PayPal launches incentive program for environmentally friendly bitcoin mining

PayPal recently launched a program with two partners to promote more environmentally friendly bitcoin mining. The program will reward crypto-currency miners using sustainable energy sources, certified by Energy Web's "Green Proofs for Bitcoin" platform. The initiative aims to reduce the environmental impact of bitcoin mining, in response to growing concerns about the CO2 emissions associated with crypto-currencies.

FACTS

• PayPal recently announced a partnership with Energy Web and DMG Blockchain Solutions to create a program to promote more environmentally friendly bitcoin mining.

• The program will reward crypto-currency miners using sustainable energy sources, as part of a collaboration with PayPal's Blockchain Research Group (BRG).

• The first stage of the program involves certifying "green" miners using the "Green Proofs for Bitcoin" methodology developed by Energy Web. This guarantees that these miners use clean energy sources.

• The second step is to preferentially route mining transactions to these "clean" miners. To achieve this, PayPal plans to lower the commission charged by miners on each transaction, which discourages most miners; "green" miners, on the other hand, will be incentivized by holding a green cryptographic key, enabling them to be remunerated with a larger fraction of Bitcoin.

CHALLENGES

• Reducing Bitcoin's carbon footprint: this initiative responds to the growing urgency of reducing the environmental impact of bitcoin mining, which generates significant carbon dioxide emissions every year. The solution envisaged by PayPal does not address the structural problem of Bitcoin mining, which is based on the "Proof of Work" principle and therefore encourages a high expenditure of energy to obtain each Bitcoin. Instead, it aims to create a virtuous circle by directing transactions towards greener energy sources.

• Encouraging green energy in the world of mining: as environmental concerns are increasingly taken into account by governments and regulators, this program aims to encourage the adoption of green energy practices in the crypto-currency mining sector.

MARKET PERSPECTIVE

• This initiative could shape the future of the sector by promoting a greener approach to bitcoin mining and encouraging other market players to follow suit.

• By offering financial incentives to miners using low-carbon energy sources, PayPal hopes to encourage a transition to more sustainable bitcoin mining.