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PayPal Introduces Sustainable Bitcoin Mining Rewards

Collaborating with Energy Web and DMG Blockchain Solutions, PayPal’s Blockchain Research Group suggested utilizing “cryptoeconomic incentives” to motivate Bitcoin miners to use energy sources with lower carbon emissions. 

 

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According to the proposed plan, miners who use sustainable energy sources will be recognized as “green miners.”. Green miners will receive unique “green keys” rewards associated with their public keys, symbolizing their dedication to eco-friendly mining methods. 

As a result, Bitcoin transactions will give preference to these green miners, giving them lower fees and an extra incentive. This additional reward will be secured in multisig payout address accessible solely to green miners, guaranteeing that only they can access this supplementary benefit. 

The platform utilizes the “Green Proofs for Bitcoin” platform by Energy Web, which certifies miners based on their clean energy usage and grid impact. Miners can enroll their green keys on this platform, indicating their participation in the incentive program. According to PayPal, this approach was successfully tested with DMG Blockchain Solutions Inc., where various low-fee transactions were transmitted to assess the system’s efficacy across varying transaction volumes.

This initiative encourages rational, profit-seeking miners to opt for low-carbon energy sources to increase their Bitcoin earnings. According to the National Oceanic and Atmospheric Administration, utilizing low-carbon mining technologies helps decrease carbon emissions and mitigate global warming.

Meanwhile, critics argue that the solution is being developed amidst concerns about the significant strain that bitcoin creation imposes on local power systems and taxpayers in the US. 

Critics have attempted to ban Bitcoin mining, citing concerns about its contribution to pollution and other environmental risks. 

Despite this, the company anticipates that this experimental incentive will start a broader discussion and innovation within the Bitcoin community and it is actively seeking industry feedback to explore potential enhancements.

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Sophia Cruz
Financial Writer - Asian & European Desks
Sophia is an experienced writer, reporter and newsdesk member, mostly on the financial sectors. For the past 5 years Sophia has covered a wide variety of topics such as the financial markets, economics, technology, fin-tech and trading. Sophia has been a part of the FX Leaders team since 2017 and works on producing valuable content and information for traders of all levels of experience.
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