This is similar to Bitcoin but with a huge difference, it is not interchangeable. But what does this mean exactly and what is the relation of music with a digital valuable that is not interchangeable? Learn about NFT offset and the role of NFTs in envornmental protection in this easy to read article.
The nature of cryptocurrency production
A non-fungible token is a digital valuable which is completely unique. When we talk about digital currencies, such as Bitcoin, they are all fungible, meaning one Bitcoin is completely identical to another Bitcoin, just as a 100 dollar bill is identical to another 100 dollar bill in use and value. If we talk about non-fungible things, then take Mona Lisa for example. There is only one Mona Lisa in the world, therefore, it is non-fungible. The case is similar with NFTs.
Bitcoin is putting a lot of environmental stress on the planet because of the huge amount of electricity needed to „mine” it using computers. A Bitcoin carbon offset is highly desireable because of this. The Bitcoin mining network consumes about 1 % of global electricity. The problem is that fossil fuels are indirectly being used to mine Bitcoin because we are burning coal and oil to produce electricity, which powers computers that mine Bitcoin. The carbon footprint? 36 million tonnes of CO2, which is the equivalent of putting an extra 2.5 million diesel cars on the road.
Russian artist Polarrana decided to release her new music as an NFT which she claims is carbon-negative. Supposedly, the sale of her music will not fund the Bitcoin global warming problem, but is rather an environmentally friendly transaction.
She kept in mind the Bitcoin carbon offset, so she came up with the NFT offset, which works to achieve the same goal: to make digital valuables environmentally friendly and to reduce the carbon footprint of acquiring digital wealth altogether.