AMSTERDAM, Dec. 20, 2021 /PRNewswire/ -- EcoPenguin, the world's first carbon offsetting platform in the cryptocurrency space, is partnering with the non-profit Carbon Offsets to Alleviate Poverty ( COTAP.org), the first carbon offset provider to accept all major cryptocurrencies. Together, they are providing the cryptocurrency community with convenient ways to take responsibility for its environmental footprint and mitigate its climate impacts.
EcoPenguin's mission is to help decarbonize cryptocurrency and build a thriving, eco-friendly crypto community. COTAP's mission is to empower individuals and organizations in developed countries to address climate change and global poverty simultaneously.
Cryptocurrencies are carbon-intensive and have a large climate impact, since they depend on high-powered computers to validate billions of transactions on a blockchain. Bitcoin currently accounts for 1% of global electricity consumption -- as much as entire countries - and it's still in its infancy and growing rapidly. It currently generates 95 Mt of carbon emissions a year, and 1000 kg for a single transaction . Bitcoin miners have even brought disused coal plants out of retirement to meet their energy needs.
Though Bitcoin has by far the largest carbon footprint, the problem is industry-wide. Ethereum has the next largest footprint, with annual emissions of about 46 Mt of CO2, and 100 kg per transaction . Next year it plans to switch from Proof of Work (PoW) to Proof of Stake (PoS) which analysts say could be 99.99% more energy efficient.
"EcoPenguin advocates shifting to PoS as the best near-term path to decarbonization, but it won't happen immediately, and not everyone will do it," said EcoPenguin co-founder Joshua Aakash. "Before long we may also see a carbon tax of $40- $60 a tonne on major energy consumers, which might get reluctant crypto actors to take lowering their emissions seriously. But the regulatory approach would cost large tokens hundreds of millions of dollars and add considerably to the cost of transactions. It remains to be seen how these various approaches will play out. Meanwhile, by partnering with COTAP we're able to offer verified carbon offset solutions for crypto tokens, projects, traders, or anyone in the crypto space who wants to take responsibility for their carbon footprint here and now."
"Crypto is growing explosively, and it's urgent to head off its potentially massive climate impacts," said COTAP founder and CEO Tim Whitley. "Other burgeoning industries have become more efficient and greener as they've matured, and crypto can, too. Switching it to sustainable energy sources is the paramount goal, but that takes time, so in the interim offsetting is an important part of the solution. A lot of cryptocurrency offsetting activity today is speculative, and/or it converts carbon credits into tokens and keeps them tied up on the blockchain for years, as opposed to the tried-and-true approach of permanently retiring credits on existing carbon registries. The EcoPenguin concept really resonated with us because they share our belief that there's a huge crypto/carbon leadership gap, and that crypto can be a force for material good if it adopts the right approaches. So we're excited to be working together to bring the crypto community verified, high-quality offsets that will do tangible good today, creating real-world benefits for the climate and low-income communities."
COTAP's carbon offsets counteract carbon emissions with tree planting, agroforestry, and forest protection operations in Nicaragua, Uganda, India, Fiji, Indonesia, and Mexico. The projects are all located in areas where income levels are less than $2 per day.
COTAP offset projects are certified under Plan Vivo, the world's longest-standing voluntary standard for forest carbon. Plan Vivo stipulates that rural communities must own the carbon offset projects, and also that they must receive at least 60% of the revenues the projects generate. So in addition to verifiably sequestering carbon, COTAP offsets provide livelihoods and generate life-changing income streams in some of the world's poorest communities.
EcoPenguin and COTAP have structured the offset offerings to lower barriers to entry, maximize convenience, create positive incentives, and assure transparency and accountability. The EcoPenguin platform is completely free to use. EcoPenguin is building its own line of eco-friendly NFTs, funkypenguins.io, which automatically counteract their carbon footprint with COTAP offsets, to be launched on the EcoPenguin platform in January 2022. Users who purchase COTAP offsets on the EcoPenguin platform are acknowledged with an EcoPenguin NFT digital certificate. EcoPenguin is also designing a "green swap" mechanism, analogous to a tiny, voluntary crypto carbon tax, which allows users to swap tokens and add a small, fixed amount to each transaction for carbon offsetting. The resulting carbon savings will be tracked and jointly published on the EcoPenguin platform and COTAP.org, to verify that the carbon offset through EcoPenguin match the offsets purchased from COTAP.
In addition, there are potential tax benefits. For example, since COTAP is a non-profit, in the U.S. individuals don't pay capital gains tax on cryptocurrency used to purchase COTAP offsets, and depending on their income level and whether or not they itemize, they may also get an income tax deduction.
EcoPenguin is working with Inevitrade owner and crypto influencer Craig Percoco to inform the crypto community about carbon offsetting opportunities through Inevitrade's discord and youtube channels. "EcoPenguin will help fix a massive problem by working towards decarbonizing crypto," Percoco said, "while also aiming to offer multiple facets of long term utility in the NFT space; something that is mostly yet to be seen."
Among EcoPenguin's crypto partners are Block Ape Scissors , a metaverse token which is offsetting its carbon emissions on the platform, and LGCY Network , a PoS blockchain which which will offset all its carbon emissions through the EcoPenguin platform, so all projects and traders building and trading on the blockchain can trust that their climate impacts have been responsibly countered.
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