The economics of Solarcoin are compelling and I acknowledge the noble environmental purpose of its built-in mission. But I don’t feel that the scaleability crisis with Bitcoin would be addressed (or sidestepped) with a switch to Solarcoin or modeling itself on Solarcoin. Bitcoin can only be fixed by replacing Proof-of-Work with another distributed consensus mechanism while preserving the competition, gaming and reward aspect of distributed bookkeeping among a large and diverse group of people / organizations who do not know each other.

The problem with addressing the environmental aspect alone, is that the economics of Proof of Work-based mining guarantees that any new, cheap (or free) energy source will be gobbled up by miners without significant benefit to the network and at a detriment to the greater society. (That is, it will take the new energy contribution away from consumers, manufacturing, transportation, etc).

To put the problem in context, we can think of it as an IF / THEN construct…

IF

• a) Bitcoin were to become a ubiquitous global currency recognized and used by billions of people
—and—
• b) it is adopted without replacing the POW energy hog at its core

THEN

then, the discovery of a new free source of energy would be siphoned away from society and block the greater contribution of climate change or the entry of new nations into the middle class.

In my lectures and writing, I have found this to be a particularly difficult construct to explain. I am constantly looking for ways to clarify the economic principles that create a Catch-22 as developers seek a solution that both addresses an insatiable energy consumption while also avoiding a proportional scale up of environmentally destructive behavior.

Here is one more analogy. It is a loose analogy, but I find it helpful in understanding the problem…

If you could study the number of car fatalities in a carefully controlled & measured region, you MIGHT find that the sudden introduction of seat belts, air bags and vehicle safety standards save lives. But you also might find that the number of lives saved is negligible, because the increased safety margin may embolden a large fraction of drivers to be less careful about speed, intoxication or distraction. That is, many individuals have an unconscious, built in threshold of the safety margin that they consider to be reasonable and balanced against their needs for fun and expediency.

Does this make sense? Do you see why it leads me to doubt that Solarcoin effectively addresses the particular problem of Bitcoin scaleability?