BitMEX bought $100,000 worth of carbon credits, representing 7,110 metric tons of carbon dioxide emissions, enough to offset its bitcoin carbon footprint for the next year, the crypto exchange said in a blog post.
- The credits will match the environmental footprint from both its bitcoin transactions and the servers powering the exchange, making it the first crypto exchange to become fully carbon neutral, BitMEX said in the post.
- BitMEX published the reasoning behind the conclusion in a separate post. The best way to approach carbon emissions for crypto exchanges is to figure out “how much electricity usage is incentivised per US dollar spent on transaction fees,” and then calculate the carbon emissions based on that, it said.
- The “imperfect method” the exchange used then was to compare the average electricity cost in kilowatt hours for bitcoin mining with the global average cost per kWh of electricity.
- Based on global prices, it found that every $1 spent on transaction fees could “incentivize” up to 7.4 kWh of “typical electricity usage,” which in turn means every $1 spent on bitcoin transaction fees incentivizes 1 kilogram of CO2 emissions.
- This method should amend one proposed by FTX founder and CEO Sam Bankman-Fried in a May tweet, BitMEX said.