The company expects that the experimental incentive will spark greater discussion and innovation around Bitcoin. It is soliciting industry feedback on potential improvements.
Bitcoin mining is the process by which individuals known as “miners” solve cryptographic puzzles to generate new blocks of transactions on a cryptocurrency’s blockchain. The fastest miners earn bitcoins for their efforts.
Miners utilize big, energy-hungry computers to solve these puzzles fast. According to the plan, “green miners” who use sustainable energy sources would be granted unique “green keys,” which are linked to their public keys.
Bitcoin transactions would be preferentially directed to environmentally friendly miners by attaching lower fees, along with an additional BTC reward locked in a multisig payout address that only these green miners can access. The proposal explained that “Green miners will be incentivized to mine these transactions since they will be the only ones eligible for the additional “locked” BTC reward.” This incentivizes sensible, profit-driven miners to use low-carbon energy sources in order to earn more Bitcoin.
Green miners can participate in the incentive scheme by registering and sharing their green keys on the platform. “The solution outlined here aims to achieve a good degree of decentralization, ease of implementation, and trust independence while distributing incentives,” the company said.
According to the Rocky Mountain Institute, the process requires an estimated 127 terawatt-hours (TWh) of energy every year, which is more than Argentina’s total energy consumption.