The Value of Bitcoin

Bitcoin has proven over the past decade that it is both a mechanism of commerce on the Internet, allowing users to rely less on traditional financial institutions, as well as a store of value for bitcoin holders. Both of these functions are only expected to grow over time.


Bitcoin is the peer-to-peer cash system its inventor envisioned in the original white paper; a financial transaction system used by millions of users everyday eliminating the need of a third party by effectively permitting non-reversible transactions. With traditional transactions, even if a third party can be trusted, too often one or more of the transactional parties may not have complete control over it, as in the case where a transactional-intermediary block or freezes a transaction.

Dealing with the Unforeseeable Problem

This paper deals with a problem that Satoshi could never have reasonably foreseen; the current and staggering increase in the use of carbon-sourced electricity for mining, particularly in certain regions of the world, often coupled with the high concentration of hashing power in these same regions resulting in an environmentally unsustainable situation, potentially threatening the independence of the network through centralization. Furthermore, as concentration within the network continues to rise and with the inevitable use of quantum computers in a near future, additional safeguards need to be implemented to prevent double spending attacks on the Bitcoin network or perhaps some disruption of the network. Bitcoin Core could face such a problem if honest nodes no longer collectively control the majority of hashing power. In order to address these problems Bitcoin LC includes these simple three OP_RETURN values in each miner’s new proposed blocks coinbase transaction:
  • x: the corresponding Bitcoin Core legacy block hash
  • y: a renewable mining certificate with extended signature of miner’s Bitcoin LC coinbase address with the expiration timestamps
  • z: root certificate signature of the bitcoinlc.org foundation with expiration timestamps
Miners are required to signed their coinbase address using the certificate obtained by an independent organization, the Bitcoin Low-Carbon Foundation. Certificates would only be issued to nodes/miners which meet a verifiable sustainable standard that is based solely on confirmation that the mining operation is powered solely with renewable energy.  Regarding the potential issues of concentration and double-spend attacks, this is dealt with by having the distributed timestamp of the improved decentralized network node use the proof-of-work contained in the Bitcoin Core block headers within the Bitcoin LC coinbase OP_RETURN. Standards would no doubt evolve over time, reflecting the demands of the market.