Apr 23, 2024 at 12:20In a bid to promote sustainability within Bitcoin mining, PayPal’s Blockchain Research Group (BRG) is suggesting a novel approach: rewarding miners who utilize eco-friendly energy sources with additional Bitcoin incentives.
Teaming up with Energy Web and DMG Blockchain Solutions, PayPal’s BRG has put forth a concept of “cryptoeconomic incentives” aimed at encouraging miners to adopt low-carbon energy practices. This proposal, outlined in an April 22 blog post, seeks to spark dialogue and innovation within the Bitcoin community and welcomes feedback from industry stakeholders.
Under this proposal, miners employing sustainable energy would be recognized as “green miners” and granted special “green keys” associated with their public keys. Transactions on the Bitcoin network would be directed preferentially to these green miners, offering lower fees alongside an additional BTC reward locked in a multisig payout address accessible only to them.
This setup incentivizes profit-oriented miners to opt for low-carbon energy sources to secure the supplementary BTC rewards. The proposed solution leverages Energy Web’s “Green Proofs for Bitcoin” platform, certifying miners based on their clean energy usage and grid impact scores.
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Miners can register and share their green keys on the platform as participants in the incentive program. PayPal BRG conducted successful tests of this solution with Bitcoin miner DMG Blockchain Solutions Inc., analyzing transaction effectiveness under varying on-chain transaction volumes.
The proposed approach prioritizes decentralization, implementation simplicity, and trust independence while distributing incentives. Although alternative methods like private channels or smart contracts were considered, they were deemed to entail greater complexity and trade-offs.
In conclusion, PayPal BRG’s initiative aims to strike a balance between decentralization and efficiency, fostering a more sustainable and environmentally conscious future for Bitcoin mining.
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