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Souvenir tokens representing cryptocurrency Bitcoin plunge into water in this illustration taken May 17, 2022.
Souvenir tokens representing cryptocurrency Bitcoin plunge into water in this illustration taken May 17, 2022. Reuters / DADO RUVIC

Over the last ten years, cryptocurrencies have successfully evolved from internet currency to an increasingly globalized monetary network. There is, however, one catch, particularly with Bitcoin—the process by which the network is secured, known as "mining," is energy-intensive. As a result, there are growing concerns associated with an increasingly large carbon footprint.

Recent studies have shown that over the last year, the Bitcoin network's estimated energy consumption amounted to 123 Terawatt Hours (TWh) or 123 billion kWh. Simply put, Bitcoin alone uses more energy than 185 countries and is comparable to the annual energy consumption of Norway.

This negative side to cryptocurrency mining has allowed its detractors to argue how this new form of digital currency is harmful to the environment.

Long-term sustainability leader Brad Van Voorhees, co-founder of SBS, describes the current situation as a crossroads of sorts for Bitcoin mining—where it will either remain permanently stuck with a negative environmental narrative or become our planet's most sustainable asset class.

He shares, "We are currently positioned at the intersection of climate science and bitcoin mining. With this in mind, what we intend to do is to bridge the gap between the two and, in the process, promote institutional adoption of bitcoin alongside climate action."

This is where SBS fits into the picture. The company has developed an elegant solution—a non-coercive market mechanism that can further incentivize the decarbonization of the Bitcoin network by encouraging the use of clean energy and driving systemic change in the entire network.

The company has created a new token called the Sustainable Bitcoin Certificate (SBC), which are on-chain representations of 'Proof of Sustainable Mining' practices, and are awarded to miners using verified clean energy sources.

He adds, "Issuing Sustainable Bitcoin Certificates for bitcoin mined with clean energy allows SBS the opportunity to create a premium on sustainable mining practices and drive behavioral change among bitcoin miners."

The SBS protocol offers miners who use verified clean energy one SBC for every BTC they mine. SBCs have perfect parity with Bitcoin. There will only ever be 21 million of them, and each SBC is divisible by 100 million Kyotos.

SBS aims to increase awareness of these concerns and the likely solutions they offer while also focusing on the sustainable practices of today's Bitcoin miners.

Van Voorhees adds, "Bitcoin is the most powerful financial innovation in modern history, but the exponential increase in energy consumption is a risk to the network. Therefore, it is imperative that we create incentives to use clean energy sources. In many regards, SBS is a bridge between miners using verified clean energy sources and investors. Therefore, ESG and other institutional investors who wish to own Bitcoin with an added assurance of sustainable mining will see value in SBCs."

In addition, Max Song, a data scientist with degrees from Brown University and a Schwarzman Scholar of Tsinghua University who is also a co-founder of SBS, states, "The protocol has been carefully designed not to disrupt the fungibility of Bitcoin in any way. This preserves fungibility, one of bitcoin's core tenets. The SBC is an innovative tool for institutional investors and asset managers who hold Bitcoin yet have ESG requirements that need to be met. SBS isn't looking to replace Bitcoin; quite the contrary, we want to accelerate its adoption as the world's most sustainable asset class.

The most serious ESG investors will be able to trust the credibility and integrity of SBCs—because SBS will be regulated and governed by a Decentralized Autonomous Organization (DAO), where the world's leading climate science and academic institutions will constitute a significant portion of the decision-making governance. These climate experts ensure that SBS is following best practices and is aligned with science-based climate targets.

"SBS is the first-ever on-chain, multi-stakeholder sustainability effort. The organization endeavors to help Bitcoin become our planet's most sustainable asset class," Van Voorhees said.

Sustainable Bitcoin Standard has already caught the attention of NASDAQ-listed Bitcoin miner CleanSpark, who recently announced a partnership with SBS and saw the initiative as the first step toward cleaning up the image of Bitcoin. SBS will play a role in supporting the Bitcoin network and help others see that Bitcoin can be a tool for energy justice and financial inclusion.

Media Contact: Brad Van Voorhees

Contact Info: info@sustainablebtc.org