The central theses
- FTX announced its plans to go carbon neutral last night, starting with a $ 1 million donation to carbon offsetting organizations.
- BitMEX made a similar commitment to offset its emissions a few hours after FTX released the update.
- The crypto room was re-examined by concerned environmentalists this week after Elon Musk announced that Tesla would suspend Bitcoin payments due to the asset’s environmental impact.
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FTX and BitMEX will become climate neutral. The exchanges have undertaken to donate fees to offset emissions.
Exchanges undertake to become climate neutral
FTX and BitMEX are committed to becoming climate neutral.
FTX released a notice yesterday evening confirming its plans to offset its emissions. The exchange, which is operated by well-known crypto trader Sam Bankman-Fried, said it would initially donate $ 1 million to offset the blockchain resources it uses. “Together we can make the world a better place, and that doesn’t mean we have to give up what we believe in, ”Bankman-Fried tweeted.
Together we can make the world a better place, and that doesn’t mean we have to give up what we believe in.
FTX goes climate neutral and donates $ 1 million to offset the blockchain resources used.
This is how we can make the world greener. And so we can continue to advance crypto. https://t.co/Uqz8DqUNGJ
– SBF (@SBF_Alameda), May 20, 2021
BitMEX followed FTX’s example within a few hours of the update and wrote a blog post under note that cryptocurrencies and energy consumption have recently come under scrutiny – with vastly different views and the accuracy of information.
The exchange has confirmed that it will take several steps to achieve carbon neutrality, starting with paying fees to offset the emissions caused by withdrawals. The company has promised to donate $ 0.0026 for every dollar of blockchain fees a customer pays to withdraw their funds, based on calculations Bankman-Fried posted on Twitter. Organizations that can be partnered with are also being examined, according to the blog post.
The post concluded by encouraging other crypto companies to commit to the same pledge, adding:
“Offsetting carbon emissions isn’t the only answer to crypto footprint concerns, but it is certainly a good start. We believe crypto is a great force for good in the world, but the industry needs to come together and face challenges that could distract our positive intentions. ”
The environmental impact of crypto was a particularly hot topic last week after Elon Musk announced that Tesla would stop Bitcoin payments. Musk continued to criticize the impact of mining the asset and free fall the market. Fans of the currency responded by pointing out that 75% of Bitcoin mining is from renewable sources, though that was still not enough to change the overarching narrative.
Meanwhile, Ethereum published a blog post claiming that switching to proof-of-stake would cut emissions by 99.95%. The second blockchain currently uses an energy-intensive proof-of-work consensus algorithm, similar to that of Bitcoin. Various other cryptocurrency chains such as Fantom and Polygon are already using proof-of-stake. As environmental concerns about proof-of-work escalate, proof-of-stake networks could become more of a focus in the future.
Disclosure: At the time of writing, the author of this role owned ETH, ETH2X-FLI, MATIC, and several other cryptocurrencies.
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