Definition ∞ Emissions offsetting involves compensating for greenhouse gas emissions generated by an activity, such as cryptocurrency mining, by funding projects that reduce or remove an equivalent amount of emissions elsewhere. This practice typically utilizes carbon credits, where each credit represents one tonne of carbon dioxide equivalent prevented or removed. The goal is to achieve carbon neutrality or a net-zero environmental impact. It functions as a mechanism for organizations to address their carbon footprint.
Context ∞ In the context of crypto news, emissions offsetting is a prominent topic related to the environmental impact of proof-of-work blockchains like Bitcoin. Critics often highlight the substantial energy consumption associated with mining, prompting discussions about sustainable practices. Projects and protocols increasingly explore offsetting strategies or transition to less energy-intensive consensus mechanisms, such as proof-of-stake. The integrity and verification of carbon credit markets are key areas of ongoing debate and development within this space.
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