BitMEX said that the community needs to ramp up Bitcoin’s [BTC] transactional throughput with better technology and not by increasing the block size limit amidst the ongoing debate about the cryptocurrency’s environmental footprint.
In the wake of Elon Musk’s recent comments about Bitcoin’s impact on the environment, the crypto derivatives platform, BitMEX has announced a commitment to carbon neutrality. The platform acknowledged the growing scrutiny on digital assets and their energy consumption.
@elonmusk is right…
The community needs to improve Bitcoin's transactional throughput, not with blocksize limit increases, but with better technology.
This improves Bitcoin from certain enviromental perspectives and crucially also makes Bitcoin more useful
⚡️⚡️⚡️
— BitMEX Research (@BitMEXResearch) May 21, 2021
In line with the commitment, BitMEX will start by offsetting emissions related to withdrawals from its platform by donating a minimum of $0.0026 for every $1 of blockchain fees its client’s payout.
The exchange said that it was still researching the most effective organizations through which it could conduct the initiative. BitMEX will disclose the details of this and how much is donated in due course.
FTX Does The Math For BitMEX
The exchange came up with the above figures after another crypto operator, FTX’s CEO Sam Bankman-Fried crunched the numbers and found out how much electricity Bitcoin and Ethereum, and other proof-of-work-based [PoW] tokens use up to mine.
The exec took factors such as mining and electricity costs into account while estimating and came up with a ratio of $0.0026 for every $1. This meant that of every $1 spent to mine PoW crypto, $0.0026 worth of carbon is emitted.
The exchange operator also roughly calculated that it will pay $60 million in blockchain fees in 2021. This sums up a total of $150,000 in carbon offsetting expenditure. Considering the errors and uncertainty in the estimations, FTX revealed its intention to donate $1 million this year to carbon offsetting initiatives such as Cool Earth.
The exchange also admitted that carbon offsetting is not the only solution to challenges pertaining to the “outrageous” carbon footprint of cryptocurrencies. However, it was a good start.
Following the news, BitMEX Research revealed that the adoption of Bech32 addresses and SegWit. Withdrawals will now have lower fees & therefore the incentive to use energy and potentially damage the environment will decrease. It has also recognized the need for a more strong response from the industry and hence encouraged other players in the industry to come on board too.
On that note, BitMEX stated,
“We don’t pretend to have the answers but we know that it’s our responsibility to take some positive action. Credit to SBF for doing the maths on this, and we have no shame in copy and pasting this positive initiative.”
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