, I wondered what Didion would think of the festivities at NFT.NYC. Are the desires of NFT proponents to rebuild the world online the endgame of a fully stagnant society—a final detour into the absurd before we give up on progress for good? Or is the starry-eyed optimism of digital true believers a last stand against decadence?
…
I came away from NFT.NYC with a certain respect for the NFT community. They are not taking decadence lying down, and have found a way to revel in the absurdity.

I don’t know agree with her, of course. My principal point of disagreement is Davis’s use of the word “we” to refer apparently to all of us as one cohesive mass. But there are many wes here: on the ground, there are super-rich Americans, wannabe-rich Americans, white Americans, non-white Americans, immigrants; off the ground, there are people around the world that technically belong to the same generation but are operating in much less privileged socio-economic contexts, as well as others in the same context who are in turn further disprivileged by class, caste, race, gender, geography, leadership, etc.

On this multi-layered pyramid denoting many strata of a single generation of people, there are many, many things that people on the lower rungs have left to do – from exiting poverty to eliminating caste-based discrimination, from improving income equality to reducing carbon emissions – before the future looks bare enough to populate with NFTs. The only way a unified “we” makes sense is that we will all suffer the vision this vanishingly small group of wealthy and influential people has for a better future.

Pseudoscientific materials and thermoeconomics

The Shycocan Corp. took out a full-page jacket ad in the Times of India on June 22 – the same day The Telegraph (UK) had a story about GBP 2,900 handbags by Gucci that exist only online, in some videogame. The Shycocan product’s science is questionable, at best, though its manufacturers have disagreed vehemently with this assessment. (Anusha Krishnan wrote a fantastic article for The Wire Science on this topic). The Gucci ‘product’ is capitalism redigesting its own bile, I suppose – a way to create value out of thin air. This is neither new nor particularly exotic: I have paid not inconsiderable sums of money in the past for perks inside videogames, often after paying for the games themselves. But thinking about both products led me to a topic called thermoeconomics.

This may be too fine a point but the consumerism implicit in both the pixel-handbags and Shycocan and other medical devices of unproven efficacy has a significant thermodynamic cost. While pixel-handbags may represent a minor offense, so to speak, in the larger scheme of things, their close cousins, the non-fungible tokens (NFTs) of the cryptocurrency universe, are egregiously energy-intensive. (More on this here.) NFTs represent an extreme case of converting energy into monetary value, bringing into sharp focus the relationships between economics and thermodynamics that we often ignore because they are too muted.

Free energy, entropy and information are three of the many significant concepts at the intersection of economics and thermodynamics. Free energy is the energy available to perform useful work. Entropy is energy that is disorderly and can’t be used to perform useful work. Information, a form of negative entropy, and the other two concepts taken together are better illustrated by the following excerpt, from this paper:

Consider, as an example, the process of converting a set of raw materials, such as iron ore, coke, limestone and so forth, into a finished product—a piece of machinery of some kind. At each stage the organization (information content) of the materials embodied in the product is increased (the entropy is decreased), while global entropy is increased through the production of waste materials and heat. For example:
Extraction activities start with the mining of ores, followed by concentration or benefication. All of these steps increase local order in the material being processed, but only by using (dissipating) large quantities of available work derived from burning fuel, wearing out machines and discarding gauge and tailings.
Metallurgical reduction processes mostly involve the endothermic chemical reactions to separate minerals into the desired element and unwanted impurities such as slag, CO2 and sulfur oxides. Again, available work in the form of coal, oil or natural gas is used up to a much greater extent than is embodied in metal, and there is a physical wear and tear on machines, furnaces and so forth, which must be discarded eventually.
Petroleum refining involves fractionating the crude oil, cracking heavier fractions, and polymerizing, alkylating or reforming lighter ones. These processes require available work, typically 10% or so of the heating value of the petroleum itself. Petrochemical feedstocks such as olefins or alcohols are obtained by means of further endo- thermic conversion processes. Inorganic chemical processes begin by endothermic reduction of commonplace salts such as chlorides, fluorides or carbonates into their components. Again, available work (from electricity or fuel) is dissipated in each step.
Fabrication involves the forming of materials into parts with desirable forms and shapes. The information content, or orderliness, of the product is increased, but only by further expending available work.
Assembly and construction involves the linking of components into complex subsystems and systems. The orderliness of the product continues to increase, but still more available work is used up in the processes. The simultaneous buildup of local order and global entropy during a materials processing sequence is illustrated in figure 4. Some, but not all of the orderliness of the manufactured product is recoverable as thermodynamically available work: Plastic or paper products, for example, can be burned as fuel in a boiler to recover their residual heating value and con- vert some of that to work again. Using scrap instead of iron ore in the manufacture of steel or recycled aluminum instead of bauxite makes use of some of the work expended in the initial refining of the ore.

Some years ago, I read an article about a debate between a physicist and an economist; I’m unable to find the link now. The physicist says infinite economic growth is impossible because the laws of thermodynamics forbid it. Eventually, we will run out of free energy and entropy will become more abundant, and creating new objects will exact very high, and increasing, resource costs. The economist counters that what a person values doesn’t have to be encoded as objects – that older things can re-acquire new value or become more valuable, or that we will be able to develop virtual objects whose value doesn’t incur the same costs that their physical counterparts do.

This in turn recalls the concept of eco-economic decoupling – the idea that we can continue and/or expand economic activity without increasing environmental stresses and pollution at the same time. Is this possible? Are we en route to achieving it?

The Solar System – taken to be the limit of Earth’s extended neighbourhood – is very large but still finite, and the laws of thermodynamics stipulate that it can thus contain a finite amount of energy. What is the maximum number of dollars we can extract through economic activities using this energy? A pro-consumerist brigade believes absolute eco-economic decoupling is possible; at least one of its subscribers, a Michael Liebreich, has written that in fact infinite growth is possible. But NFTs suggest we are not at all moving in the right direction – nor does any product that extracts a significant thermodynamic cost with incommensurate returns (and not just economic ones). Pseudoscientific hardware – by which I mean machines and devices that claim to do something but have no evidence to show for it – belongs in the same category.

This may not be a productive way to think of problematic entities right now, but it is still interesting to consider that, given we have a finite amount of free energy, and that increasing the efficiency with which we use it is closely tied to humankind’s climate crisis, pseudoscientific hardware can be said to have a climate cost. In fact, the extant severity of the climate crisis already means that even if we had an infinite amount of free energy, thermodynamic efficiency is more important right now. I already think of flygskam in this way, for example: airplane travel is not pseudoscientific, but it can be irrational given its significant carbon footprint, and the privileged among us need to undertake it only with good reason. (I don’t agree with the idea the way Greta Thunberg does, but that’s a different article.)

To quote physicist Tom Murphy:

Let me restate that important point. No matter what the technology, a sustained 2.3% energy growth rate would require us to produce as much energy as the entire sun within 1400 years. A word of warning: that power plant is going to run a little warm. Thermodynamics require that if we generated sun-comparable power on Earth, the surface of the Earth—being smaller than that of the sun—would have to be hotter than the surface of the sun! …
The purpose of this exploration is to point out the absurdity that results from the assumption that we can continue growing our use of energy—even if doing so more modestly than the last 350 years have seen. This analysis is an easy target for criticism, given the tunnel-vision of its premise. I would enjoy shredding it myself. Chiefly, continued energy growth will likely be unnecessary if the human population stabilizes. At least the 2.9% energy growth rate we have experienced should ease off as the world saturates with people. But let’s not overlook the key point: continued growth in energy use becomes physically impossible within conceivable timeframes. The foregoing analysis offers a cute way to demonstrate this point. I have found it to be a compelling argument that snaps people into appreciating the genuine limits to indefinite growth.

And … And Then There’s Physics:

As I understand it, we can’t have economic activity that simply doesn’t have any impact on the environment, but we can choose to commit resources to minimising this impact (i.e., use some of the available energy to avoid increasing entropy, as Liebreich suggests). However, this would seem to have a cost and it seems to me that we mostly spend our time convincing ourselves that we shouldn’t yet pay this cost, or shouldn’t pay too much now because people in the future will be richer. So, my issue isn’t that I think we can’t continue to grow our economies while decoupling economic activity from environmental impact, I just think that we won’t.

A final point: information is considered negative entropy because it describes certainty – something we know that allows us to organise materials in such a way as to minimise disorder. However, what we consider to be useful information, thanks to capitalism, nationalism (it is not for nothing that Shycocan’s front-page ad ends with a “Jai Hind”), etc., has become all wonky, and all forms of commercialised pseudoscience are good examples of this.

On crypto-art, racism and outcome fantasies

If you want to find mistakes with something, you’ll be able to find them if you tried long enough. That doesn’t inherently make the thing worthless. The only exception I’ve encountered to this truism is the prevailing world-system – which is both fault-ridden and, by virtue of its great size and entrenchment, almost certainly unsalvageable.

I was bewitched by cryptocurrencies when I first discovered them, in 2008. I wrote an op-ed in The Hindu in 2014 advocating for the greater use of blockchain technology. But between then and 2016 or so, I drifted away as I found how the technology was also drifting away from what I thought it was to what it was becoming, and as I learnt more about politics, social systems and the peopled world, as it were — particularly through the BJP’s rise to power in 2014 and subsequent events that illustrated how the proper deployment of an idea is more important than the idea itself.

I still have a soft spot for cryptocurrencies and related tokens, although it’s been edging into pity. I used to understand how they could be a clever way for artists to ensure they get paid every time someone, somewhere downloads one of their creations. I liked that tokens could fractionate ownership of all kinds of things – even objects in the real world. I was open to being persuaded that fighting racism in the crypto-art space could have a top-down reformatory effect. But at the same time, I was – and remain – keenly aware that fantasies of outcomes are cheap. Today, I believe cryptocurrencies need to go; their underlying blockchains may have more redeeming value but they need to go, too, because more than being a match for real-world cynicism, they often enable it.

Non-fungible tokens (NFTs) are units of data that exist on the blockchain. According to Harvard Business Review:

The technology at the heart of bitcoin and other virtual currencies, blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically.

NFTs have been in the news because the auction house Christie’s recently sold a (literal) work of art secured as an NFT for a stunning $69.3 million (Rs 501.37 crore). The NFT here is a certificate of sorts attesting to the painting’s provenance, ownership and other attributes; it exists as a token that can be bought or sold in transactions performed over the blockchain – just like bitcoins can be, with the difference that while there are millions of bitcoins, each NFT is permanently associated with the artwork and is necessarily one of its kind. In this post, I’m going to address an NFT and its associated piece of art as a single, inseparable entity. If you read about NFTs in other contexts, they’re probably just referring to units of data.

The reason a combined view of the two is fruitful here is that AFP has called crypto user Metakovan’s winning bid “a shot fired for racial equality”, presumably in the crypto and/or crypto-art spaces. (Disclaimer: I went to college with Metakovan but we haven’t been in touch for many years. If I know something, it’s by Googling.) He and his collaborator also wrote on Substack:

Imagine an investor, a financier, a patron of the arts. Ten times out of nine, your palette is monochrome. By winning the Christie’s auction of Beeple’s Everydays: The First 5000 Days, we added a dash of mahogany to that color scheme. … The point was to show Indians and people of color that they too could be patrons, that crypto was an equalizing power between the West and the Rest, and that the global south was rising.

This is a curious proposition that’s also tied to the NFT as an idea. The ‘non-fungible’ of an NFT means the token cannot be replaced by another of its kind; it’s absolutely unique and can only be duplicated by forging it – which is very difficult. So the supply of NFTs is by definition limited and can be priced through speculation in the millions, if need be. NFTs are thus “ownership certificates for digital art that imbue” their owners “with demonstrable scarcity,” as one writer put it. This is also where the picture gets confusing.

First, the Christie’s auction was really one wealth-accumulator purchasing a cultural product created by consuming X watts of power, paid for using a new form of money that the buyer is promoting, and whose value the buyer is stewarding, in a quantity determined by the social priorities of other wealth-accumulators, to an artist who admits he’s cashing in on a bubble, plus allegations of some other shady stuff – although legal experts have also said that there appear to be no “apparent” signs of wrongdoing. What is really going on here?

Minting an NFT is an energy-intensive process. For example, you can acquire bitcoin, which is an example of a fungible token, by submitting verifiable proof of work to a network of users transacting via a blockchain. This work is in the form of solving a complex mathematical problem. Every time you solve a problem to unlock some bitcoins, the next problem automatically becomes harder. So in time, acquiring new bitcoins becomes progressively more difficult, and requires progressively more computing power. Once some proof of work is verified, the blockchain – being the distributed ledger – logs the token’s existence and the facts of its current ownership.

‘NFTs are anti-climatic’ is a simple point, but this argument becomes stronger with some numbers. According to one estimate, the carbon footprint of one ether transaction (ether is another fungible token, transacted via the Ethereum blockchain) is 29.5 kg CO2; that of bitcoin is 359.04 kg CO2. The annual power consumption of the international bitcoin mining and trading enterprise is comparable to that of small countries. Consider what Memo Atken said here, connecting NFTs, fungible tokens and the “crypto-art” in between: “Artists should be able to release hundreds of digital artworks” – but “there is absolutely no reason that releasing hundreds of digital artworks should have footprints of hundreds of MWh.”

Of course, it’s important to properly contextualise the energy argument due to nuances in how and why bitcoin is traded. In February this year, Coindesk, a news outlet focusing on cryptocurrencies, rebutted an article in Bloomberg that claimed bitcoin was a “dirty business”, alluding to its energy consumption. Coindesk claimed instead that bitcoins and the blockchain do more than just what dollars stand for, so saying bitcoin is “dirty” based on Visa’s lower energy consumption is less useful than comparing it to the energy, social and financial costs of mining, processing, transporting and securing gold. (Visa secures credit and debit card transactions just like, but not in the same way, the blockchain secures transactions using consensus algorithms.)

However, the point about energy consumption still stands because comparing bitcoins and the blockchain to the Fedwire RTGS system plus banks, which together do a lot more than what Visa does and could be a fairer counterpart in the realm of bona fide money, really shows up bitcoin’s disproportionate demands. Fintech analyst Tim Swanson has a deep dive on this topic, please read it; for those who’d rather not, let me quote two points. First:

“The participating computing infrastructure for Fedwire involves between ten and twenty thousand computers, none of which need to generate [power-guzzling cryptographic safeguards]. Its participants securely transfer trillions of dollars in real value each day. And most importantly: Fedwire does not take the energy footprint of Egypt or the Netherlands to do so. … the more than 2 million machines used in bitcoin mining alone consume as much energy as Egypt or the Netherlands consumes each year. And they do so while simultaneously only securing a relatively small amount of payments, less than $4 billion last year.”

The energy consumption, and the second point, shows up when users need to protect against a vulnerability of consensus-based transactions, called the Sybil attack (a.k.a. pseudospoofing). Consider the following reductively simple consensus-generating scenario. If there is a group of 10 members and most of them agree that K is true, then K is said to be true. But one day, another member joins the group and also signs on 14 of his friends. When the group meets again, the 15 new people say K is false while the original 10 say K is true, so finally K is said to be false. The first 10 members later find out that the 15 who joined were all in cahoots, and by manufacturing a majority opinion despite not being independent actors, they compromised the group’s function. This is the Sybil attack.

Because the blockchain secures transactions by recursively applying a similar but more complicated logic, it’s susceptible to being ‘hacked’ by people who can deceptively conjure evidence of new but actually non-existent transactions and walk away with millions. To avoid this loophole without losing the blockchain’s decentralised nature, its inventor(s) forced all participants in the network to show proof of work – which is the mathematical problem they need to solve and the computing power and related costs they need to incur.

Proof of work here is fundamentally an insurance against scammers and spammers, achieved by demanding the ability to convert electrical energy into verifiable digital information – and this issue is in turn closer to the real world than the abstracted concepts of NFTs and blockchain. The problem in the real world is that access to crypto assets is highly unequal, being limited by access to energy, digital literacy, infrastructure and capital.* The flow of all of these resources is to this day controlled by trading powers that have profited from racism in the past and still perpetuate the resulting inequality by enforcing patents, trade agreements, import/export restrictions – broadly, through protectionism.

* Ethereum’s plan to transition from a proof-of-work to a proof-of-stake system could lower energy consumption, but this is an outcome fantasy and also still leaves the other considerations.

So even when Black people talk about cryptocurrencies’ liberating potential for their community, I look at my wider South and Southeast Asian neighbourhood and feel like I’m in a whole other world. Here, replacing banks’ or credit-card companies’ centralised transaction verification services with a blockchain on every person’s computer is more of the same because most people left out by existing financial systems will also be left behind by blockchain technology.

Metakovan’s move was ostensibly about getting the world’s attention and making it think about racism in, for some reason, art patronage. And it seems opportunistic more than anything else, a “shot fired” to be able to improve one’s own opportunities for profit in the crypto space instead of undermining the structural racism and bigotry embedded in the whole enterprise. This is a system which owes part of its current success to the existence of social and economic inequalities, which has laboured over the last few decades to exploit cheap labour and poor governance in other, historically beleaguered parts of the world to entrench technocracy and scientism over democracy and public accountability.

I’m talking about Silicon Valley and Big Tech whereas Metakovan labours in the cryptocurrency space, but they are not separate. Even if cryptocurrencies are relatively younger compared to the decades of policy that shaped Silicon Valley’s ascendancy, it has benefited immensely from the tech space’s involvement and money: $20 billion in “initial coin offerings” since 2017 plus a “wave of financial speculation”, for starters. In addition, cryptocurrencies have also helped hate groups raise money – although I’m also inclined to blame subpar regulation for such a thing being possible.

I’ll get on board a good cryptocurrency value proposition – but one is yet to show itself. The particular case of ‘Everydays’ and the racism angle is what rankles most. “Depending on your point of view, crypto art could be the ultimate manifestation of conceptual art’s separation of the work of art from any physical object,” computer scientist Aaron Hertzmann wrote. “On the other hand, crypto art could be seen as reducing art to the purest form of buying and selling for conspicuous consumption.” Metakovan’s “shot” is the latter – a gesture closer to a dog-whistle about making art-trading an equal-opportunity affair in which anyone, including Metakovan himself, can participate and profit from.

If you really don’t want racism, the last thing you should do is participate in an opaque and unregulated enterprise using obfuscated financial instruments. Or at least be prepared to pursue a more radical course of action than to buy digital tosh and call it “the most valuable piece of art for this generation”.

This brings me to the second issue: what can the energy cost of culture be? For example, Tamil-Brahmin weddings in Chennai, my home-city, are a gala affair – each one an elaborate wealth-signalling exercise that consumes thousands of fresh-cut banana leaves, a few quintals of wood, hundreds of units of power for air-conditioning and lots of new wedding clothes that are often worn only once or a few times – among many other things. Is such an exercise really necessary? My folks would say ‘yes’ in a heartbeat because they believe it’s what we need to do, that we can’t forego any of these rituals because they’re part of our culture, or at least how we’ve come to perform it.

To me, this is excessive – but then I have a dilemma. As I wrote about a similar issue last year, vis-à-vis Netflix:

Binge-watching is bad – in terms of consuming enough energy to “power 40,000 average US homes for a year” and in other ways – but book-keepers seem content to insulate the act of watching itself from what is being watched, perhaps in an effort to determine the worst case scenario or because it is very hard to understand, leave alone discern or even predict, the causal relationships between how we feel, how we think and how we act. However, this is also what we need: to accommodate, but at the same time without being compelled to quantify, the potential energy that arises from being entertained.

At this juncture, consider: at what point does art itself become untenable because it paid an energy cost deemed too high? And was the thing that Metakovan purchased from Beeple, ‘Everydays’, really worth it? While I don’t see that it could be easy to answer the first question, the second one makes it easy for us: ‘Everydays’ doesn’t appear to deserve the context it’s currently luxuriating in.

Aside from its creator Beeple’s admission of its mediocrity, writer Andrew Paul took a closer look at its dense collage for Input Magazine and found “juvenile, trollish bigoted artwork including racist Asian caricatures, homophobic language, and Hillary Clinton wearing a grill”. (Metakovan said in one interview that he felt a “soul connection” with Beeple’s work.) ‘Everydays’, Paul continues, “appears to say more about the worst aspects of the art world and capitalism than any one … of Beeple’s doodles: gatekeeping, exploitative, bigoted, and very, very tiresome.”