The

Sustainable Bitcoin Standard

Initiative
01
THE PROBLEM
 The Problem

As Bitcoin adoption accelerates, the energy

required to power the network has
exponentially accelerated. Hal Finney, a pioneer of of the first reusable proof-of-work system, was
a close collaborator of Satoshi, and the recipient of the first Bitcoin
The carbon footprint of Bitcoin is contributing transaction. Hal tweeted his concerns about the long term CO2
to climate change, while simultaneously emissions from widespread bitcoin implementation not long after
Bitcoin started.
creating an existential threat to Bitcoin due
to an increasingly negative perception from
media, society, and governments.
 The Problem

On one hand, there is growing

institutional Interest in owning
bitcoin for corporate treasury
management, as a alternative
investment asset and store of
value …..
 The Problem

However, there is
simultaneously a
sweeping global
awareness of ESG
disclosure, putting
pressure on companies
and investors to
monitor the
environmental impact
of their investments
and holdings
The interplay of the two is high profile concerns
around the carbon emissions associated with
bitcoin for treasury management
“Musk’s espousal of bitcoin exhibits very
questionable judgment. It is hard to see how
shares in Tesla can remain in any green
portfolio while the company is investing in
bitcoin. Yet at present, it has an “A” ESG
rating from the index compiler MSCI.”
“The environmental idiocy of Tesla’s bitcoin bet”
Jonathan Ford, Financial Times
02
THE PROPOSAL
 Proposal
DEFINING A SUSTAINABLE
BITCOIN STANDARD

To create a respected, international standard that will drive

traceable sustainability in bitcoin production and transfer and
address the critical concerns that the international community
have raised about Bitcoin, and in turn strengthening the long
term viability of the network.
Our Ambition
Using the Sustainable Bitcoin
Standard, we aim to have the
Bitcoin network reach carbon
neutrality by 2025 (perhaps even
before the finance sector)
 A Growing Problem of Energy Consumption

As Bitcoin adoption accelerates, the

energy required to power the network
has exponentially accelerated. The
carbon footprint of Bitcoin is
contributing to climate change, while
simultaneously creating an existential
threat to Bitcoin due to an
increasingly negative perception from
media, society, and governments.
Why now?
Bitcoin has the unique opportunity to be
one of the first totally carbon neutral
industries in the world. Doing so will
benefit all stakeholders and the long
term viability of Bitcoin, as well as set a
precedence for climate leadership
What is the carbon footprint of Bitcoin?
 What is the carbon footprint of Bitcoin?
Electricity Consumption (TWh), 2019

Bitcoin
Norway Pakistan
UK
124 Greece
124 90
301 54 New
Zealand

41

Source: Cambridge US
Bitcoin Consumption 3,990
Index
Standing Up the Sustainable Bitcoin Standard

The Sustainable Bitcoin Standard (SBS) will MEMBERSHIP

be structured as a Swiss based not-for-profit COMMITTEE
Foundation with assistance from CAGI
(Centre d'Accueil de la Genève
Internationale) SBS FINANCIAL

SBS will have three subcommittees. These BOARD COMMITTEE

committees bring together representatives

from the organization's members and
TECHNICAL
external stakeholders who have a strong COMMITTEE
overall understanding of crypto and the
larger sustainability agenda.

SBS Stakeholder Council: The Stakeholder Council is made up of crypto and fintech leaders, as well as
climate scientist experts, NGOs leaders, governmental bodies and academic institution representatives,
who will meet quarterly to discuss how SBS can effectively respond to new developments in the rapidly
evolving crypto and sustainability space.
 SBS Members
Multi-stakeholder representation

Wendy Writer Ronny Reader Abby Author Berry Books

Leading Bitcoin/Crypto Miners, mining pools, and Climate Scientists, Public Policy and
Companies and individuals energy producers Universities, NGOs, International Organizations
Environmental
Sustainability leaders
 Stakeholders Value Creation
Bitcoin Companies
- Risk-off by reducing negative
press, government and NGO
concerns over carbon footprint
- Allow ESG corporates and
investors to add BTC to their
balance sheets
- Strengthen Bitcoin’s position
as a better system than legacy
financial systems
Miners Climate Scientists Public Policy
- Receive a small premium - Contribute to the development of a - Engage with one of the
for mining Carbon Neutral standard that will drive carbon neutrality fastest growing and
Bitcoin, further in next generation financial sector most important sectors
incentivizing them to use - Drive renewable energy adoption by of the digital economy
renewable energy accelerating a lucrative industry driven
by renewables
 Sustainable Bitcoin Standard Leadership
Max Song
Wendy Writer
Max has worked as a data
scientist, investor and
entrepreneur. He purchased BTC
in 2014, attended Schwarzman
College, invested in digital assets
for family offices, and founder of
climate fintech Carbonbase.
Brad van Reader
Voorhees
Ronny
Brad has nearly a decade of
experience implementing
sustainability and energy
efficiency in highly complex
global supply chains. He is a
passionate bitcoiner, global
connector, and entrepreneur.
AbbyJohn Ching
Author
John is a chartered mechanical and
energy engineer with nearly a
decade of experience at one of
Asia’s largest utility companies. He
leads teams to design and build
megawatt scale low carbon energy
systems, from Gas turbines to
Wind turbines.
More to be
Berry announced
Books
We are building a global team of
technologists, bitcoin
industrialists, sustainability
experts, and standard creators to
develop Sustainable Bitcoin
Standard in accordance with the
highest credibility and influence.
 FRAMEWORK
TO CREATING
CARBON NEUTRAL BTC

March 20XX July 20XX

Defining the Methodology
There are two fundamental types of Sustainable bitcoin that can be created

- Neutral at Source: Bitcoin that is verified to have been generated from renewable
electricity, is deemed neutral-at-source
- Neutralized Post Production: Bitcoin that is generated from regular fossil fuel energy
consumption, but has its carbon footprint neutralized by the cancellation of carbon
credits, is deemed neutralized-post-production

Defining the Fungibility Problem:

- Because Bitcoin is transferred as a transaction centric UTXO model on the network, and
multiple transfers of bitcoin are mixed together into a common address, “green” (carbon
neutral) Bitcoin and “red” (carbon emitive) Bitcoin will be mixed together and become
impossible to separate.
- In order to address the fungibility problem, the mechanism of Certificates will be used,
similar to the model of Renewable Energy Certificates, SBS will issue Sustainable Bitcoin
Certificates (SBC)
Defining a Sustainable Bitcoin Certificate (SBC)

A Sustainable Bitcoin Certificate (SBC) is an authenticated instrument issued by the Sustainable

Bitcoin Standard that allows holders to claim carbon neutrality for the BTC held in their
possession

- In the case of neutral-at-source, a SBC will be issued to verified miners using renewable
energy for every BTC they create
- In the case of neutralized-post-production, a SBC will also be created every time a BTC
has been neutralized using the cancellation of carbon credits
- SBCs will exist as tokens (potentially ERC20) on the blockchain, and will be transferable
between miners, brokers and institutional buyers
- SBCs may be listed and traded on exchanges, with prices set by the market (similar to
Renewable Energy Certificates)
- Institutions can co-purchase SBCs along with Bitcoin in order to hold carbon neutral
bitcoin
 1. Renewable Electricity is used to mine BTC
2. Miner applies to SBS for Certification
3. SBS verifies green mine and mints SBC for
distribution
4. Carbon conscious investors buys SBCs as
an offset to their BTC holdings
5. SBCs can be traded on exchanges

Neutral-at-Source: 5

Green mine
4
verification leads to
minting of SBC
(Sustainable Bitcoin Certificate)

3 2 1
 1. Non-renewable energy used to
mine BTC
2. Miner applies to SBS for
Certification
3. SBS uses carbon credits to offset
bitcoin carbon footprint
4. SBS mints SBC for offset bitcoin
6 5. ESG conscious investors buy SBC
6. SBC can be traded on exchanges

Neutralized-Post-Production 5

Red BTC is offset by

carbon credits, leading to
2 1
minting of SBC 4
(Sustainable Bitcoin Certificate)

3
Addressing Bitcoin’s Transaction Footprint

Each of Bitcoin’s blocks also carry roughly 2000 transactions of bitcoin transfers. By attributing the
transactions to block number, we can time-stamp the block that each transaction was approved in, to
calculate the mining difficulty associated with the block, and the corresponding energy consumption
required to solve that block

Transactions that are approved by verified miners using renewable energy can claim the “miner
transaction” fees as neutral-at-source, and fractional shares of SBC can be attributed to the miner

Transactions that are approved by fossil-fuel miners will not generate SBCs

In the future, SBS will work to develop clients for wallet and exchange interfaces that allow users to
estimate and neutralize the carbon footprint of their bitcoin transfers at moment of transfer, by
purchasing and destroying SBCs*

(Imagine a scenario in which a Binance user chooses to offset their BTC transfer, and SBCs are traded on
Binance as a SBC/BTC pair. Binance can help the user purchase equivalent amounts of SBC as the BTC
transfer fee, and remove that SBC out of circulation)
 Pathway to Launch of Sustainable Bitcoin
Standard

Board of Alignment on
Formation of SBSI Pilot Process Go Live
Advisors Standard
Step 3

Step 1
A not-for-profit Multi-stakeholder Board of advisors A pool of miners will SBS will open the
membership board of advisors will together with SBS selected to pilot the standard to any bitcoin
association (SBS) will be formed to guide the team will finalize the standard creation, miner around the world
be stood up with the development of the technical components certification generation who wishes to verify or
assistance of a small standard of the standard from and auditing process, create carbon neutral
group of founding verification to and the first batch of bitcoin
members. brokerage of the SBC SBTC will be created
 Potential Founding Members

Exchanges Asset management Institutional Mining

Financial Sustainability of SBS

● Endowment Foundation
● Verification fees of neutrality for “green” miners
● Annual Membership dues of members
● Small premium on renewable minted coins
● Government Funding and Research Grants for sustainable
standards
○ (HORIZON 2020, Green New Deal, the EU Green New
Deal, Swiss State Secretariat for Economic Affair)
Support Us:
XXXXX (BTC address)
Potential Funding Sources

In addition to our members’ financial and in-kind contributions, the Sustainable Bitcoin
Standard will also apply for grants from the following institutions for research grant funding:

The Bitcoin Clean Energy Investment Initiative (by Square) >

Bill and Melinda Gates Foundation >
The Musk Foundation
X Prize Foundation
State Secretariat for Economic Affairs, Switzerland (SECO) ›
Business for Social Responsibility ›
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH ›
eco.business Fund Development Facility ›
Ford Foundation ›
Global Environment Facility ›
Ministry of Foreign Affairs, The Netherlands ›
The David and Lucile Packard Foundation ›
World Wildlife Fund Inc. (WWF)
APPENDIX
APPENDIX 1A: Miner Registration and Verification

● Miners can apply to join Sustainable BTC Standard (SBS)

● Miners will be asked to submit the following information:
○ Contact information
■ Executive details
■ HQ address
■ Address of Mine (including coordinates)
○ Power bill/power sales contract
■ Source of the power generation/contract from generation plant
■ Power consumption of mining rigs
■ Energy Source
○ Traceable set of electrical schematics of their domicile that shows connectivity to the point of sale
■ including rigs and cooling facilities connection (must be authorized and on the books)
○ Mining Pool and Electronic Addresses
■ Mining rig IP addresses and pools wallet addresses (full list)
■ Annual mining capacity
○ Total annual power consumption of the mine, including auxiliary loads such as cooling, lighting, etc
■ Power bills proving the above.
○ Distribution channel:
■ Prime brokerage, direct institutional sales team
APPENDIX 1B: Third Party Auditing

On-site auditing of bitcoin mines and energy sources will be

conducted by qualified third-party auditing firms such as PWC,
EY, KPMG, PricewaterhouseCoopers, Elevate, etc. Third party
auditors will be approved by the SBS Technical Committee.

Audit reports will be recorded on a blockchain ledger maintained

by the SBS Technical Committee
APPENDIX 1C: Carbon Emission Calculation

Top Down Calculation

● References to global energy consumption estimates
● References to regional energy mix inside power grid, and emission factors associated
● Calculates “carbon” emissions of average bitcoin for neutralization

Bottom Up Calculation
● Calculate Gross Energy consumption at mining facility per month (kWh/Month) = A
● Estimate Carbon intensity of power source (T/kWh) = B
○ Define Single source vs from Grid
● Define Mining capacity (virgin BTC/month) = C
● Tonnes of carbon/BTC = (A x B)/C
APPENDIX 1D: Carbon Credit Cancellation

Voluntary carbon credits will be used to neutralize the existing

emissions of fossil-fueled mined Bitcoin based on a rigorous selection
process. Canceled credit records will be maintained by the foundation
and associated with the bitcoin that have been cancelled against
● Registries: We will screen projects that have been registered and accredited by the
Gold Standard (founded by WWF) and Verra (founded by WEF) respectively
● Additionality: We work with projects with high "additionality" - meaning that the money
from the projects have direct actionable impact to increase the scope of the project, and
that the emission reduction solution would not have happened otherwise.
● Sustainable Development Goals: We select projects that have been shown to create
positive co-benefits along the Sustainable Development Goals (SDGs) for the
communities in which they are implemented, catalyzing system-thinking solutions and
positive externalities.
● Past Track Record: Each project through an internal review and assessment process,
studying their total track record, and prioritizing projects and developers that have
shown consistent delivery on high quality outcomes.
 APPENDIX 2: Value Chain of green BTC

Sustainable Bitcoin Standard Foundation

● Validate and “create” or “trace” the green BTC
● Collect green premium from buyers, and train educators for
“green mining”, as well as distribute as incentive to miners
● Gives SBS (on the blockchain) to Corporates and individual holder
to authenticate their holding of carbon neutral BTC

Miners OTC Exchanges Corporates

● Receives green ● Pay “green ● Pay “green premium” ● Pay “green

premium for SBC
● Role: Creates Bitcoin
ideally w/ renewable
energy
● Ex: Bitmain, F2Pool,
Crusoe, AntPool,
Canaan, Bitfury
premium” for SBC for SBC premium” for SBC
● Role: Offer large ● Role: Offer green BTC ● Role: purchase
buyers green BTC to retail investors and green BTC and be
● Example: OSL, mass market ESG compliant
Grayscale, Blockfi, ● Ex: Coinbase, Binance, ● Ex: Microstrategy,
Genesis Trading, Kraken, Gemini, Tesla, Square,
DRW Bitstamp Apple,
APPENDIX 3: Future Work

EDUCATION

● Bitcoin
● Climate change
● Sustainable Bitcoin Mining

ADVOCACY
● Government and public advocacy supporting sustainable bitcoin
● Retail facing sustainable bitcoin awareness

CONSULTING
● Renewable energy
Let's try to protect everything that's important to us.
- Nick Szabo

JOIN THE MISSION

membership@sustainablebitcoinstandard.org

GET IN TOUCH
info@sustainablebitcoinstandard.org

CONTRIBUTE
XXXXX (BTC address)
 It’s the same situation as gold and gold mining. The
marginal cost of gold mining tends to stay near the price
of gold. Gold mining is a waste, but that waste is far
less than the utility of having gold available as a medium
of exchange.
I think the case will be the same for Bitcoin. The utility
of the exchanges made possible by Bitcoin will far
exceed the cost of electricity used. Therefore, not
having Bitcoin would be the net waste.
- Satoshi Nakamoto