Digiconomist: Making Bitcoin Sustainable

Raising awareness of bitcoin’s damaging environmental impact.

The Problem

In 2008 Satoshi Nakamoto invented the digital currency Bitcoin. Bitcoin was revolutionary in the sense that it allowed us to do money without needing banks or governments, as a peer-to-peer payment network. We might pay a high price for such a system, as it has a dirty secret. The network depends on massive amounts of energy-guzzling computing power, even though it’s processing only a very limited number of payments. In fact, the total Bitcoin network uses more fossil fuel-based electricity — and has a larger carbon footprint —than a small country, making each transaction on the Bitcoin network thousands of times more energy-intensive than a traditional electronic payment. But if you’re using Bitcoin to make payments, you’ll never be confronted with these energy costs. As a result, there’s limited pressure on the ecosystem to make a change.

The Solution

Digiconomist, a platform that provides in-depth analysis, opinions and discussions of Bitcoin and other cryptocurrencies, created the Bitcoin Energy Consumption Index to raise awareness around bitcoin’s environmental impact and the unsustainability of the process that underpins it. The Index, the first real-time estimate of the energy consumed by the Bitcoin network, also functions as a prediction model for future Bitcoin energy consumption, which is only expected to rise, further harming the environment. Increasing awareness will put pressure on Bitcoin’s developers to make the protocol more environmentally friendly, but it is only a first step. The second is to promote the subject among academics and researchers, and contribute to quality research, to aid in finding a sustainable solution to Bitcoin’s extreme energy need.

Stage of Development

  • Early Stage
  • Established Prototype
  • Scaling
  • Other

Organization to Receive Funds

Digiconomist

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