Institutional Glossary

Non-Rivalrous

★★★

Energy

Energy usage that does not displace other consumers.

Using curtailed or stranded energy that would otherwise be wasted means the mining operation isn't competing with households or hospitals for power.

Fast Frequency Response (FFR)

★★★

Energy

Service where miners reduce load instantly to stabilize grid frequency.

Miners act as automated breakers, shedding load within seconds when grid frequency dips, preventing cascading blackouts.

Interconnection Queue

★★★

Energy

Backlog of energy projects waiting to connect to the grid.

Miners can co-locate with renewable projects stuck in the queue, providing immediate revenue and allowing projects to be built before transmission lines are ready.

Duck Curve

★★★

Energy

Graph showing timing imbalance between peak renewable production and peak demand.

Miners consume the "belly of the duck" (excess midday solar), preventing negative pricing and curtailment, then shut down as the "neck" rises (evening peak).

Three Lines of Defense

★★★

Governance

Risk management framework: Operational Management, Risk/Compliance, Internal Audit.

Digital asset operations must segregate execution (Line 1) from policy enforcement (Line 2) and independent verification (Line 3) to prevent fraud.

GHG Protocol

★★★

Reporting

Global standard for measuring greenhouse gas emissions.

Defines Scopes 1, 2, and 3. For institutional investors, digital asset holdings fall under Scope 3, Category 15 (Investments).

Attribution Problem

★★★

Reporting

Difficulty in assigning emissions from a decentralized network to a specific holder.

Since specific coins cannot be traced to specific energy sources, "Network-Level Attribution" (proportional share of global grid mix) is the required methodology.

Specie Insurance

★★★

Governance

Insurance covering physical loss of assets (private keys) in cold storage.

Unlike FDIC insurance for deposits, Specie coverage treats crypto as physical property (like gold bullion). It does not cover hacking of "hot" (online) wallets.

Additionality

★★★

Energy

Ensuring renewable energy purchases fund *new* generation capacity.

Buying existing RECs does not clean the grid. True leadership requires funding new wind/solar projects that wouldn't exist without the mining load.

Locational Matching

★★★

Energy

Consuming energy in the same grid region where it is generated.

Buying RECs from Texas while mining in Kentucky is "greenwashing" because of transmission constraints. Valid claims require local matching.

Greenwashing

★★★

Reporting

Deceptive marketing practices used to exaggerate environmental stewardship.

Claiming "100% Green" based on low-quality, unbundled offsets while consuming fossil fuel power. Auditors must verify physical power contracts (PPAs).

Transition Risk

★★★

Reporting

Financial risk arising from the transition to a low-carbon economy (e.g. carbon pricing).

For digital assets, this primarily manifests as regulatory taxes on carbon-intensive proof-of-work mining or cross-border adjustment mechanisms.

CBAM

★★★

Reporting

Carbon Border Adjustment Mechanism; taxing imports based on embedded carbon.

EU legislation that could potentially apply to imported Bitcoin if classified as an "energy-intensive import," forcing institutional holders to prove renewable provenance.

Fiduciary Duty

★★★

Governance

The legal obligation to act in the best interest of stakeholders.

In crypto, this extends beyond profit maximization to include asset security (custody) and regulatory compliance.

Business Judgment Rule

★★★

Governance

Legal presumption that directors act in good faith and with due care.

To claim this protection for crypto acquisitions, boards must demonstrate they followed a rigorous "Board Decision Matrix" (Pillar 4) rather than acting on hype.