3.1 Bitcoin energy use – the big picture
When considering Bitcoin’s direct and indirect ESG impacts, it is important to be able to put the network’s energy use in context. There is a widely recognized carbon dioxide equivalent (CO2e) emissions gap (UNEP 2020; van Soest et al. 2021), the difference between the current and more conservative trajectories leading to 1.5° to 2.0° C warming. Bitcoin’s marginal impact on emission-reducing pathways is an important consideration when putting Bitcoin’s climate impact into context.
Efforts to quantify Bitcoin’s total and comparative energy use are underway[6] but more research will be needed to assess and integrate Bitcoin’s energy consumption into global energy market supply and demand forecasting (e.g., IEA 2021a; IEA 2021b). It will also be important to understand how rapid Bitcoin adoption could affect the speed of transition to renewable energy sources, including alternative low-emission fuels (IEA 2022b), or slowing the transition by extending the life of aging fossil fuel plants (e.g., Roeck and Drennen 2022) or economically marginal oil and gas drilling operations.
- How best can Bitcoin's future energy use be predicted?
- How much of the world’s currently wasted and stranded energy could be used for Bitcoin mining without increasing CO2e emissions?
- How will Bitcoin mining affect the flow of investment funds to renewable energy infrastructure, beyond what would happen through organic growth in renewable energy demand?
- What novel low-emissions energy and storage technologies might power Bitcoin mining in the future, and how would they compare to established energy technologies in terms of ESG impacts?
- How much otherwise unprofitable fossil fuel extraction and generating capacity might Bitcoin mining help keep in production?
- How do environmental damages caused by Bitcoin mining compare to those caused by gold and precious metals mining?
- How much energy does Bitcoin consume relative to legacy financial systems, and on which metrics might they be best compared?
- How can total historical Bitcoin carbon emissions be calculated, and can and should they be compensated for to make Bitcoin mining carbon neutral over its entire history?
3.2 Mitigating methane emissions
Methane (CH4) is emitted from both natural and anthropogenic sources and is potent, trapping about 25% more heat in the atmosphere than carbon[7]. About 60% of methane emissions originate from human activities; emissions from wetlands comprise a large proportion of the 40% originating from natural sources (Bousquet et al. 2006; Saunois et al. 2020). Of the human-caused emissions, agriculture, the energy sector, and waste disposal account for about 24%, 23%, and 12% of global emissions, respectively (IEA 2022a). Methane emissions are currently far higher than required to achieve global net zero emissions status by 2050 (IEA 2021b) but represent one of fastest and best near-term CO2e mitigation opportunities (Brandt et al. 2014; Nisbet et al. 2020).
In the oil and gas sector, methane can be vented, flared, or captured (Calel and Mahdavi 2020). Flaring still emits carbon but the relative impact on warming is significantly reduced because of carbon’s lower impact on warming relative to methane. Bitcoin miners can deploy container-based facilities to oil drilling sites, using waste methane to power high-efficiency generators and mining rigs. While not a long-term solution, or one that is applicable in jurisdictions where flaring is prohibited by law, Bitcoin mining does offer a solution that could help reduce emissions from venting, increase the efficiency of uncontrolled flaring, and generate cash flow to offset capital costs needed to reduce CO2e emissions from oil drilling. Mining could be particularly useful at remote oil drilling sites or, because of its revenue-generating incentives, in jurisdictions that currently have no anti-venting regulations.
Methane capture and flaring can also power Bitcoin miners deployed to landfills, potentially reducing methane emissions while generating revenue for operators (often budget-constrained municipal governments). There may also be unexplored opportunities for mining in conjunction with agricultural operations.
- How much methane can be mitigated by Bitcoin mining operations co-located with oil and gas wells?
- How could Bitcoin mining be used to most effectively reduce methane emissions from landfill sites and agricultural operations?
- How much time could large-scale, methane-based Bitcoin mining buy in the global energy industry’s transition net-zero CO2e emissions?
- How best can methane emission opportunities be prioritized so that Bitcoin mining deployment could have rapid and substantive impact?
3.3 Electricity grid transition
Bitcoin may affect electricity grid management because of Bitcoin miners’ ability to rapidly (i.e., within minutes) power up or shut down mining rigs. Grids use a combination of baseload energy suppliers (e.g., coal-fired plants, hydroelectric, nuclear) along with more flexible generation facilities (e.g., oil-fired plants), sometimes in conjunction with clients (e.g., steel mills) that can adjust their electricity consumption relatively rapidly during times of high overall grid demand. As new wind and solar installations, with their intermittent generating capacity, come online, grid operators need to have options, such as battery storage and Bitcoin mining, to rapidly manage risks arising from electricity supply and demand imbalances.
Wind and solar facilities often produce power in excess of grid needs and need to be ‘curtailed’ (prevented from adding electricity to the grid) when the market does not need the energy. The rationale for co-located Bitcoin mining is that miners can buy electricity directly (‘behind the meter’) from renewable energy producers when generating capacity exceeds grid demand. That is, bitcoin mining uses power that cannot be sold and would otherwise be curtailed – wasted – during periods of relatively low market demand (Niaz, Liu & You 2022a). Improving the profitability of renewable energy installations should allow for more extensive renewable build-out or the addition of new electricity storage infrastructure, thus helping to speed the renewable energy transition.
Grid operators can also contract Bitcoin miners as grid assets, meaning grid managers can switch mining rigs on and off within minutes, rapidly addressing imbalances between electricity supply and demand. In addition, pricing incentives can be used to shape miners’ behavior. For instance, if a miner had contracted to buy bulk electricity at a fixed price over a year, they are incentivized to stop mining when electricity demand is high. As electricity market prices surge, they can shut down mining rigs and sell their low-cost contracted power into the spot market to earn more than if it was used for mining[8].
- What combinations of contextual factors, including the presence or absence of Bitcoin mining, help a grid to successfully transition to renewable energy?
- How does the addition of Bitcoin mining affect the economic viability, net carbon emissions, and risk profile of electricity grids transitioning to renewable energy?
- How does the addition of Bitcoin mining to an electricity grid affect the need for new generation and transmission infrastructure investments?
- How do mandates about grid objectives and management responsibilities vary, and when and how can different types of Bitcoin mining strategies best help fulfill those mandates?
- How does Bitcoin mining affect electricity grid resilience in the face of extreme weather events or other shocks?
- How does large-scale Bitcoin mining affect electricity availability and costs for other electricity customers?
3.4 Bitcoin mining – site choices and costs
Understanding factors influencing Bitcoin’s cost-of-production is important for understanding miners’ site choices and their potential impact on energy use and carbon emissions, as well as on other UN Sustainable Development Goals (e.g., Parmentola et al. 2022). Miners are highly mobile, tending to cluster near sources of cheap energy (Sun et al. 2022). How Bitcoin mining compares to other mitigation and negative emissions technologies (e.g., Fawzy et al. 2020), in terms of the potential magnitude and cost of mitigation, may have substantial impact on how accommodating governments are towards Bitcoin mining. Ascertaining where mining fits along the carbon mitigation marginal abatement cost [MAC] curve (e.g., Vogt-Schilb et al. 2015) may be particularly useful. In some areas, Bitcoin mining may also help to bootstrap other kinds of mitigation technologies (Niaz, Shams, Liu & You 2022).
- What are the determinants of Bitcoin miners’ site, energy source, and technology choices, and how do changes in the availability or quality of those factors affect miners’ production strategies and mobility?
- How does the balance between small-, medium-, and large-scale miners affect Bitcoin’s net carbon emissions profile?
- How important are Bitcoin miners’ upstream and downstream carbon emissions relative to emissions from mining itself?
- How and why do Bitcoin's production costs vary globally, and how can they be assessed in the absence of financial reporting from private mining firms?
- What is the levelized cost (revenue required to build and operate a facility over a specified cost recovery period) of Bitcoin mining for different regions, technologies, and energy types?
- What is the marginal abatement cost of reducing greenhouse gas emissions by Bitcoin mining and how does that compare to other mitigation options?
- How do motives other than profit maximization influence Bitcoin miners' investment choices and production strategies?
- When and how can aging Bitcoin mining rigs best be re-used or recycled, and what is the true lifetime of a rig?
- How widespread is small-scale (e.g., household) Bitcoin mining and, if significant, how can its energy use and carbon emissions be reduced?
- How can waste heat from Bitcoin mining best be used as a resource for other purposes?
3.5 Bitcoin security
Security is of utmost importance for the Bitcoin network and the reason that the Proof-of-Work (PoW) consensus, one of many different types of consensus algorithm (Lei et al. 2021), was chosen for Bitcoin (Nakamodo, 2008). Bitcoin miners compete to solve SHA-256 cryptographic hashes[9] that give the first miner with the correct answer the right to write the next block of information to the globally distributed Bitcoin ledger and receive a bitcoin payment as a reward[10] (see Böhme et al. 2015 or Warmke 2021 for accessible Bitcoin overviews).
Every transaction block created by a miner, and sequentially added to the blockchain about every 10-minutes, is verified independently and stored, along with the full ledger of all historic transactions, on every one of the >13,000 computers currently acting as ‘nodes’ in the Bitcoin network[11]. Any attempt to attack the network – to alter and falsify past ledger entries – would be prohibitively expensive and increases in cost over time as the network grows.
Questions relate to issues of whether Bitcoin provides an excessive level of energy-intensive security, beyond what is needed for the type of transactions it allows and level of security it provides. If Bitcoin ‘over-securitizes’ transactions, there may be justification for using a different consensus mechanism with a lower carbon footprint for some types of transactions. The specialized Application-Specific Integrated Circuits (ASICs) used in Bitcoin mining computers to solve the SHA-256 algorithm are rapidly becoming more efficient, so technological development may, to some degree, offset the amount of energy needed to secure a growing Bitcoin network.
- Can a truthful and secure record of global transaction history be maintained without the Proof-of-Work consensus and, if so, how do alternative consensus algorithms differ in their net ESG impacts?
- For which use cases can less energy-intensive proof-of-stake ‘altcoins’ match or exceed Bitcoin’s potential direct and higher-order ESG benefits, and, conversely, which use cases and ESG benefits can only be fulfilled by the Bitcoin network?
- How much security is ‘enough’ for the Bitcoin network?
3.6 Retail, institutional, and national Bitcoin adoption
Market demand drives bitcoin price action and miners’ profitability and, thus, changes in energy demand and carbon emissions. ESG certification schemes can, in theory, provide signals that correct for market failures (much like a fair trade label, ESG certification is a ‘credence attribute’ [Caswell and Mojduszka 1996] that can affect market price). Holding bitcoin as part of a portfolio can also change the portfolio’s aggregate carbon intensity (e.g., Baur and Oll 2021). Similar considerations apply at the institutional level, where other criteria (e.g., portfolio allocation limits, daily ESG holdings mandates) may further affect bitcoin demand.
State-level investment options vary from incorporating bitcoin holdings into sovereign wealth funds to full adoption of bitcoin as legal tender, a measure that El Salvador took in 2021. Issues of USA dollar hegemony and geopolitical conflict appear to be increasingly important in the context of Bitcoin (and central bank digital currency – CBDC) adoption internationally (Huang and Mayer 2022).
- What are the key technical, economic, social, political, and cultural determinants of adoption of bitcoin as money?
- How best can Bitcoin reduce the transaction costs of payments, banking, and other financial transactions?
- How will the adoption of Layer 2 technological advances (e.g., Lightning Network’s capacity to bundle and process small bitcoin transactions off-chain) affect Bitcoin's electricity consumption and ESG performance?
- How do 'green mining' certification schemes affect retail and institutional investors’ willingness to pay for sustainably-mined bitcoin?
- How much could carbon offset and renewable energy certificate (REC) schemes reduce net carbon emissions, and how do the strategies compare?
- How do levels of trust in a society affect the likelihood, rate, and impact of Bitcoin adoption?
- What is the relative importance of environmental, social, and governance criteria for institutional ESG-oriented Bitcoin investors, and how do they make trade-offs among different factors?
- How could bitcoin’s widespread adoption as money affect international trade patterns and wealth distribution?
- What are the economic and ESG opportunity costs for nations not adopting Bitcoin?
3.7 Governance
How might Bitcoin transform governance and, conversely, how could governance transform Bitcoin? For governments, there is likely a tension between embracing a financial innovation that lowers transaction costs for consumers and firms, but possibly erodes the capacity of governments to use monetary and fiscal policies to manage domestic interest rates, employment rates, social programs, and shape societal wealth distribution. Governments may be reticent to adopt Bitcoin, opting instead for other blockchain-based solutions such as government-controlled CBDCs. Within governments, there is no guaranty of consistent goals, policies, or regulations across departments.
The impact of bitcoin as a decentralized currency also likely has important impacts on governance transaction costs (i.e., the costs of running a governance system, including those arising from negotiation, litigation, and strategic behavior) and the efficiency-maximizing scope of governance, the degree to which governance should be centralized, decentralized, or devolved (more power to non-government actors). Williamson (2000) first applied transaction cost economics to firms but they are also applicable for governance systems (e.g., Birner and Wittmer 2004). Decentralization’s impact on economic performance is complex (e.g., Davoodi and Zou 1998). In some cases, devolution may enable non-state actors to coordinate and cooperate on problem-solving for issues of common concern (e.g., Molina-Garzón et al. 2022). Climate change mitigation needs to consider international free-riding incentives and adaption to climate change will require shared international financing; both may benefit from increased levels of trustless transactions (Berg et al. 2020) and blockchain-enabled cooperation (Reinsberg 2020).
- Under which circumstances and in what contexts would governments prefer to adopt Bitcoin rather than a CBDC?
- What environmental, social, and governance outcomes are most important to governments and how does Bitcoin adoption help or hinder them getting that?
- How might governments balance the costs and benefits of regulating Bitcoin mining and adoption relative to the benefits they derive from tax revenues?
- How will Bitcoin redefine and restructure political power over time?
- How could widespread international Bitcoin adoption lead to more participatory forms of governance?
- How could widespread international Bitcoin adoption affect the ability of G7 countries and international financial institutions to shape international relations?
- How can Bitcoin mining and adoption best be aligned with national and international ESG-oriented treaties and commitments?
- If, in the future, Bitcoin was adopted as a reserve currency, how would that affect nations’ capacity to govern domestically and influence international relations?
- How does Bitcoin affect governments’ capacity to enact monetary and fiscal policy, and does that constrain or catalyze good governance?
- How can poor nations leapfrog richer countries with regards to Bitcoin adoption, and what would the impact be on trade, development, and poverty alleviation?
- How best could Bitcoin be used to implement universal basic income (UBI) and other targeted social support initiatives?
- How can governments create a stable and internally consistent regulatory environment for Bitcoin miners and investors?
- How do different government regulatory and non-regulatory intervention options affect Bitcoin mining profitability and behavior?
- How can regulatory and non-regulatory market mechanisms incentivize sustainable Bitcoin production, and how do options compare with regards to emissions levels and control costs?
- How do ESG and other political factors influence the regulatory options available to governments to manage Bitcoin mining and adoption?
- When and how might Bitcoin mining and adoption be strategically supported by governments in order to build prosperous national and regional economies resilient to external shocks?
- How does the ‘optimal’ amount of governance decentralization or devolution change as Bitcoin increasingly decentralizes financial transactions?
3.8 Values and beliefs
Peoples’ willingness to adopt Bitcoin is potentially affected by many factors. One way to visualize the relationships between behavioral determinants and actual behavior – Bitcoin adoption in this case – is with the Value-Belief-Norm framework (Stern 2000) (Figure 1). One of the core issues is how and why individuals perceive Bitcoin adoption as a threat or as an opportunity, and how constraints affect their intended behavior. Intentions are shaped by a person’s worldview and the information they can mobilize; actual behavior also depends on resource constraints, regulations, and social norms.
A number of interviewees highlighted how many Bitcoiners believe that Bitcoin adoption causes a shift in personal values and, subsequently, influences their purchasing behavior. For example, the terms ‘fiat food’ and ‘fiat education’ were used to describe changes in individuals’ time preferences, and their shift from low- to high-quality products that provided households with enduring value and resilience. Substantial reductions in consumption due to shifts in preferences to more enduring products has potential to reduce energy needs. Confluence in perspectives among right-leaning Bitcoiners and degrowth-oriented ecosocialists (Albert 2022) might be a surprising region of common ground if Bitcoin adoption really influenced time preferences and consumption patterns.
- How does Bitcoin adoption affect the values, time preferences, and behavior of individuals, firms, and governments?
- How do Bitcoiners and non-Bitcoiners differ in their willingness to make trade-offs among different liberties?
- What influence does a person's life experience have on his or her willingness to adopt Bitcoin?
- How does Bitcoin adoption affect peoples' perceived threats and opportunities, and influence their visions of feasible futures?
- How does Bitcoin adoption and use vary among individual- and community-oriented cultures?
- Does Bitcoin adoption affect consumer preferences and, if so, what impact could that have on energy consumption and waste streams for consumer products?
- How does the libertarian goal of self-sovereignty influence the lens through which people view their environmentally-relevant personal health and lifestyle choices?
- How does the availability of credible information affect Bitcoin adoption?
- How does Bitcoin adoption directly and indirectly affect freedom, innovation, prosperity, and societal flourishing?
- Does using bitcoin make a person unpatriotic?
3.9 Inflation and discount rate
High inflation undercuts the rationale for undertaking investments with a long time-horizon. Rampant inflation is a reflection of high levels of social and economic uncertainty that, in severe hyperinflationary cases, renders information about the recent past irrelevant and reduces human’s capacity to predict the near future (Heymann and Leijonhufvud 1995). A low discount rate is critically important to firms and governments making long-run climate mitigation investments that require substantial up-front financing but for which the flow of future benefits may not accrue for decades. The choice of appropriate discount rate for climate change investments has been contentious among environment economists for over a decade (e.g., Quiggin 2008; Stern 2010).
If Bitcoin can truly help hedge against inflation, lower discount rates may increase the likelihood of private and public sector investors taking the long-term view needed to fill the emissions gap. In a high-inflation world, there is little financial incentive to invest in mitigation; the default position would likely be to wait to see what happens and adapt to environmental change only when it becomes absolutely necessary to do so even if, by that time, major environmental tipping points had been exceeded.
- How does, and could, Bitcoin help control inflation and reduce the discount rate?
- How would Bitcoin's impact on discount rates differentially affect high-, medium-, and low-income households and nations?
- How would low discount rates affect the quantity and quality of goods and services sold in an economy, and would it result in lower aggregate energy use, household consumption, and carbon emissions?
- Would liberals, who may tend to favor inflationary monetary and fiscal policy, be more likely to adopt Bitcoin if it helped lower discount rates and increased the financial viability of funding mitigation efforts?
3.11 Adaptive capacity
Widespread Bitcoin adoption may play a role in helping to build adaptive capacity among households, communities, and governments, helping to buffer the adverse effects of climate change when they manifest. Vulnerability to a shock is often viewed as a function of a household’s or nation’s (1) exposure, (2) sensitivity, and (3) adaptive capacity (Smit and Wandel 2006). Access to capital, literacy, health factors, civil liberties, political rights, and governance effectiveness are all factors that influence vulnerability at multiple levels (Brooks et al., 2005); mobility (e.g., Gray and Mueller 2012), social capital (Pelling and High 2005), and institutional constraints (Ford and King 2015) are other factors affecting household-level adaptive capacity. Bitcoin adoption has the potential to affect many of those determinants, so higher-order impacts on adaptive capacity may well be anticipated.
- How does Bitcoin adoption affect resiliency and adaptive capacity of households, communities, firms, and governments?
- How could decisions by government to constrain or encourage Bitcoin adoption affect the country's capacity to adapt to social and environmental change over the long-run?
- When and how do government monetary and fiscal policies undercut the capacity of households and communities to mitigate against, or adapt to, environmental change?
3.12 Narratives
While blockchain narratives often address the promise of controlling climate change (Hull et al., 2021), Bitcoin mining and adoption is now the focus of competing, acrimonious narratives. Interview transcriptions suggested that some of the classic misinformation strategies (Douglas 2006; Supran and Oreskes 2017) are now mobilized – by both sides – in the Bitcoin space. There is a need to build understanding about how and why narratives develop and spread, how misinformation can be combatted, and how different actors with different motives might form coalitions to advance or undermine particular policy positions. Policy research theories or methodologies – the advocacy coalition framework (Sabatier and Weible 2007), narrative policy analysis (e.g., Lawton and Rudd 2014), instrument constituencies (e.g., Voß and Simons 2014), etc. – may prove useful when sorting out motives for strategic policy alliances of groups advocating particular Bitcoin narratives.
One point clear from the interviews was that even Bitcoiners who agree with climate science were still very skeptical of the Bitcoin-ESG narrative. Bitcoiners’ often perceived BlackRock’s advancement of the ESG narrative (Simpson and Kishan 2021) simply as a profit-maximizing corporate strategy.
- How and why do organizations with differing worldviews and core values cooperate to advance or oppose Bitcoin mining and adoption?
- How and why does Bitcoin mining and adoption become politically polarized when it has potential to address issues that both conservatives and liberals prioritize?
- What role has BlackRock played in the development of the global ESG narrative and how does the company's actions affect Bitcoin's institutional adoption?
- How can Bitcoin skeptics become more ‘solution agnostic’ when credible evidence points to the potential for Bitcoin mining and adoption to help control climate change?
- How can Bitcoin mining and adoption be framed in terms of modern sustainability and degrowth narratives?
- To what extent do Bitcoin critics and advocates have undisclosed conflicts of interests that would compromise the credibility and legitimacy of their messaging?
- What are the financial, human, and social costs arising from cryptocurrency scams or investors' confusion over the purpose and capabilities of altcoins relative to Bitcoin?
3.13 Knowledge creation and communication
Research on Bitcoin’s impact on ESG factors will require complex, transdisciplinary research that engages researchers, industry practitioners, investment firms, and government policy-makers in the co-production of knowledge. There is a need for high-quality research (Bergmann et al. 2005) but there also needs to be recognition that the boundaries between credible and non-credible evidence may be disputed (e.g., should industry-based knowledge about Bitcoin mining economics be integrated into research by academic economists? Asking miners and economists may lead to very different opinions on what constitutes credible knowledge). Conceptually, the area of overlap between scientific credibility, societal relevance, and policy salience should be where transformative knowledge can be created (Figure 2, loosely adapted from Cash et al. 2003).
Credible research on Bitcoin’s energy use and ESG impact is only one step in the process of mobilizing knowledge. There is still a need to synthesize research from many sources and communicate those finding to decision-makers (Gluckman et al. 2021). Researchers may not be particularly good at synthesis and most scientists are unlikely to be effective acting as communicators to senior decision-makers. The ‘honest broker’ role that bridges science and policy usually falls to specialized knowledge brokers at the science-policy interface (Pielke 2007; Gluckman et al. 2021), who sometimes may be senior scientists trusted by, and with access to, decision-makers (e.g., Lawton 2007; Lawton and Rudd 2013). Complicating the communications and knowledge mobilization challenge, some types of governments frame climate change differently (i.e., economic, environmental, technological mitigation, or adaptation orientations) and prefer different types of policy solutions (Hoppe and Wesselink 2014).
- How can credible scientific evidence be created, synthesized, and effectively communicated to skeptical Bitcoiners and Bitcoin skeptics?
- How can a systematic research program on Bitcoin’s net energy use and ESG impacts be structured, funded, and incentivized?
- How can Bitcoin research results be framed and disseminated to ensure that key findings are available for integration in international energy and climate change syntheses?
- How and why do academic researchers, industry researchers, and policy-makers differ in how they prioritize Bitcoin energy use and ESG research needs?
- What measures could synergize industry-academic-government collaboration in Bitcoin research projects?
- How can the Bitcoin narrative best be framed so that its net effect on energy use and ESG impacts is effectively communicated to the public, investors, and policy-makers?
- How best can knowledge brokers facilitate communication between decision-makers and Bitcoin researchers?
- What resources could best help communications professionals to ensure the veracity of their reporting on Bitcoin's energy use and ESG impact?
- How can Bitcoin’s core purpose and features best be communicated to people who see little or no utility in Bitcoin?
3.13 Social impacts
Interviewees explicitly and implicitly wove together many stories about how Bitcoin influences household, community, and national social and economic well-being, with particular emphasis on vulnerable individuals and communities, and those living in nations with repressive governments. The links between poverty alleviation and climate change action are well known (Lankes et al., 2022), as is the role that reducing women’s financial exclusion plays in shifting intrahousehold bargaining power and improving household well-being (Doss 2013). Human right abuses and financial censorship (e.g., Løge 2019; Bailey et al. 2021; Gladstein 2022) also have important impacts on human well-being. All these factors suggest that there are likely higher-order Bitcoin impacts on households’ capacity to adapt to climate change and other stressors.
The primary changes arising from Bitcoin mining and investment are initially environmental, technical, and financial in nature; as wealth spills through an economy, new investments are possible over time in health, education, community, infrastructure, and culture (Figure 3). Higher-order impacts are, of course, much more challenging to research as attribution of outcomes to specific causal factors can be difficult to tease out.
- How much money can be saved globally by using Bitcoin remittance services, and how do those savings impact poverty alleviation, resilience, and wealth inequity in developing countries?
- How could Bitcoin adoption affect the ability of the world’s unbanked to access financial services and how would that impact poverty?
- How does Bitcoin enhance and unlock human capital globally, and what effects would that have on poverty alleviation?
- How best can Bitcoin be used to empower women?
- How can Bitcoin adoption affect the capacity of individuals and organizations to escape, cope with, or challenge repressive political regimes?
- How does Bitcoin mining and adoption influence human migration, rural regeneration, and regional economic development?
- Under which circumstances and in which regions could Bitcoin mining displace existing industries, and what are the net economic and ESG impacts of displacement?
- How can Bitcoin be used to enhance the ability of donors and charities to achieve their goals?
- How best can Bitcoin be used to reduce losses due to administrative costs, theft, and graft along the foreign aid and disaster relief funding supply lines?
- What are the benefits and dangers to vulnerable households and communities from a ‘Bitcoin adoption experiment’?
[8] Note that hedging strategies are standard practice in agricultural and commodities futures markets.
[9] Background on Secure Hash Algorithm (SHA) history is available at: https://en.wikipedia.org/wiki/SHA-2. SHA-2 family algorithms were designed by the USA National Security Agency and are used widely beyond Bitcoin, including in the internet SSL/TSL certificates that keep web commerce secure.
[10] Solving a SHA-256 hash is functionally random, thus ensuring bitcoin distribution across the mining industry, which is open to anyone who wants to participate.