The Sustainable Bitcoin Protocol (SBP), a startup that aims to encourage miners to utilize environmentally friendly energy sources using tokenization, has completed its first transaction of a clean bitcoin mining blockchain asset.
The SBP issues the Sustainable Bitcoin Certificate (SBC), an on-chain environmental asset that represents bitcoin mined using clean energy, verified by a third party. Miners that use clean energy can participate in the program at no extra cost. By allowing miners to sell SBC, the protocol hopes to incentivize them to use clean energy as another revenue stream opens up to them.
Bitcoin miner CleanSpark (CLSK), which primarily uses nuclear power in the U.S. state of Georgia, sold SBC to Melanion Digital, the digital assets arm of alternative investment and asset management firm Melanion Capital, according to a press release sent to CoinDesk. CleanSpark’s energy use was verified by carbon data platform Cleartrace.
In the pilot transaction, each SBC was sold for $980, based on the additional costs incurred for a bitcoin miner to mine a single coin, said Elliot David, head of climate strategy and partnerships at SBP, in an email to CoinDesk.
The SBC was sold “with a discount to the market price because this was the first transaction of its kind. Based on today’s bitcoin energy consumption levels, we estimate that SBC would sell now for approximately $1,150, which is roughly a 5% revenue add to a miner’s bottom line,” if they’re using 100% clean energy, David said.
Under the model, miners can also gain SBC for free by fueling their operations with natural gas that would otherwise be wasted. The protocol may also invest in and retire other renewable energy credits to address the historic energy use of the network.
The transaction is a “seminal moment for the bitcoin industry,” said Wu Jihan, one of the co-founders of mining machine behemoth Bitmain, who now runs cloud mining firm BitDeer.
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