By PayPal unveiled a new program to encourage low-carbon Bitcoin mining on April 22. The payment giant plans to reward cryptocurrency miners using sustainable energy with Bitcoin.
The proposed eco-friendly initiative for Bitcoin miners is a collaboration between PayPal’s Blockchain Research Group (BRG), Energy Web, and DMG Blockchain Solutions, a publicly traded blockchain company.
Can New Initiative Motivate PayPal Bitcoin Miners?
We’re thrilled to announce that @energywebx and Green Proofs for Bitcoin #GP4BTC are collaborating with @Paypal on the Green Mining Initiative—an innovative approach to support Bitcoin’s decarbonization by financially rewarding miners who use clean energy
More information… pic.twitter.com/qvziZPq1GY
— Energy Web (@energywebx) April 22, 2024
According to PayPal’s announcement, the new drive will use Energy Web’s “Green Proofs for Bitcoin” platform. The network will certify PayPal Bitcoin miners based on their clean energy usage and grid impact scores. Green miners can register and share their green keys on the platform to participate in the incentive program.
The concept revolves around “green miners” verifying transactions routed to them via the platform in exchange for BTC rewards.
Bitcoin mining is the process of verifying transactions on the blockchain in exchange for incentives in the form of newly minted Bitcoin. The process is a power-heavy activity that has been criticized in the past for its impact on the environment.
Consequently, the firms hope this experimental incentive will motivate Bitcoin miners to use clean energy and deepen discussion and innovation in the Bitcoin community. PayPal is also seeking industry feedback for potential improvements.
The PayPal Miners program is a response to the rising concerns about the environmental impact of Bitcoin mining, as the operation reportedly generates approximately 85 million metric tons of carbon dioxide equivalent emissions yearly.
The mining operation has been a topic of discussion within government and regulatory circles as they move to reduce its environmental impact. Recall that US Joe Biden had proposed an electricity tax for crypto mining, and Arkansas passed bills for crypto mining restrictions.
PayPal Disclose Initial Experiment Result of Proposed Sustainable Energy Sources
The payment platform published a research paper that detailed that PayPal’s BRG conducted successful tests of the eco-friendly Bitcoin miners initiative with DMG Blockchain Solutions Inc., which broadcasted various low-fee transactions to observe its efficiency across different levels of on-chain transaction volume.
“Our expectation was that, depending on transaction volume, these transactions would either take a long time to confirm or eventually be dropped by the network,” the company stated. “This would increase the chances for green miners to pick up these transactions.”
Energy Web championing a cleaner, greener future with every transaction!
— Oyeyemi Samuel (@Sammyoyey) April 22, 2024
Following the Bitcoin Halving 2024 event last week, which reduced miners’ Bitcoin block reward of 6.25 BTC to 3.125 BTC, PayPal’s proposal would provide an additional source of revenue for Bitcoin miners who use low-carbon energy sources.
Meanwhile, Matteo Greco, research analyst at Fineqia International, had earlier stated that the Bitcoin halving could drive a greener Bitcoin mining network with more sustainable energy sources.
The research noted that reducing miners’ rewards, paired with a continually increasing Bitcoin hash rate, would affect the profitability of mining firms, which could lead miners to search for greater capital efficiency via sustainable energy sources.
Greco’s insight came after the January 2024 Bitcoin ESG Forecast data, which revealed that 54.5% of the Bitcoin network’s energy consumption was powered by renewable energy resources at the time.
Nevertheless, PayPal’s research paper detailed plans to drive platforms to direct on-chain transactions to eco-friendly miners, promoting a greener approach to Bitcoin mining.
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