Thread by @mormo_music

The site cryptoart.wtf by Memo Akten (@memotv) claims to report the ecological footprint of cryptoart NFTs. But the calculation it’s based on is not valid; we can’t legitimately derive an ecological footprint cost per unit of gas in the way it tries to.

thread

On this page memoakten.medium.com/analytics-the-… Memo explains how the energy cost of a piece of crypto art is calculated on the site. The calculation depends on adding up the gas costs of all transactions associated with the artwork being analysed.

He writes:
“Since the energy required and footprint of mining a block is independent of its contents and number of transactions, the Gas required by a transaction is representative of the portion of a block’s footprint it will incur

"From the total amount of Ethereum Gas and energy consumed by the Ethereum network over a period we can calculate the energy footprint per unit of Gas. Then we can calculate the footprint of a particular transaction from the amount of Gas that it used."

The problem is that gas used in a block, and energy used to mine that block are largely independent. You can't sensibly derive an energy footprint per unit of gas. Yet cryptoart.wtf pretends to do so.

To illustrate: my transaction costing 21,000 gas is the only transaction in a block that cost X units of energy to mine.

If that block had *not* contained my transaction - if it was an 'empty block' - the block would *still* have cost the same X units of energy to mine.

And if the block contained a many similar transactions to mine instead of just one it would *still* have cost X units of energy to mine.

(on way you can go wrong here is by conflating the relatively small amount of computation needed to process transactions in a mined block with the relatively large computation required to mine the block in the first place)

Since gas load per block and energy cost per block are largely independent, we can't sensibly derive energy costs of transactions by the amount of gas they cumulatively use.

So when the site claims, for instance, that an artwork cost 181 kWh and 106 Kg of CO2 this is false.

It's a bit like saying because a dog peed at four locations each of the two fleas hitching a ride is responsible for two puddles of urine

Instead the energy cost of mining a block is mainly determined by the cumulative computing power that was dedicated to mining the blocks in the previous period.

the Ethereum network is designed so that new blocks are mined at a predicable rate. To achieve this regularity the network dynamically adjusts the difficulty of the computational work miners have to do ( the ‘network difficulty’).

If the computing power dedicated to mining increases, the network difficulty increases to avoid blocks being mined at too high a rate.

Another site that Memo links to carbon.fyi/learn) contains the following passage (emphasis added)

“Emissions come from mining (competing to solve proof-of-work problems), which is not directly coupled with transaction activity. [...]

"We could place the burden of emissions entirely on miners, but that would not be fair, as everyone benefits from the stability provided by their mining power!

"For this reason, we allocate emissions based on your usage of the network, which represents the comparative degree of benefit you receive from the network“

the immediately apparent problem: there’s no necessary connection between the amount of gas a user pays and the degree to which they benefit from the Ethereum network.

imagine that I create a transaction in a naive way, it’s computationally expensive. Then my friend kindly optimises it for me. It still has the same effect that I wanted, but it achieves it using less computing time and a lower gas cost.

This optimisation hasn’t *decreased* the benefit I receive from the network (even though it now uses less gas), it’s increased the net benefit to me because I get the same effect I wanted at a lower cost.

There’s a more fundamental problem with this approach too. Another analogy to illustrate: My local council replaces lights in my street with brighter ones that use more power. Although (let's grant) everyone on my street benefits from the brighter lighting, no one asked for it.

So it doesn’t make sense to hold anyone living on the street responsible for some portion of the increased energy use (even though they'll be made to pay for it). Likewise it doesn’t make sense to hold ethereum users directly responsible for miner’s choices about energy use.

Since transactions have no direct effect on t computing cost of mining it doesn’t make sense to apportion that cost to the creators of transactions. carbon.fyi’s attempt to justify doing this (a rationale that cryptoart.wtf seems to share) fails on 2 counts

Miners are creating a positive externality through their mining. Benefiting from it this access to a secured blockchain doesn’t automatically make you culpable for miners choices.

That all said, there *are* ways that interacting with NFTs can increase ethereum's energy use indirectly, though these increases can’t be confidently quantified in kwh or kgs of CO2 like cryptoart.wft tries to. For instance:

You need to buy ETH tokens to buy NFTs. when you buy ETH you contribute to the demand for ETH. higher demand = higher price = greater incentive to mine ETH = more competition between miners = greater energy used by the network

Also: miners receive the gas fees that users of the Ethereum network send with transactions. These fees incentivise mining to some extent. Though gas fees have been a small fraction of total miner revenue so far.

concluding: What I *am* saying:

the calculations used on cryptoart.wtf are based on a mistake which invalidates the statistics it publishes about NFT works and their energy footprint

A non-exhaustive list of things I’m not saying

I’m not endorsing cryptoart in general, or any cryptoart platform

I’m not saying there’s no reason to prefer other systems (e.g. PoS) over proof of work