PayPal proposes ‘cryptoeconomic’ rewards for sustainable Bitcoin miners

PayPal proposes enhancing the profitability of eco-friendly Bitcoin mining by offering extra incentives directly on the Bitcoin network for miners.

PayPal’s Blockchain Research Team, in partnership with Energy Web and DMG Blockchain Solutions, suggested a method called “cryptoeconomic incentives” to motivate Bitcoin miners towards using eco-friendly energy resources in their operations, as mentioned in a blog post published on April 22.

The company expects the trial of this incentive to spark more conversations and fresh ideas about Bitcoin and welcomes industry input for possible enhancements.

According to the plan, miners relying on eco-friendly energy would receive distinctive “green labels,” linked to their regular cryptographic identifiers.

Green miners would receive priority in processing Bitcoin transactions due to lower fees attached, along with a pledged reward in a multisignature wallet, which only the eco-friendly miners are authorized to withdraw.

“Mining transactions in a green way will become more attractive for miners as they are the sole candidates to obtain the extra “secured” Bitcoin reward.”

Miners who adopt low-carbon sources to produce Bitcoin are encouraged with additional rewards, motivating them to act in an economically sensible and eco-friendly manner.

PayPal proposes ‘cryptoeconomic’ rewards for  sustainable Bitcoin miners

Based on the study, the suggested approach makes use of Energy Web’s “Green Proofs for Bitcoin” system to certify miners based on their clean energy usage and grid influence ratings.

In simpler terms, if you’re a green miner, you can sign up and submit your green keys through the program for eligibility in the incentives scheme.

According to PayPal’s BRG, they have successfully trial-run their proposed solution in collaboration with Bitcoin miner, DMG Blockchain Solutions Inc.

The test transmitted several affordable transactions during its duration to assess their impact under various degrees of network transaction activity.

Based on the transaction load, some transactions may take a considerable amount of time to be confirmed or ultimately get discarded by the network. This situation raises the probability that “green miners” will process those transactions instead.

Another method could include delving into exclusive avenues like the Lightning Network or smart contracts for transactions. However, this path comes with complications in terms of implementation.

According to PayPal BRG’s findings, the proposed solution strives for a significant level of decentralization, simplicity in execution, and trust autonomy as it disperses rewards.

CryptoMoon reached out to PayPal for more information about possible collaboration, but hasn’t gotten a quick answer yet.

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2024-04-23 07:00