Energy Web platform to ‘green’ crypto mining
Image: MichaelWuensch on Pixabay
A partnership between PayPal’s blockchain research group, Energy Web and DMG Blockchain Solutions is proposing a solution to ‘green’ Bitcoin mining.
The basis of the solution is to incentivise Bitcoin mining with low-carbon energy sources with cryptoeconomic rewards.
While increasingly miners have been turning to renewables, the energy consumption of Bitcoin mining still remains a concern with an April 2, 2024 estimate suggesting that it is currently responsible annually for around 85Mt of carbon dioxide equivalent.
Moreover, even with new blockchain consensus mechanisms proliferating, Bitcoin’s proof-of-work architecture is considered likely to persist.
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The proposal is to use Energy Web’s ‘Green proofs for Bitcoin’ clean energy validation platform to permit Bitcoin miners to obtain low-carbon accreditation for their mining operations.
These ‘green miners’ are associated with public keys or ‘green keys’, to which rewards can be distributed.
On-chain transactions are preferentially routed to the green miners by being broadcasted with low transaction fees, but with some Bitcoin reward ‘locked’ in a multi-signature payout address.
The green miners will thus be incentivised to mine these transactions, as they will be the only ones eligible for the additional ‘locked’ Bitcoin reward.
The use of cryptoeconomic incentives is a common method within web3 to encourage a desired behaviour and, for example, has been seen to encourage homeowners to implement and generate energy from rooftop solar PV.
The solution was demonstrated by DMG as a Bitcoin miner with multiple low fee transactions broadcast to observe how effective the solution would operate under different levels of on-chain transaction volume.
In the tests DMG was able to detect the low fee transaction and mined the next block after two days to claim the incentive with no other miner picking up on it during the period.
The use of Energy Web’s Green Proofs for Bitcoin validation platform is considered a pragmatic but non unique solution to identify green miners.
It is suggested for example, that other certification bodies could be encouraged to issue interoperable credentials to Bitcoin miners that can be taken as proof of sustainability by the green incentive programme.
Energy Web also intends to develop a new platform for miners interested in participating in the solution, enabling them to register themselves and share their green keys.
The green incentive programme participants can then access this information to streamline the collection of green keys that can be used to generate and manage 1-of-n multi-signature payout addresses.
