Reducing Bitcoin's Carbon Footprint

Bitcoin may be able to reduce its carbon footprint by going analog.

As I discussed earlier this year on the Nebeus Fireside chat on analogization of digital currencies, Bitcoin or any cryptocurrency, especially those involving proof of work, can use less energy by employing hybrid banknotes.

As a recap, hybrid banknotes are traditional banknotes that can transfer value over an electronic network when desired. So, let's say you create a series of Bitcoin (or Satoshi) denominated banknotes. Your 10,000 Satoshi note could pass hand to hand in offline transactions for months or years, using no electricity as there are no interactions with the blockchain, no need to verify transactions.

Verification only happens when your 10,000 Satoshi note makes an electronic transaction. This may only occur once in the lifetime of a note, which can run for years. Remember, just because your note can connect to an electronic network, that doesn't mean that it ever has to.

An added bonus to such an idea would be that locking up a substantial amount of Bitcoin in physical notes would dampen Bitcoin price volatility.