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Will Cryptocurrencies Become Carbon-Neutral in the Future?

Cryptocurrencies are seen to create a more eco-friendly way to transact. More companies now aim to reduce their carbon footprint and create a better ecosystem for future generations. Industry leaders are constantly looking for ways to decrease their energy usage.

Even though crypto does not use as much energy as traditional methods of banking, crypto companies are exploring ways to reduce the amount of energy it uses. Will crypto see a more carbon-neutral future? It is possible. Here is how crypto is reducing its carbon transmission and helping the environment.

How is crypto becoming carbon-neutral?

Mining crypto takes a portion of energy and as crypto trading rose, so did environmental concerns. Crypto energy usage is seen to be higher in populated countries that see a lot of crypto activity such as India and the US. To reduce energy usage, many crypto companies and industry leaders from these leading countries are exploring sustainable options. These options include:

  1. “Greener crypto” — Reducing the carbon emissions of crypto mining through the use of greener crypto
  2. “Carbon credits” — Taking action to compensate for the carbon usage in crypto trading

Crossing over to “greener” cryptocurrencies

There are already “greener” cryptocurrencies such as Cardano, which uses a Proof-of-Stake (POS) model to operate. The POS model requires less energy and helps to reduce the carbon footprint of crypto mining. Larger cryptocurrencies such as Ethereum are planning to move to a complete POS stake model in the future. If other currencies follow its lead, it can certainly pave the way for a greener approach to crypto mining.

The creation of greener tokens

The leading source of crypto, Bitcoin, has a lot of technical challenges that make it difficult to cross over to the greener side of POS. Even though it is the leader, more users are turning to alternative sources of crypto investment due to the viability of Bitcoin. More cryptocurrencies crossing over to the POS model will mean that more greener tokens will be created in the future. Users of these sustainable forms of crypto can possibly even out the Bitcoin user rate.

Compensation for crypto carbon use

Another way that crypto attempts to become carbon neutral is through the use of carbon offsets. Carbon offsets occur when companies compensate for the amount of carbon they use to help the environment. There are platforms that achieve this such as Bitcoin Zero and ClimateCoin which contribute carbon credits each time crypto is mined for the fight against climate change.

How does carbon credit work?

If a country exceeds its carbon usage during mining activities, it has to purchase carbon credit. Once carbon credit is equal to roughly one ton of carbon dioxide emissions. The money is used to help projects that aid the environment. With the rise of carbon credit, there will be more money for companies and industry players who find sustainable methods of crypto mining and trading.

The carbon-neutral future of crypto

As we can see there are many ways that crypto can become carbon neutral. The rise and usage of greener POS crypto lead to less energy usage in the crypto world. Where energy cannot be reduced, such as with Bitcoin mining, companies can make use of carbon-neutral methods such as carbon credit. Carbon credit will ensure that companies and key players that are involved in greener initiatives are funded. The result is a reduction and balancing of carbon emissions involved in crypto trading.

With greener crypto being produced yearly and research constantly being done on sustainability, it is no doubt that crypto is on the way to a carbon-neutral future.

If you’re looking for a greener options, you can choose from hundreds of coins available on Your Friendly Crypto Exchange. Register on IXFI and be part of the change towards a better future.

Disclaimer: The content of this article is not investment advice and does not constitute an offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives and specific financial and fiscal circumstances.

Although the material contained in this article was prepared based on information from public and private sources that IXFI believes to be reliable, no representation, warranty or undertaking, stated or implied, is given as to the accuracy of the information contained herein, and IXFI expressly disclaims any liability for the accuracy and completeness of the information contained in this article.

Investment involves risk; any ideas or strategies discussed herein should therefore not be undertaken by any individual without prior consultation with a financial professional for the purpose of assessing whether the ideas or strategies that are discussed are suitable to you based on your own personal financial and fiscal objectives, needs and risk tolerance. IXFI expressly disclaims any liability or loss incurred by any person who acts on the information, ideas or strategies discussed herein.




IXFI is the first crypto trading platform that serves as a complete alternative to banks. We designed IXFI with one goal in mind: to meet our users’ needs and expectations.

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