1. Proposal to incentivize Bitcoin mining with low-carbon energy sources through cryptoeconomic rewards.
2. Use of Energy Web’s ‘Green proofs for Bitcoin’ clean energy validation platform to permit miners to obtain low-carbon accreditation.
3. Energy Web plans to develop a platform for miners to register themselves and share their green keys for participation in the green incentive programme.
PayPal’s blockchain research group, Energy Web, and DMG Blockchain Solutions have partnered to propose a solution for ‘green’ Bitcoin mining. The solution involves incentivizing miners to use low-carbon energy sources through cryptoeconomic rewards. Despite some miners turning to renewables, Bitcoin mining still has a high energy consumption, with estimates suggesting it emits around 85Mt of carbon dioxide equivalent annually.
The proposal involves using Energy Web’s ‘Green Proofs for Bitcoin’ clean energy validation platform to allow miners to obtain low-carbon accreditation for their operations. Miners associated with ‘green keys’ are rewarded by receiving preferential on-chain transactions with low fees and locked Bitcoin rewards in a multi-signature payout address. This incentivizes them to mine these transactions exclusively.
The use of cryptoeconomic incentives is common in web3 to encourage desired behaviors, such as generating energy from rooftop solar PV. DMG successfully demonstrated the solution by mining low fee transactions and claiming the incentive after two days, showing its effectiveness.
Energy Web plans to develop a platform for miners interested in participating in the solution to register themselves and share their green keys. Other certification bodies could also issue interoperable credentials to Bitcoin miners to prove sustainability and qualify for the green incentive program.