Crypto and AI exploit conflict zones and fossil fuels – with destructive consequences

Cryptocurrencies and AI rely on political stability, refugee camp workers and electricity blackouts, says Hito Steyerl.
In her new book, “Medium Hot," Hito Steyerl examines technology’s influence on art and it's heating of the planet.
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This is an edited excerpt from Medium Hot: Images in the Age of Heat, published by Verso Books in May 2025.

Buy a copy by clicking here. 

In Europe at the beginning of 2018, millions of digital clocks started to lag. In January, three minutes disappeared; in February, three more. What happened? 

According to some reports, cryptocurrency mining in Kosovo had caused electric clocks to slow down because of power fluctuations in the grid shared between Kosovo and Serbia. In the mining process, time itself had vanished.

Miners had been attracted to Kosovo by the prospect of free electricity. The political status of Kosovo was in limbo: after the 1998–99 Kosovo War, the administration of the region was provisionally handed to the United Nations. Ever since, Kosovo has been neither a nation nor anything else. This state of limbo has led to curious consequences. Some inhabitants of the northern municipalities have not paid electricity bills since 2008. After cryptocurrencies started to soar at the beginning of the 2020s, crypto mining became an important activity in these areas.

Mining Bitcoin is a very energy-intensive activity whereby computational power is wasted on otherwise-meaningless calculations to confirm transactions on a blockchain. Political power (or rather its absence), thus became expressed by the availability of electrical power. The mining of Bitcoin mirrored the impotence of traditional political institutions in this region. The most important resource was not electricity but political conflict itself.

From the miners’ point of view, this translated into an asset. Kosovo was not the only area in the region suddenly overcome by crypto mining frenzy, as an interview with a mining-gear provider in Slovenia shows:

"The electricity infrastructure was favourable for cryptocurrency mining...

Because Slovenia and these countries were part of Yugoslavia, the infrastructure was very well maintained...

Everybody was doing it. You had student homes in the basement filled with mining rigs, when people were kind of stealing free electricity that was provided to the buildings."

Similar mining booms happened on the border of Abkhazia and Georgia, another long-standing conflict zone, or in Kazakhstan which was rocked by energy riots in 2021. Most of these regions experienced unstable political conditions, and the combination of robust formerly socialist infrastructure and the precarious and unclear political status of certain territories facilitated energy theft.

In Kazakhstan on 1 January 2022, a sudden steep increase in the cost of liquefied petroleum gas sparked widespread protests that turned violent as security forces cracked down. Access to the internet and social media was severely restricted. All of this took place within another major regional crypto-mining boom in which mining farms had sprung up all over the place, leading to severe energy shortages. These conditions were described to me by a young member of the local Communist Party:

"When China started a war against miners, miners came to Kazakhstan. Electricity in Kazakhstan for European and Chinese people is very cheap. My other brother has his own mining farm. He has sixty or eighty video cards, and he pays only 141 dollars a month. I think he is mining ethereum. I have other friends too who are mining Bitcoin but they are all local miners.  

But recently many foreigners came here to mine, and they mine a lot!  

For example, in Taras, a small city close to Almaty, people have problems. They cannot use microwaves, washing machines or computers. When they use them, the electricity stops working. Two years ago, it was fine...

Shutdowns of electricity happened after protests. Everyone knew that it would be shut down. The reason is that after the Soviet Union collapsed we did not maintain or fix the infrastructure, and it’s in very bad condition. Our bourgeoisie is very greedy and they just exploit the Soviet infrastructure to make money and not to fix and maintain it."  

In this situation, the connections between digital technology and global corporate fossil extraction become apparent. Crypto wallets indirectly connect to a huge network of fossil pipelines powering mining rigs. Bitcoin mining takes places in synchronicity with mining natural resources and fossil fuels.  

Burning art

While a huge crypto boom was going on during the 2021 pandemic year, fuelled by people quarantined at home, mining rigs in conflict zones all over the world were fired up. On the ground, a vast network of carbon emitters provided the invisible basis to the shiny PR crypto slogans of decentralisation, independence and opportunity.  

This period of mining political instability spawned its own image genre, the so-called non-fungible token (NFT). NFTs are unique contracts created using blockchain computer code, which prove ownership over digital assets like images. This concept is confusing on purpose – it does not make a lot of sense to explain it.

A subgenre of crypto art soon emerged in which physical artworks were burned in order to live on as NFTs. Destruction literally became a means of production as Damien Hirst burned 1,000 of his pieces, investor Martin Mobarak burned an illustration by Frida Kahlo valued at US$10 million, and a group of investors burned a work by Banksy – all to be turned into NFTs.  

Apart from the shenanigans of a rapidly prototyped NFT art market and the convoluted justifications for having such tokens in the first place, these digital certificates also played a different role that was as prosaic as it was powerful. Crypto art served more or less as a pretext for ‘onboarding’ people into a technological environment, creating a new stage of financialisation defined by massive waste of energy and an enormous carbon footprint. 

Practically speaking, onboarding meant getting people used to wallets, exchanges, ledgers and other industry tools. But it also drafted people into an extractive environment of burning up energy, characterised by fossil fuel conflicts and pipeline wars, mining assets on the basis of political instability.  

Fossil pipelines are now augmented by digital pipelines, and the introduction of so-called AI into image production introduced another variation of ‘onboarding’. During the 2022 hype cycle, kickstarted by AI image generators like DALL-E, people were drafted into large-scale cloud architectures operating on subscription models.

The output of prompt generators like DALL-E served as a kind of PR freebie, similar to some kinds of handout NFTs. Users were being trained to get used to a rentier structure: ongoing payments are now required for people to access their own work.

This set of digital production pipelines sits on top of traditional fossil fuel–extraction pipelines. Data, like gas or oil, needs pipelines to flow and massive material infrastructures and technology stacks to enable their circulation.  

The training of OpenAI’s large language model GPT-3 is estimated to have consumed 1,287 megawatt-hours of electricity, leading to emissions of more than 550 tons of carbon dioxide equivalent – the amount a single person would produce taking 550 roundtrips between New York and San Francisco. Accounting for the retraining of this model on an almost daily basis, in order to be tapped by search engines, this number increases exponentially.

“There are already huge resources involved in indexing and searching internet content, but the incorporation of AI requires a different kind of fire-power,” explains Alan Woodward, professor of cybersecurity at the University of Surrey. Like NFTs, prompt-generated renderings are onboarding tools into energy-intensive combustion architectures which rely on cheap labour performed by people in conflict regions – and now also by refugees and migrants in metropolitan centres.            

The new miners are machine-learning microworkers, operating the seemingly automated machine-learning infrastructure behind the scenes. ‘Microwork’ refers to a series of small tasks that have been broken out of a larger project and can be completed online.

Interviews with Kurdish microworkers in northern Iraq revealed that many of them still lived in refugee camps, ten years after being displaced by different stages of the Syrian war. Their work consisted in tagging images, mainly for self-driving car systems – a task for which women were specifically targeted because it could be done from home without calling into question conservative morality codes and family structures. Many Syrian Kurds had received some university education prior to the war but lacked opportunities to continue it following their displacement.

Again, conflict (as well as gendered discrimination) becomes a resource for data corporations. In crypto mining, conflict provided access to cheap energy. However, in this case it creates cheap and disenfranchised labour – in other words, human energy. The seemingly automated cloud services animated by machine learning tools are operated by a new, invisible global underclass of data proletarians working under conditions of digital fragmentation of labour, to the point of earning fractions of a cent per tiny task.

Meanwhile, crypto mining industries continue to burn up histories. In January 2024, Abkhazia’s National Art Gallery burned down. Four thousand artworks from the nineteenth and twentieth century were incinerated. Reporting by eurasianet linked the fire to an electricity outage, stating that “Abkhazia has been experiencing electricity shortages recently due to a sharp spike in demand, at least some of which might be attributable to illegal cryptocurrency mining.”

This spike in demand for electricity corresponded to a renewed Bitcoin bubble in 2024, which led to a record high in the value of that cryptocurrency as well as associated mining sprees, power outages and fires across the region.

Cick here to read ‘Medium Hot: Images in the Age of Heat’ in full from Verso Books. 

Hito Steyerl is a visual artist, filmmaker, and Professor of Current Digital Media at the Academy of Fine Arts, Munich. She is the author of Medium Hot: Images in the Age of Heat.

Gago Gagoahidze is a Georgian-German artist and filmmaker. His work explores political and sociological aspects of the production and distribution of moving images, and the impact of global capitalism on post-Soviet countries, poverty and labour migration.

Miloš Trakilović is a Bosnian-Dutch visual artist whose work engages with the production of power following the digital turnover, using digital and time-based media, with film, video, and installation as central elements. He is also active as an educator and consultant in the art field.

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