Background
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Reducing the block reward reduces the incentive to mine. It reduces the maximum energy price at which mining is profitable, reducing the energy use.
Bitcoins have value because they are accepted by full node users, from individual node operators, to exchanges and custodians like Coinbase. Anything else and the Bitcoins don't exist and are worthless. Like all currencies, Bitcoin has value because others recognize that they have value.
Idea
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Reduce the block reward by adding fewer coins to the UTXO set per block. This should be done gradually
Consensus layer
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This is a soft fork, because it tightens the
Some Possible Weaknesses
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- It will cost less than a nation-state of energy to reverse recent Bitcoin transactions.
- Some miners may protest and lobby exchanges.
- By pushing mining towards the cheapest energy sources, centralization increases towards Chinese miners.
- The Bitcoin network may split if consensus is not built before flag day.
However, given the current political headwinds and widespread public discussion around Bitcoin's energy use, it may be socially possible to ask individual users and major exchanges to install a version of Bitcoin with a reduced block reward.
Alternatives
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Instead of outright rejecting transactions (and the blocks that contain them) that attempt to spend increased block rewards, treat them as no-ops.