Dr. Jelle Zijlstra was the former Prime Minister of the Netherlands, President of the Central Bank of the Netherlands, and President of the Bank for International Settlements in Switzerland, with a long-standing engagement with the Swiss Chamber of Commerce in The Netherlands. In honour of this renowned economist, we recognize international leaders whose work champions economic national growth, generational-shifting innovation, global collaboration, or charitable commitments which dramatically improve the quality of life for society.
Financial importance of cryptocurrencies
Cryptocurrencies represent a new, decentralized paradigm for money. In this system, centralized intermediaries, such as banks and monetary institutions, are not necessary to enforce trust and police transactions between two parties. Thus, a system with cryptocurrencies eliminates the possibility of a single point of failure, such as a large bank, setting off a cascade of crises around the world, such as the one that was triggered in 2008 by the failure of institutions in the United States.
Cryptocurrencies promise to make it easier to transfer funds directly between two parties, without the need for a trusted third party like a bank or a credit card company. Such decentralized transfers are secured by the use of public keys and private keys and different forms of incentive systems, such as proof of work or proof of stake.
Because they do not use third-party intermediaries, cryptocurrency transfers between two transacting parties are faster as compared to standard money transfers. Flash loans in decentralized finance are a good example of such decentralized transfers. These loans, which are processed without backing collateral, can be executed within seconds and are used in trading.
The remittance economy is testing one of cryptocurrency’s most prominent use cases. Currently, cryptocurrencies such as Bitcoin serve as intermediate currencies to streamline money transfers across borders. Thus, a fiat currency is converted to Bitcoin (or another cryptocurrency), transferred across borders, and, subsequently, converted to the destination fiat currency. This method streamlines the money transfer process and makes it cheaper.
It is often overlooked that crypto mining has the potential to support and accelerate the global energy transition towards renewable energies by serving as an additional technology for the generation and storage of clean energy. How can this be? Crypto networks can serve as a flexible energy buyer of last resort to balance fluctuations in renewable power generation and demand. Thanks to rapid technological progress, solar and wind farms can now provide the least expensive energy, but they suffer from grid bottlenecks due to their unstable energy supply. Even in industrialised countries with a highly developed grid infrastructure, such bottlenecks, overloads, and fluctuations occur – however, surplus energy could be used for crypto mining.
Crypto mining as an ESG strategy
Against the backdrop of rising energy prices and a significant increase in expected shortages, the demand that scarce electricity be used for the real economy, and not for crypto mining, is justified. Also from an ESG point of view, the cryptocurrency network’s exorbitant energy consumption is problematic.
The electricity consumption of crypto mining calls for new approaches regarding the use of energy resources. Based on the fact that cryptocurrencies are here to stay, the Swiss Chamber of Commerce in The Netherlands thinks it is crucial to find ways how crypto mining can support the transition to a more sustainable economic model and future and how an ESG (environment, social, governance) strategy of building renewable energy power plants with the purpose of mining cryptocurrencies could deliver positive environmental results.
Earlier grid connection
Green power plants could be connected to the grid earlier and become profitable sooner thanks to bitcoin mining. The reason is that such projects could be built before lengthy grid connection studies are completed since bitcoin miners can use the energy until it becomes possible to sell it to the grid. Thereby, these green power plants become more attractive to investors looking for sustainable investment opportunities. In Texas, for example, with its large wind farms and deregulated electricity grid, 60 percent of bitcoin production is mined with renewable energy, allowing for very high investment returns with margins of 60 to 80 percent. Furthermore, listed bitcoin miners must meet both regulatory requirements and investor preferences on ESG and sustainability issues.
BIT49 accelerating the adoption of green energy worldwide
Construction of green power plants with the purpose of mining bitcoin and promoting other clean energy projects and initiatives require a high degree of accountability and measurability of the respective value chains. BIT49 has met these requirements and leverages the huge demand for green crypto mining to accelerate the adoption of green energy worldwide.
BIT49 is managed by technology and finance professionals, with Stanford MBA, Stanford PhD in computer science, and Harvard Law JD educations. The company is on a mission to leverage the massive demand for Bitcoin to radically lower the cost of green energy and accelerate green energy adoption globally
Social responsibility and green energy have proven to be important assets for the economic development of the global economy. BIT49’s management team focuses on accelerating the adoption of green energy worldwide while contributing to society and the environment. This is a key consideration for the Swiss Chamber of Commerce in The Netherlands to issue this year’s Dr. Jelle Zijlstra Award in the fields of Social Responsibility and Cryptocurrencies to BIT49.