PayPal, EnergyWeb propose incentive program for bitcoin miners who go green

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.