Filecoin Might Have a Way for Bitcoin to Fight Its Energy Critics (if Miners Use It)

Did Filecoin just launch a tool to end the never-ending debate over bitcoin’s carbon footprint?

AccessTimeIconDec 2, 2021 at 2:01 p.m. UTC
Updated May 11, 2023 at 4:59 p.m. UTC

The Filecoin Green project, a way of mapping the electricity used by the largest decentralized data storage blockchain, has launched an open-source dashboard in a bid to prove its commitment to renewable energy.

Notably, the system could also be used by bitcoin to help clean up the largest cryptocurrency’s dirty image, according to Filecoin Green’s creator, Alan Ransil.

“If bitcoin miners are interested, they could set up a database where their energy use and proof of renewable energy use are recorded,” said Ransil in an interview. “The open-source solutions we are building and helping to test – such as the Filecoin dashboard and the Energy Web tech stack – could be leveraged to set up such a system.”

Filecoin acknowledges decentralized data storage and retrieval is energy intensive as is also the case in the centralized Web 2 world of AWS and the like. The approach Filecoin has taken is to estimate energy use and assume the energy is not renewable until it has been verified through Renewable Energy Certificates (RECs). This involves matching energy use to renewable energy generation on the same power grid.

Crypto’s carbon footprint

Stepping back, Filecoin Green’s mission is to measure environmental impacts across a more decentralized internet, and allow people in different positions in the value chain (such as storage providers or miners) to mitigate those impacts. At its core is a reputation system designed to be both verifiable and interoperable in a way that wasn’t possible in Web 2, Ransil says.

Hardened bitcoiners, weary of fielding energy consumption critics, are probably rolling their eyes by now – that’s if they’ve even read this far. But Filecoin has more in common with bitcoin than you might think.

Filecoin uses a proof-of-storage consensus system in which energy use is linked to a valuable resource people are providing that is central to the entire enterprise: storing files and verifying over time that those files are stored.

“There’s no proof-of-stake version in which the energy to store files goes to zero,” Ransil said, alluding to the non-mining consensus mechanism used to secure newer blockchain networks. “Using Filecoin is always going to use a fair amount of energy. So we want to set up our ecosystem to demand renewable energy. It should make us a player in energy markets, and act as a strategic wedge to push green power grids.”

Ransil pointed out that Filecoin has taken a different strategy from the way people make renewable energy claims right now in proof-of-work (PoW) networks like Bitcoin. The latter’s claims tend to be based on surveys, which are then taken as representative of the entire network.

“This is interesting data to have as a starting point,” Ransil said. “But in an industry dedicated to rigorous verifiability we should aim for actual renewable energy use to be certified and publicly proven.”


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Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.

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