PayPal, the international payments giant, has proposed to reward BTC miners with incentives built into the Bitcoin network, making sustainable mining attractive.
In a blog post dated April 22, PayPal's Blockchain Research Group encouraged Bitcoin miners to use low-carbon energy sources. The tech company suggested the use of "cryptoeconomic incentives".
New incentive for Bitcoin miners from PayPal
According to a report by Cointelegraph, international payments company PayPal, in partnership with Energy Web, is considering identifying Bitcoin miners who prefer renewable energy and rewarding them with additional BTC.
On April 20th, Bitcoin halving took place. With the halving, mining block rewards were halved. Bitcoin miners will earn 3,125 block rewards instead of 6.25 BTC block rewards. Thus, the costs of miners increased.
While the increase in production costs in particular was challenging Bitcoin miners, PayPal's new proposal attracted attention. PayPal aims to turn BTC miners green with an incentive that it hopes will contribute to innovation.
Under the proposal, Bitcoin miners that use sustainable energy sources will be characterized as "green miners". Firms' Bitcoin transactions will be preferentially directed to these green miners. In addition, an additional locked BTC reward will be given to the multisig payment address that green miners can claim.
PayPal believes that the additional BTC reward incentive for green miners will spread quickly to other miners. "This incentivizes rational for-profit miners to work with low-carbon resources to earn extra BTC rewards," the statement said.
