Since Bitcoin’s inception in 2008, the interest in Bitcoin and other digital currencies has grown significantly. Between 2010 which saw the very first exchange created which made it simpler to trade bitcoin, to the now arguably saturated marketplace for cryptocurrency exchanges, inadequate governance at cryptocurrency exchanges and other centralised crypto institutions has manifested in poor consumer outcomes. 

In this article, we explore some of the most notable cases of hacking, theft, poor risk management and fraud to date, highlighting the need for greater transparency in this space and stronger investor protections. 

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Oftentimes within the Environmental-Social-Governance (ESG) framework, Governance can take a back seat to the Environmental and Social elements because they are seen as having farther reaching or more relevant impacts. On the other hand, some of the biggest disasters in human history, such as the Chernobyl Nuclear Accident, can be  purely attributed to failures in governance. 

In general terms, governance refers to the process of how decisions are made and implemented. Within the context of a certain business or government, by developing and maintaining a governance structure, the goal would be to help create a better organisation or government through improving factors such as flexibility and inclusion, company culture and the day-to-day sustainability of operations. A company or government’s governance structure can be optimised through pulling several levers, most notably the distribution of the rights of various members of the company, and optimising logistics and decision-making processes.

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Conceived in the wake of the 2008 global financial crisis, Bitcoin was created as an alternative to central bank-issued currencies. Years later, and the case for Bitcoin as a monetary rival has been furthered by concerns of high inflation in many smaller or less developed countries, which is devaluing citizens’ savings as the price of staple goods rise. 

Due to the fact that fiat currencies are tied to an economy and a central bank, they may be prone to unreliable monetary policy, unlike Bitcoin, whose value is driven by the invisible hand of the market and has a strictly fixed supply baked-in at the protocol level. Consequently, this article explores the potential that Bitcoin has to protect people’s wealth in the face of an unstable, and inflationary sovereign currency.

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As with most things related to analysing Bitcoin, much of the data that was presented in the first four parts of the series has changed. Luckily, we took a first-principles approach, where we illustrated how Bitcoin’s power-draw (measured in GW) can be calculated by anyone, by simply multiplying the network hashrate by the average network efficiency.

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The need to reduce poverty and support economic development in less developed countries is typically addressed by wealthier nations and global organisations such as The United Nations, World Bank and The International Monetary Fund, in part through the instrument of foreign aid. However, aid effectiveness has long been a topic of scrutiny as its impact is often undermined by systemic issues faced by recipient countries. At the core of foreign aid’s problems is its centralised system which is subject to political pressure on the donor and recipient sides, leading to criticisms such as a lack of transparency, corruption and waste. In this article, we aim to provide a new perspective on foreign aid that employs Bitcoin, and utilises its decentralised, peer-to-peer characteristics to potentially reinvent what aid might look like altogether.

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In this piece, we will discuss the relationship between energy, electricity and emissions, and why the distinction is necessary to make. We will showcase Bitcoin’s current electricity mix, and what that means in regards to energy use and emissions in a global context.

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One of the most socially compelling use-cases for Bitcoin is its potential to transform the remittance market, which involves the payment of money from one party to another, usually across borders. Whilst the cost of remittances has trended gradually downward, it is still relatively high compared to domestic bank transfer fees, particularly for smaller transfers of money. 

With the power of Bitcoin’s layer 2 protocols, chiefly the Lightning Network, the cost of remittances can be reduced to negligible amounts, allowing one to send and receive money almost instantly. This presents significant potential cost savings for the millions of people who send and receive remittances that would otherwise have to relinquish some of their money as a fee for traditional money transfer providers.

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This is the third instalment of Monochrome Research’s E in ESG series and will discuss the state of the Bitcoin Mining network. Topics to be explored in this report are the current state of mining hardware, and industry-wide electricity and energy use, and emissions.

Ever since Application-Specific Integrated Circuits (ASICs) became the dominant computing force behind Bitcoin Mining in late 2013, improvements in hashing power per unit of energy have improved at a steady, yet dramatic pace.

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It can be challenging to reimagine the current financial system. However, whilst most of us will continue to have access to and use traditional banking systems in the foreseeable future, Bitcoin may play a more significant role for the 31% of adults globally that remain unbanked and underbanked under the status quo. In this article, we aim to discuss the key features that Bitcoin’s technology offers this group, and how it differentiates itself from the traditional system that billions of people struggle to engage with.

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In this second instalment of the E in ESG series from Monochrome Research, we explain Bitcoin’s Proof-of-Work (PoW) consensus mechanism, the source of its power consumption. An explanation of both endogenous and exogenous incentives for Bitcoin miners will also be given, and a breakdown of the Bitcoin mining industry’s position as a near-perfectly competitive market will be analysed.

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