Key Takeaways
- FTX announced its plans to go carbon neutral last night, starting with a $1 million donation to carbon offsetting organizations.
- BitMEX made a similar pledge to offset its emissions a few hours after FTX posted the update.
- The crypto space has faced scrutiny from concerned environmentalists once again this week after Elon Musk announced that Tesla would halt Bitcoin payments due to the asset’s environmental impact.
FTX and BitMEX are going carbon neutral. The exchanges have pledged to donate fees to offset emissions.
Exchanges Pledge to go Carbon Neutral
FTX and BitMEX have committed to becoming carbon neutral.
FTX posted a note confirming its plans to offset its emissions late last night. The exchange, run by prominent crypto trader Sam Bankman-Fried, said it would start by donating $1 million towards offset the blockchain resources it uses. “Together we can make the world a better place, and it 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 it doesn’t mean we have to give up what we believe in.
FTX is going carbon neutral, donating $1m to offset the blockchain resources it uses.
So we can make the world greener. And so we can keep pushing crypto forward. https://t.co/Uqz8DqUNGJ
— SBF (@SBF_Alameda) May 20, 2021
BitMEX followed FTX’s lead within a few hours of the update, penning a blog post noting that there had been “huge scrutiny on cryptocurrencies and energy consumption recently – with wildly divergent views and accuracy of information.”
The exchange has confirmed that it will be taking several steps towards achieving carbon neutrality, starting with paying fees to offset emissions caused by withdrawals. The firm has promised to donate $0.0026 for every $1 of blockchain fees a customer pays to take out their funds, based on calculations Bankman-Fried posted on Twitter. According to the blog post, it’s also researching organizations to partner with.
The post concluded by encouraging other crypto companies to commit to the same pledge, adding:
“Carbon offsetting is not the only answer to concerns relating to the environmental footprint of crypto, but it’s certainly a good start. We believe that crypto is a huge force for good in the world, but the industry has to come together and tackle challenges that risk sidetracking our positive intentions.”
Crypto’s environmental impact has been a particularly hot topic over the last week after Elon Musk announced that Tesla would halt Bitcoin payments. Musk went on to criticize the impact of mining the asset, sending the market into freefall. The currency’s fans responded by pointing out that 75% of Bitcoin mining comes from renewable sources, though that hasn’t been enough to change the overarching narrative just yet.
Meanwhile, Ethereum published a blog post claiming that moving 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 the one that Bitcoin uses. Various other cryptocurrency chains like Fantom and Polygon already use Proof-of-Stake. If environmental concerns over Proof-of-Work escalate, Proof-of-Stake networks could start to take more of the spotlight in the future.
Disclosure: At the time of writing, the author of this feature owned ETH, ETH2X-FLI, MATIC, and several other cryptocurrencies.
