Bitcoins are produced through Bitcoin mining which is performed by high-powered computers solving complex computational math problems. The process of bitcoin mining is an extremely high electricity consumption process with “around 110 Terawatt Hours per year — 0.55% of global electricity production, or roughly equivalent to the annual energy draw of small countries like Malaysia or Sweden” according to the Cambridge Center for Alternative Finance (CCAF).
Due to this high energy consumption and the rapidly growing disquiet of institutional investors surrounding the environmentally unfriendly bitcoin production several initiatives geared towards encouraging a “greener” bitcoin have been triggered. One such initiative from the UN Sustainable Development Goals (UN SDGs), ‘Green Bitcoin Project,’ provides a fully transparent purchasing of renewable energy certificates (REC) to manage and track energy consumed from renewable power sources, as RECs are legal proof that energy has been generated from renewable electricity sources like solar or wind power. The UN SDGs considers blockchains a key technology to generate secure solutions for turning environmental challenges into opportunities through their transparency, traceability, and operational efficiency.
As RECs allow energy consumers to verify the renewable claims associated with power production and consumption are adherent to international best practices, regardless of one’s role (i.e., institutional cryptocurrency investor, retail crypto holders, application developer, crypto service provider, or an exchange), the Green Bitcoin Project would enable the purchasing of energy produced through renewable energy sources equal to the energy consumption used to create and maintain the cryptocurrency holdings. Additionally, GBP incorporates a retrospective solution to decarbonize legacy Crypto holdings. As Green Bitcoin Project CEO, Sergey Shayakhmetov has commented, “e are excited to act on the goals of the UN SDGs and be an accelerator to decarbonize crypto assets.”