PayPal is promoting incentives for bitcoin miners who take steps to reduce their operations’ environmental impacts.
The PayPal Blockchain Research Group, in tandem with non-profit EnergyWeb, has developed a clean energy validation platform to monitor and reward less energy-intensive bitcoin mining operations, PayPal said Monday in a blog. The solution’s development comes as bitcoin generation puts immense strain on local electrical grids and taxpayers in the U.S., according to critics.
Bitcoin mining is a process in which people called “miners” solve cryptographic puzzles to create new blocks of transactions on a cryptocurrency’s blockchain, with the fastest miners earning bitcoins for their work. To solve those puzzles quickly, miners use large, energy-guzzling computers.
PayPal’s proposed solution will distribute bitcoin to “green” bitcoin miners, or individuals who use low-carbon energy sources in their mining operations. Using low-carbon mining methods limits carbon emissions, slowing global warming, according to the National Oceanic Atmospheric Administration.
Critics have sought to limit bitcoin mining, arguing that it creates air, water and noise pollution, among other environmental issues. The process consumes an estimated 127 terawatt-hours (TWh) per year, or more than the energy used in Argentina, according to global energy non-profit Rocky Mountain Institute.
Meanwhile, a New York Times analysis shows that bitcoin miners collectively use roughly seven times the energy Google uses for its global operations per year.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
About Author
Elizabeth Napolitano is a data reporter covering business and technology news, with a focus on cryptocurrencies. Prior to joining The Block, Elizabeth reported on BigTech, AI, crypto and videogames for CBS Moneywatch. As a CoinDesk reporter, she covered DeFi, NFTs and U.S. courts. She holds an MA in Journalism from CUNY. Follow her on X: @LizKNapolitano