PayPal Proposes Crypto Rewards to Accelerate Sustainable Bitcoin Mining
In a pioneering move to foster sustainability in the blockchain industry, PayPal’s Blockchain Research Group, in partnership with Energy Web and DMG Blockchain Solutions Inc., is incentivizing Bitcoin miners to adopt green energy practices.
This initiative leverages cryptoeconomic incentives to encourage using low-carbon energy sources, a crucial step given Bitcoin’s significant environmental impact.
Accelerating Sustainable Bitcoin Mining
Annually, Bitcoin mining is estimated to produce 85 million metric tons of carbon dioxide. This emphasizes the need for sustainable practices in Proof-of-Work (PoW) networks.
The proposed system rewards miners who verify transactions using renewable energy with additional Bitcoin, using a mechanism where transactions are preferentially routed to “green miners.”
These miners, identifiable through public keys designated as “green keys,” will receive transaction fees and locked BTC rewards. This setup promotes greener mining practices and enhances the overall efficiency and security of the Bitcoin network.
Bitcoin Electricity Consumption. Source: University of Cambridge Parallel to this green initiative, PayPal has announced significant changes in handling non-fungible tokens (NFTs). Starting May 20, PayPal will withdraw buyer and seller protections for NFT transactions over $10,000. The decision was made due to concerns about verifying order fulfillment and the high volatility in the NFT market.
Transactions under this amount will still be protected, provided they meet certain conditions.
Furthermore, in a strategic collaboration with Singapore-based Triple-A, PayPal is set to enhance digital payment diversity by integrating its stablecoin, PYUSD, into Triple-A’s offerings. Scheduled for launch by the end of June, this integration aims to bolster PayPal’s presence in the cryptocurrency market. Particularly, as Triple-A’s payment volumes continue to surge.
“PayPal has the firepower to make it available to a lot consumers at one go. Nobody has this power today,” Triple-A CEO Eric Barbier said.
Read more: 7 Best Crypto Platforms To Buy PayPal Stablecoin (PYUSD)
This suite of initiatives by PayPal highlights a strategic approach to addressing the environmental impacts of cryptocurrency mining and adjusting policies for responsibility and innovation in the blockchain space.
