A new cryptocurrency with a solar-powered twist could be just the incentive we need to make the shift to clean energy. While most cryptocurrencies are just themed copies of Bitcoin – Dogecoin, based on a famous internet meme, is a notable example – SolarCoins are a bit harder to earn.
SolarCoin is based on Bitcoin technology, but in addition to the usual way of generating coins through mining, crunching numbers to try and solve a cryptographic puzzle, people can earn them as a reward for generating solar energy.
People with solar panels on their house will receive solar renewable energy certificates from their energy company in return for feeding a megawatt-hour of electricity back into the grid. These certificates are already traded for cash, but present one to SolarCoin's organisers and you'll receive one coin – they expect to start distribution in a matter of weeks.
True, the coins are worthless at the moment, but if people start using the currency to support solar energy, it should acquire value. SolarCoin Foundation spokesman Nick Gogerty says the initiative is aiming for $20 to $30 per SolarCoin, effectively providing solar panel owners with a crowdfunded feed-in tariff and encouraging more people to take part.
SolarCoin chose solar rather than another renewable technology because investment in solar panels is easier than in wind turbines, for example. "Solar is interesting because it can be very grassroots," says Gogerty. He and a colleague first conceived of an energy-backed asset in 2011 but couldn't make the idea work without a central bank. Bitcoin makes the bank unnecessary. "We're very thankful for Bitcoin leading the change."
Bitcoin has been accused of wasting energy in the past because of the computing power it takes to mine coins, but Gogerty says that SolarCoin is 50 times more energy-efficient because its algorithm allows the total number of coins to be mined faster – and that's before factoring in the energy boost from new solar panels.
If SolarCoin succeeds, the model could even be applied to other environmental projects, such as conserving the rainforest or endangered species. "If someone can come up with the mechanism and the approach, it would be a great thing," says Gogerty.
Jem Bendell of the University of Cumbria, UK, says SolarCoin is an interesting idea. "What it shows you is we can use this technology that provides a distributed, secure, public, global record for other things." But he cautions that many new coins are launching on the back of the Bitcoin gold rush, and not all will last. "The success or failure of SolarCoin will be whether people buy it."
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