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PayPal Unveils Modern Rewards Plan For Sustainable Bitcoin Mining

Global payments company PayPal has made a bold announcement with a pioneering proposal. The plan proposes using a “cryptoeconomic” award system to encourage environmentally friendly mining.

The suggested structure, created in association with Energy Web and DMG Blockchain Solutions, attempts to increase the financial appeal of low-carbon Bitcoin mining.

It accomplishes this by directly putting incentives in place on the Bitcoin network.

The Green Key Incentive Mechanism

At the heart of PayPal’s proposal lies a novel incentive structure designed to reward miners who adopt renewable energy sources. 

Under this system, miners that leverage sustainable energy would be accredited with special “green keys” associated with their public keys. 

These “green miners” would then be prioritized for Bitcoin transactions by attaching lower fees and an additional locked Bitcoin reward in a multi-signature payout address that only they can claim.

The proposal offers an additional Bitcoin reward to incentivize miners to use low-carbon sources, fostering a sustainable mining ecosystem.

As PayPal’s Blockchain Research Group explains, “Green miners will be incentivized to mine these transactions since they will be the only ones eligible for the additional ‘locked’ BTC reward.”

Leveraging Energy Web’s Green Proofs For Certification

PayPal’s proposal leverages Energy Web’s “Green Proofs for Bitcoin” platform to ensure the credibility and transparency of the certification process. 

This innovative platform will assess miners based on their clean energy usage and grid impact scores, enabling them to register and share their “green keys” as participants in the incentive program.

PayPal’s Blockchain Research Group has successfully tested the proposed solution with Bitcoin miner DMG Blockchain Solutions Inc. 

During these tests, the research group broadcasted multiple low-fee transactions to observe the effectiveness of the incentive mechanism under different levels of on-chain transaction volume.

Seeking Industry Feedback & Exploring Alternatives

PayPal views the “cryptoeconomic” incentive system as an experimental effort to promote sustainable Bitcoin mining . They emphasize the importance of industry feedback to identify areas for improvement and refinement.

The firm also recognizes the existence of alternative approaches, such as exploring private channels like the Lightning Network or smart contracts. However, these alternatives may have trade-offs regarding implementation complexity and trust dependencies. 

As PayPal’s Blockchain Research Group notes, “The solution outlined here aims to achieve a good degree of decentralization, ease of implementation, and trust independence while distributing incentives.”


PayPal’s proposal for “cryptoeconomic” incentives aims to address the environmental impact of Bitcoin mining.

It leverages economic incentives within the Bitcoin network to promote sustainability.

The goal is to guide the mining industry towards a more environmentally conscious future while upholding decentralization and trust independence.

However, the success of such an initiative will likely hinge on widespread industry adoption, collaboration, and continued innovation. PayPal is gathering feedback and exploring improvements for its proposed incentive system.

The cryptocurrency community is closely monitoring its development and potential implementation. 
Ritika Sharma With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM. shares this Contents always with License.

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