We in the Gridcoin community promote our coin as an environmentally-friendly alternative to other cryptocurrencies, but the reality is that even our model of coin minting is insufficient to offset our environmental impact, if we our honest about confronting our current ecological crisis. Carbon emissions caused by doing computations for scientific and mathematical projects are emissions nonetheless. The fact that expending energy as we do is better than expending it on Proof of Work computations is not itself sufficient justification for using so much energy. In this article, I will present a model for offsetting the carbon emissions from our hardware by trading GRC for green energy based coins. This would be one of the first instances of a multi-currency economy, developing naturally by trading two coins with their own original, individual purposes for existing.
If you happened upon this article and are unfamiliar with Gridcoin (GRC), our coin rewards crunchers of scientific and mathematical projects in the distributed computing platform BOINC, on top of a Proof of Stake protocol. For a list and short descriptions of actively rewarded projects, see https://gridcoin.us/Guides/whitelist.htm.
I started this journey a year ago (January 26, 2018 to be exact), with the intention of designing an alternative, incentive-compatible reward structure for Gridcoin. Currently, projects are each allocated the same amount of GRC - thereby inducing very disparate rewards for the same hardware that crunch different projects - see, for example, this post from @parejan. My goal was to normalize, as much as possible, the rewards for different projects, so that the same piece of hardware would receive approximately the same amount of GRC across different projects.
Recently, I published an updated alternative to my original proposal which I think accurately reflects the goals I wanted to achieve, in addition to creating multiple side benefits for the community, such as the world's largest, open-access, open-source hardware profiling database.
Here, I hope to achieve another goal, which I have mentioned a number of times in the Fireside chats (hosted every Thursday evening on the Gridcoin Discord server). That goal is to make Gridcoin the world's largest green-energy powered supercomputer.
How Would It Work?
A GRC/Green Energy exchange would allow Gridcoin crunchers to offset the carbon emissions created by their hardware. There are multiple coins oriented towards green energy; the model described in this article would rely on a cryptocurrency that represents a certain amount of energy produced. While I am not involved with any such communities, Solarcoin (SLC) seems to be a good example of such a coin:
Any size Solar energy producers freely submits a claim with a SolarCoin Affiliate to register their solar installation. Claimants download a free SolarCoin wallet to create a receiving address that acts like a bank account. This address and some solar facility data and documentation are shared with the Affiliate.
The SolarCoin Foundation then sends SolarCoins to the Claimant’s wallet at a rate of 1 SolarCoin per 1 MWh of verified electricity production. Claimants can save, exchange, or spend SolarCoins as they wish, and may receive ongoing grants over the next 20-30 years they generate energy.
With my most recent proposal, it is possible to closely associate GRC with the amount of energy required to mint it. The normalization was established by asking the question: "If all of the computing power on the network was focused on one application, how many Work Units would get done?" By doing this for every application, we establish the normalization. Furthermore, that question has a close relative: if all of the computing power on the network is being used, how much energy is being consumed?
With those questions in mind, for every application, we know Total Number of Work Units of Application XYZ / Total Energy Consumption = WU of XYZ / Megawatt-hour. Thus, we know how much energy was required to achieve a WU from a particular application.
Now, this would only be an approximation, and would be much more accurate if we were to account for the types of hardware that were predominantly crunching specific applications. Since some hardware architectures are better suited to some applications than others, it is likely that there will be an uneven distribution in hardware types across projects. There are other tweaks that would improve the relationship as well, but they are beyond the scope of this post.
Now, how does this tie in with a green energy coin? Well, Solarcoins, for example, represent actual Megawatt-hours (MWh) produced. A Gridcoin cruncher could exchange their GRC for SLC, thereby offsetting their carbon emissions, and allowing even residential and small-scale solar energy producers to contribute to scientific progress.
Naturally, the platform for exchange would be a marketplace. Given the difference in demand for GRC and SLC, converting each to BTC or some other standard might give a different exchange rate than if the two were exchanged based on only the energy produced/consumed. However, direct exchange between the two might in turn have an effect on their exchange rates with BTC. In any case, such an exchange would be the beginning of a multi-currency economy. It naturally extends the value of both coins, and allows for greater buying/selling flexibility, as well as providing a proof-of-concept for the multi-currency economy.
Many thanks to @jamescowens and @jringo for their thoughts pre-publication, and to @jringo especially for suggesting the possibility of tying GRC to a green energy coin, as I mentioned at the end of my original proposal almost a year ago.