Voluntary carbon offsetting tools for crypto-exchanges, looking for co-founders

[SeanImpactScope]

My partners and I have developed a suite of voluntary carbon offsetting tools designed specifically for the customers of crypto exchanges. All the exchanges need to do is insert 6 lines of code that connects to our API. We take care of everything else.

My main partner in this project died of a heart attack recently, so the team and project are in a state of flux right now.

We're looking for new team members (and advisors) to join.

Further information and documentation available on request. Happy to talk to all serious potential collaborators. Feel free to send me a DM or contact me via the web address in my profile.

[LoyceV]

Further information and documentation available on request.

Why don't you share it here? I'd love to know how you plan to make a good margin on storing a million tonnes of CO₂! In fact, if you can do that, I think there are much better uses than adding 6 lines of code to an exchange.

[SeanImpactScope]

Thanks for your interest. I would be happy to share more information about the project here.

1. Your use of the verb "store" is perhaps confusing. Carbon offsetting is not about "storing CO2" exactly, although some projects do focus on sequestering carbon specifically (carbon sinks). Verified offset projects can be about restoring grassland, distributing energy efficient stoves, avoiding or preventing deforestation, converting landfill methane, etc. So there are many types of carbon offsetting projects, as long as they avoid, reduce, sequester or otherwise prevent certain amounts of CO2 from entering the atmosphere.

2. BTC's annual carbon footprint (metric tons of CO2) for 2019 will be in the region of 33 million tonnes (that's the equivalent of adding 4 million petrol powered cars to our roads in 2019). Based on the number of crypto exchanges which have so far expressed an interest in using our offsetting solutions, we believe we can "capture" close to 3% of the addressable market by the end of Year 2. So yes, 1 million tonnes of mitigated CO2 is achievable.

3. Yes, sales margins and brokerage fees for voluntary emissions reductions can be very high. Much higher than almost any other OTC traded commodity in existence right now.

4. Obviously our platform is more than 6 lines of code. The back end needs to manage the calculation, verification, purchase, recording and retirement of all carbon credits purchased through the platform. The 6 lines of code is all the crypto exchange needs to add to its own site. We take care of everything else.

[MonicaHenderson]

My sister might be interested in this. She used to be an investor relations manager at one of Australia's biggest carbon finance companies. She is based in New Zealand now. Is her location a problem?

[SeanImpactScope]

She is based in New Zealand now. Is her location a problem?

Hi Monica. We have team members in Switzerland, Hungary, Vietnam, Canada, South America, Africa, so location is not an issue. We'd love to hear from your sister.

[SeanImpactScope]

Project update. Now we have letters of intent from 6 exchanges.

We've also put together an 80-second video to show some of the UI features under development.

https://vimeo.com/416288184

We welcome all feedback.

Lastly, we'd love to get more respondents for our anonymous market research survey.

https://forms.gle/9jNCQgCjLWxYEVsW7

[Vod]

4. Obviously our platform is more than 6 lines of code. The back end needs to manage the calculation, verification, purchase, recording and retirement of all carbon credits purchased through the platform. The 6 lines of code is all the crypto exchange needs to add to its own site. We take care of everything else.

So basically you are a digital version of Greenpeace - you ask exchanges to send you a portion of profit for you to invest in carbon reduction, and they can write it off?

They are still making the carbon - and now you are making extra carbon by processing all that extra data...  :/

Also, you may have posted the wrong link.  The document says "not for public distribution" at the very top.

[SeanImpactScope]

4. Obviously our platform is more than 6 lines of code. The back end needs to manage the calculation, verification, purchase, recording and retirement of all carbon credits purchased through the platform. The 6 lines of code is all the crypto exchange needs to add to its own site. We take care of everything else.

So basically you are a digital version of Greenpeace - you ask exchanges to send you a portion of profit for you to invest in carbon reduction, and they can write it off?


Also, you may have posted the wrong link.  The document says "not for public distribution" at the very top.

Greenpeace is an activist-advocacy group. They do not deal with carbon offsets directly.

A carbon offset is the equivalent of 1 tonne of CO2 emissions which has been sequestered or avoided or somehow prevented from entering the atmosphere. We resell high quality, independently audited offsets.

If I send you 0.001 BTC onchain the CO2 footprint of that transaction is roughly 300 kgs of CO2, which is a huge amount. For the sake of comparison the carbon footprint of a credit card transaction is only a few grams.

It is not the exchanges which purchase offsets from us, it is the clients of exchanges.

You are right about the link. I deleted it. In hindsight I should have made a new thread because my aim is to get more respondents for the survey.

[LoyceV]

A carbon offset is the equivalent of 1 tonne of CO2 emissions which has been sequestered or avoided or somehow prevented from entering the atmosphere. We resell high quality, independently audited offsets.

I know politicians love "carbon trade", but I don't really believe most of it. Buying someone else's "emission improvements" so that you can keep emitting while the other person would have emitted less with or without your money doesn't help the environment a thing.

If I send you 0.001 BTC onchain the CO2 footprint of that transaction is roughly 300 kgs of CO2, which is a huge amount.

It's not true. Miners' energy consumption is mainly based on the earnings per block. If I make a 0.001 BTC transaction, I pay about 0.000002 BTC in fees. The majority of the energy consumption is based on the value of the block reward (6.25 BTC) with or without my transacion. My transaction fee adds only a very small fraction to this.

I've seen many claims to "compensate CO₂ emissions", but most of the time it's just creative book keeping. I'd love to see an example which you're planning to use that convinces me though!

[SeanImpactScope]

A carbon offset is the equivalent of 1 tonne of CO2 emissions which has been sequestered or avoided or somehow prevented from entering the atmosphere. We resell high quality, independently audited offsets.

I know politicians love "carbon trade", but I don't really believe most of it. Buying someone else's "emission improvements" so that you can keep emitting while the other person would have emitted less with or without your money doesn't help the environment a thing.

If I send you 0.001 BTC onchain the CO2 footprint of that transaction is roughly 300 kgs of CO2, which is a huge amount.

It's not true. Miners' energy consumption is mainly based on the earnings per block. If I make a 0.001 BTC transaction, I pay about 0.000002 BTC in fees. The majority of the energy consumption is based on the value of the block reward (6.25 BTC) with or without my transacion. My transaction fee adds only a very small fraction to this.

I've seen many claims to "compensate CO₂ emissions", but most of the time it's just creative book keeping. I'd love to see an example which you're planning to use that convinces me though!

Hi LoyceV, I disagree with your assessment of the usefulness and validity of carbon offsets.

Naturally, our primary focus should be on carbon emission prevention. That's my policy too. I have eliminated plastic from my life. I do not eat meat. I take the train when I can instead of flying, etc.

I prevent what I can and I offset the rest.

As for your calculations, I think you need to take a second look.

There are a number of independent academic studies which attempt to calculate the carbon footprint of bitcoin. The primary methodology is to analyse localisation data for IP addresses of mining pools. Based on location it can be deduced with a high level of probability / certainty whether a given IP address is receiving power from a coal powered plant or from a hydro plant, for example.

Here are three examples of major studies, which have received a lot of press.

1. "The Carbon Footprint of Bitcoin" by Christian Stoll, Lena Klaaßen and Ulrich Gallersdorfer

2. "Bitcoin's Growing Energy Problem" by Alex de Vries

3. "The Bitcoin Mining Network: Trends, Average Creation Costs, Electricity Consumption & Sources"  by Christopher Bendiksen & Samuel Gibbons

If you average out the conclusions of the studies above and look at real-time data on location of mining pools from the Cambridge Centre for Alternative Finance, one can see that the annual carbon footprint for BTC is (and let me give a really wide range here) between 22 - 32 MtCO2.

If we take the low end of that, which is 22 MtCO2, i.e. 22,000,000 tonnes of CO2 emissions, then it becomes easy to calculate the CO2 footprint per transaction.

For the next step we can look at the bitinfocharts.com charts, we know that the # of average daily onchain transactions for the last year has been pretty steady at around the 300 k tx per day, approx. That translates to 109,500,000 transactions per year.

22,000,000 tonnes of CO2 emissions / 109,500,000 transactions = 200.9 kgs of CO2 per transaction.

I don't want to stop people using bitcoin. I just want to find a voluntary way to make it more sustainable.

[LoyceV]

Hi LoyceV, I disagree with your assessment of the usefulness and validity of carbon offsets.

It's okay to disagree, but I'd love to see an example to convince me that carbon offsets are useful.

I have eliminated plastic from my life.

That must be a lie, it's virtually impossible to use the internet without using plastic.

If we take the low end of that, which is 22 MtCO2, i.e. 22,000,000 tonnes of CO2 emissions, then it becomes easy to calculate the CO2 footprint per transaction.

I've seen those studies before, but like I said: I disagree that you can blame only the transactions for it. It's the total profit miners make that's responsible for all emissions they cause. If they make more profit, they spend more on hardware to compete with other miners.
Just yesterday, I spent about a dollar on a 8 kB Bitcoin transaction that filled less than 1% of a block. Based on your data, that would make me responsible for 3000 kg CO2 emissions. There's no way my $1 in fees is enough produce that much CO2 emissions by producing electricity. However, if you include the block reward, the miner suddenly has about $500 available to include my transaction, and that is indeed enough to emit a few tonnes of CO2. But the same miner would have gotten that $500 with or without my transaction, I just add $1 to it.
Another argument why you can't just divide total emissions by total number of transactions: if blocks would be 100 times bigger, mining would take just as much energy. If Satoshi would have been the only one mining since the start of Bitcoin, his 50W desktop computer would be enough to process all transactions.
It's not the transactions that cause energy use, it's the value of newly generated Bitcoins that causes it. And that keeps the entire network secure.

22,000,000 tonnes of CO2 emissions / 109,500,000 transactions = 200.9 kgs of CO2 per transaction.

Again: dividing by transactions is arbitrary. You could just as well calculate the CO2 emission per Bitcoin user or per traded satoshi. None of those are the direct cause of the energy emissions, just like transactions. However, all of those together are the cause of the high value of Bitcoin, which is the real reason for high emissions. If Bitcoin is worth 10 times more next year, emissions will follow the same growth.

I don't want to stop people using bitcoin. I just want to find a voluntary way to make it more sustainable.

Please give an example

[SeanImpactScope]

Hi LoyceV, I disagree with your assessment of the usefulness and validity of carbon offsets.

It's okay to disagree, but I'd love to see an example to convince me that carbon offsets are useful.

If I had to hazard a guess I would say that you are not really open to being convinced and if I post an informative link perhaps you won't even read it. Maybe I'm wrong but your mind seems kind of closed.

In any event maybe others who stumble upon this might find it useful so here goes.

This is a good report showing the enormous additional benefits to local communities in developing countries.

https://www.goldstandard.org/sites/default/files/documents/goldstandard_impactinvestment.pdf

Just to give an example. If an efficient cookstove distribution project in rural Ethiopia is audited and approved for the issuance of certified offsets, there are huge additional benefits to the local community which can be measured in actual dollars saved and time saved. Less time spent collecting firewood, reduced respiratory diseases, decreased forestation, more time for productive economic activity.

I have eliminated plastic from my life.

That must be a lie, it's virtually impossible to use the internet without using plastic.

I don't buy or use plastic bottles, cups, bags, etc., but yes there are some plastic components in my phone and in my internet cables. I put my hands in the air. Ya got me!

If we take the low end of that, which is 22 MtCO2, i.e. 22,000,000 tonnes of CO2 emissions, then it becomes easy to calculate the CO2 footprint per transaction.

I've seen those studies before, but like I said: I disagree that you can blame only the transactions for it. It's the total profit miners make that's responsible for all emissions they cause. If they make more profit, they spend more on hardware to compete with other miners.
Just yesterday, I spent about a dollar on a 8 kB Bitcoin transaction that filled less than 1% of a block. Based on your data, that would make me responsible for 3000 kg CO2 emissions. There's no way my $1 in fees is enough produce that much CO2 emissions by producing electricity. However, if you include the block reward, the miner suddenly has about $500 available to include my transaction, and that is indeed enough to emit a few tonnes of CO2. But the same miner would have gotten that $500 with or without my transaction, I just add $1 to it.
Another argument why you can't just divide total emissions by total number of transactions: if blocks would be 100 times bigger, mining would take just as much energy. If Satoshi would have been the only one mining since the start of Bitcoin, his 50W desktop computer would be enough to process all transactions.
It's not the transactions that cause energy use, it's the value of newly generated Bitcoins that causes it. And that keeps the entire network secure.

Wow! So much to unpack here. I'm not sure where to begin.

First of all, I listed several rigorous academic studies, including one by the MIT Center for Energy and Environmental Policy Research. You did not challenge one single methodology or calculation in the studies. How come?

Secondly, for someone who posts so much on a bitcoin forum it appears that there are worrying gaps in your fundamental understanding of how bitcoin works and especially of how mining works. The block reward is not a function of mining it is a consequence of it. You clearly don't understand the difference.

Your $1 in fees is irrelevant. Just as the fiat value of the amount of BTC you sent is irrelevant too. It doesn't matter if you sent 55 BTC to your partner or 0.001 BTC to your sister.

22,000,000 tonnes of CO2 emissions / 109,500,000 transactions = 200.9 kgs of CO2 per transaction.

Again: dividing by transactions is arbitrary. You could just as well calculate the CO2 emission per Bitcoin user or per traded satoshi. None of those are the direct cause of the energy emissions, just like transactions. However, all of those together are the cause of the high value of Bitcoin, which is the real reason for high emissions. If Bitcoin is worth 10 times more next year, emissions will follow the same growth.

"Arbitrary"? If in your dictionary "arbitrary" means staring you right in the face then let's call it arbitrary.

I don't want to stop people using bitcoin. I just want to find a voluntary way to make it more sustainable.

Please give an example

An increase in the usage of voluntary offsets, by mining pools, by exchanges, by traders and by casual users. This would go along way to helping reduce the total global carbon footprint in a verifiable manner.

[LoyceV]

You should fix your quote by adding [ quote] and [ /quote] tags at the right places.

If I had to hazard a guess I would say that you are not really open to being convinced and if I post an informative link perhaps you won't even read it. Maybe I'm wrong but your mind seems kind of closed.

You're not wrong, but that doesn't mean you're right I've seen many examples of "carbon offset", and it's almost exclusively based on selective assumptions.

This is a good report showing the enormous additional benefits to local communities in developing countries.

https://www.goldstandard.org/sites/default/files/documents/goldstandard_impactinvestment.pdf

Just to give an example. If an efficient cookstove distribution project in rural Ethiopia is audited and approved for the issuance of certified offsets, there are huge additional benefits to the local community which can be measured in actual dollars saved and time saved. Less time spent collecting firewood, reduced respiratory diseases, decreased forestation, more time for productive economic activity.

I don't have the time to read 58 pages, but what you mention has nothing to do with carbon offsets. I assume it's about burning less wood for cooking, which obviously reduces local air pollution. But they should do that with or without selling carbon rights. Meanwhile we're burning more and more biomass for energy production, and we call that "green". That seems like double standards to me.
Besides, if they collect less firewood in rural Ethiopia, eventually that firewood will re-enter the carbon cycle one way or another, so the entire offset is lost while the CO2 is still in the air.

First of all, I listed several rigorous academic studies, including one by the MIT Center for Energy and Environmental Policy Research. You did not challenge one single methodology or calculation in the studies. How come?

You can't expect someone to search and read through several scientific papers just because you claim something. Feel free to quote where it says Bitcoin transactions are directly responsible for CO2-emissions. I'm pretty sure it won't say that, because the emissions happen with or without transactions in a block.

Secondly, for someone who posts so much on a bitcoin forum it appears that there are worrying gaps in your fundamental understanding of how bitcoin works and especially of how mining works. The block reward is not a function of mining it is a consequence of it. You clearly don't understand the difference.

Your $1 in fees is irrelevant. Just as the fiat value of the amount of BTC you sent is irrelevant too. It doesn't matter if you sent 55 BTC to your partner or 0.001 BTC to your sister.

You've completely missed my point. It is as if you have a cargo plane with 2 passengers, and blame the passengers for all emissions, while the cargo is the real reason the plane is flying there.

An increase in the usage of voluntary offsets, by mining pools, by exchanges, by traders and by casual users. This would go along way to helping reduce the total global carbon footprint in a verifiable manner.

I meant an existing example. Carbon offsets are mainly a means to feel good about yourself while justifying and continuing emissions. And there's big money to be made.

[stompix]

There are a number of independent academic studies which attempt to calculate the carbon footprint of bitcoin. The primary methodology is to analyse localisation data for IP addresses of mining pools.

The primary methodology is wrong.
The last time I mined I was mining in a pool 2000km away from my country!
Mining pools are not necessarily miners, just as Walmart isn't growing all its cattle and spinach in the back of the store.

Based on location it can be deduced with a high level of probability / certainty whether a given IP address is receiving power from a coal powered plant or from a hydro plant, for example.

Again, this is stupid.
Just because there is a massive damn nearby or a nuclear power station 50 miles down the road it means nothing, this is not how the grid operates.

I don't want to stop people using bitcoin. I just want to find a voluntary way to make it more sustainable.

Taxes =/= voluntary.
/end