With the advancement of alternative cryptocurrencies out there and its potential for renewable energy and environmental preservation comes Solarcoin. I had a lengthy talk with François Sonnet, member of the Solarcoin Foundation to discuss the fine details regarding this cryptocurrency.
Jay-R Gatdula: Fine day, François. Let’s talk a bit about Solarcoin. I’m fairly curious as to what this cryptocurrency is.
François Sonnet: Hi, Jay-R. Solar Power is the true reason motivating my quest in bitcoin, and Bitcoin is just a means to incentivise people into doing better actions, ie: producing solar electricity so we can all breath a cleaner air.
Launching Solarcoin and Solarchange is difficult because as a cryptocurrency, the target market is actually very specific. In our field we are therefore targeting people both aware of crypto and solar energy. Solarcoin aims to deliver a free incentive to solar power producers, as a means to produce more renewable electricity instead of being produced by traditional fossil fuels. It is also difficult because people associate Solarcoin to bitcoin (and all the negativities of it) where instead Solarcoin is aiming to deliver a positive-only message: indeed as a reward for solar producers, Solarcoin has the only goal to incentivise people to produce more solar power/clean power.
JG: Can you share some definite advantages of Solarcoin over other crypto-related ventures?
FS: It’s free. Anybody who owns a solar plant, be it a small household installation of 5kw or a large-scale solar field of several hundred MW, they can redeem their solarcoins for free by registering to our online platform at Solarcoin, Solarchange, or Solcrypto. Therefore, there is no need to mine the coin and spend a tremendous amount of money and power in order to obtain bitcoin/solarcoins. Of course, anybody can go on an exchange and purchase solarcoins BTC-SLR (on bittrex for example). We believe that when the coin will achieve 20 to 30USD/coin, it will actually have the power to incentivise independently solar production anywhere in the world. By acting as an independent incentive (instead of current Feed-In Tarifs which are subject to government decrees), we believe Solarcoin could help bring the share of global energy production to a level of at least 10% of worldwide energy demands.
What’s more, where bitcoin serves no purpose other than transfer of money (something the Swift protocol has been doing for a long time) and given the breaches of security in BTC (hacking etc.) associated to the cost of using BTC (you have to buy it on an exchange whereas you get SLR for free if you produce solar power), we believe the number of users of BTC will take time to take off. Whereas btc has 2.000.000 to 3.000.000 wallets outstanding currently (=amount of users, roughly), SolarCoin has the potential to reach out to 6.000.000 users => this is the amount of households currently already owning a solar installation on their rooftop globaly – this number is on the rise and doesn’t account for larger installations (5kWp and up)! So the amount of potential users of the currency is actually much larger than for BTC.
Currency is a means to exchange goods and value : with the number of users of SLR rising (and given the fact that claiming and receiving SLR is free, we don’t see why they wouldn’t actually use the coin!), we believe SLR could be a much more active CCY than BTC.
JG: What characteristics of Solarcoin do you consider the most revolutionary?
FS: SLR actually delivers something people are in need of: clean energy. By rewarding people with 1SLR for each MWh that their solar installation is producing, we believe Solarcoin has the capacity to incentivise at a global scale the use of renewables.
JG: What do you think Bitcoin needs to become a more reliable form of payment?
FS: BTC needs more backing at a Federal level (US and EU as well as China and Japan/India) as well as more companies to accept payment in BTC. In order for companies to accept payment in BTC, the currency should actually be less volatile. In order to be less volatile, more companies need to chip into BTC. So again a chicken and the egg story. There also needs to be more regulation at international level + more means to provide BTC (ATM’s, businesses accepting payment in SLR). The killer app would be the smartphone that can pay (in less than 5seconds, ie. the time needed for a Visacard transaction payment) for any transaction with BTC/SLR.
I believe Bitcoin has the potential to help more business being done “officially.” Indeed, there are many markets (Southern countries and developing countries) where 30, 50, or 70% of the economy is actually directed through “black channels,” shadow-banking and the like…
Bitcoin payments will enable more companies/countries to do business “regularly.”
With this in mind, Asian countries should follow suit to Spain and Switzerland, where any local transaction performed in BTC will actually be exempt of VAT. I believe there needs to be more countries that follow suit to this.
JG: What do you think is the main factor inhibiting it from going mainstream?
FS: Hacking risks + there is currently no real need for any virtual currency. The Blockchain concept and smart contracts associated are genius concepts, and banks will probably be working quite fast in the near future with these technologies; however, the BTC CCY will take time as it doesn’t really respond to a market demand. Why do we need BTC? We don’t. So in order to get somewhere, BTC should actually act as something useful. It doesn’t.
Solarcoin in sharp contrast actually responds to a market need: there is too much pollution out there, not enough incentives for producing clean/renewable energy (because governments lack funding to finance these expensive FIT programmes) and instead of acting as a plain currency (such as BTC), SLR is actually working as a “reward” for producing solar energy.
JG: What about the Asian market? How do you think bitcoin will impact Asian countries?
FS: Asian cities are very well connected and have the potential to act as major users of cryptocurrencies. They would need a very very good 4G network for this so that any payment in the city may be delivered in a matter of seconds. Asian cities should do more for their businesses and banks to work with crypto.
JG: How about cryptocurrency regulation?
FS: BTC needs to be heavily regulated and monitored, otherwise the mainstream community will not get into it. Gambling currently represents 90% of BTC transfers but in an efficient economy using BTC, ie. with much more users using BTC, the share of gambling will drop down to