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TopHistorical Overview
Following is a brief historical overview of blockchain and generative art. A more in-depth historical perspective on arts and the blockchain, both from liberal-arts as well as technical angles, can be found in Whitaker (2019).
Bitcoin and Blockchain
Bitcoin (Nakamoto, 2008) is a software project, launched in 2009 by a pseudonymous author by the name of Satoshi Nakamoto, that allows a network of computers to collaboratively maintain a global ledger on which transactions can be recorded. By following a strict set of rules, the nodes in the network arrive at a global consensus, such that every node’s copy of the ledger contains the same transactions, in the same order, as every other node. This ledger, commonly called a blockchain, enables the recording of economic activity between peers on the network, without relying on a trusted third party. This is only possible because the economic asset native to the Bitcoin blockchain, a cryptocurrency by the same name, is publicly recorded and traced on the blockchain from the moment it is minted and, by following the same set of consensus rules, every node ensures that no amount of bitcoin can be double-spent. This created a novel property in the realm of digital assets: trustless artificial scarcity.
An important security aspect of the Bitcoin protocol is that the insertion of new blocks of records into the ledger requires a computationally intensive operation, known as Proof-of-Work (PoW) mining. This work effort compounds with each new block added to the ledger, so that the effort of re-writing historical records becomes computationally unfeasible, which results in another important property of the ledger: immutability. However, a significant downside of PoW is that it consumes large amounts of energy which, if non-renewable energy is involved, can result in a significant carbon footprint. There are alternatives to this, which will be discussed later in the paper.
Following Bitcoin’s success, several other projects launched similar blockchain-backed cryptocurrencies, or altcoins, with limited relative adoption.
Ethereum and Smart Contracts
Even though Bitcoin’s transactions allow for the execution of simple scripts upon validation by nodes, such functionality is very limited and most suitable for the execution of basic financial instruments, such as multi-signature addresses.
In 2013 programmer Vitalik Buterin, after having several proposals for expanding Bitcoin’s scripting capabilities turned down, proposed an alternative blockchain project of his own, named Ethereum, which supported a Turing-complete language and hence the ability to run arbitrary code snippets, called smart contracts (Buterin, 2013). Upon Ethereum’s launch in 2015, the project saw a significant rise in adoption, especially with the launching of the ERC-20 fungible token standard (Ethereum Foundation, 2015), which allows the easy creation of new fungible tokens on the platform, and which resulted in what became known as the ICO phenomenon, with a large number of projects fundraising large sums of money, many of them with little more than a white paper (Fenu et al., 2018).
Ethereum, like Bitcoin, also uses a PoW consensus mechanism, therefore it also suffers from a similar high carbon footprint problem. In addition to that, due to the high popularity of the platform, high network congestion causes network fees, called gas, to also rise to extremely high amounts, with a single transaction sometimes costing upwards of US$100 in gas fees (Signer, 2018).