PayPal’s Blockchain Research Group, along with Energy Web and DMG Blockchain Solutions Inc. (“DMG”) has proposed an initiative to expedite the transition to clean energy in Bitcoin mining, PayPal’s stablecoin PYUSD said in blog.
PayPal’s Blockchain Research Group, in partnership with EnergyWeb, introduced a clean energy validation platform. This platform allows Bitcoin miners to earn low-carbon accreditation for their operations.
These “green miners” receive rewards via public keys (referred to as green keys), and on-chain transactions are directed to them preferentially. Transactions broadcasted with low fees and a BTC reward “locked” in a multisig payout address attract green miners, as they are the only ones eligible for the additional locked BTC reward.
This initiative suggests using cryptoeconomic incentives to encourage Bitcoin miners to adopt low-carbon energy sources. The research paper details how this approach not only rewards miners for environmentally sustainable practices but also incentivizes entities to prioritize these miners for on-chain transactions.
In blockchain industry, sustainability remains a prominent topic. With blockchain networks, particularly proof-of-work (PoW) networks like Bitcoin, energy consumption is a concern.
Recent estimates indicate that Bitcoin mining alone generates around 85 million metric tons of carbon dioxide equivalent annually (as of April 02, 2024). Despite the emergence of new blockchain consensus mechanisms, Bitcoin’s PoW architecture continues to endure.
Cryptoeconomic incentives drive rational behavior among miners. Miners anticipate rewards (bitcoin BTC) that exceed the resources they invest in mining. Bitcoin has demonstrated the effectiveness of its decentralized miner community in maintaining a secure and censorship-resistant ledger. Now, the focus is on whether additional cryptoeconomic incentives can promote environmentally sustainable actions within the community.
