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Real Talk: Does Eco-Friendly Cryptocurrency Exist?

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Cryptocurrency is a buzzword in the financial and technological world. It has become an ideal investment asset and online payment method. In other words, many people are relying on cryptocurrencies to conduct online transactions. According to CNBC, 1 in 10 people has invested in cryptocurrencies.

Nevertheless, as other sectors strive to go green, cryptocurrencies have not received much attention. But that is not to say nothing has been done, no! The industry players have made great strides in making the cryptocurrency industry eco-friendly. This is important, because cryptocurrencies have traditionally had a bad impact on the environment.

In May this year, Tesla halted Bitcoin payment for their products due to environmental concerns. According to Elon Musk, they are considering other eco-friendly options, precisely using less than one percent of Bitcoin’s energy consumption. But this begs the question, are there eco-friendly cryptocurrencies? According to various coin predictions, YES, there are a number of eco-friendly cryptocurrencies, some of which are predicted to have a rather bright future.

Bitcoin Mining

To understand the environmental concern associated with cryptocurrencies, it is imperative that we explore Bitcoin mining. Essentially, cryptocurrencies are digital currencies (tokens) that run on blockchain technology.

Cryptocurrencies such as Bitcoin are produced through mining. The mining activity consumes a lot of electricity and requires highly powerful computers. In addition, the process uses energy from non-renewable sources such as coal which produces harmful emissions.

Bitcoin’s mining process uses a Proof of Work (POw) mechanism to verify transactions and secure the whole blockchain technology.  Proof of work blockchain means expending effort to solve a mathematical puzzle and prevent anyone from cheating the system. The production process becomes even more intense and complex as more Bitcoins are mined.

According to the University of Cambridge Bitcoin Electricity consumption index, Bitcoin mining consumes 100 Terawatt Hours annually. The energy consumption increases as the value of Bitcoin rises. Without a doubt, the mining process has a negative impact on the environment. This has necessitated the innovation of eco-friendly cryptocurrencies. A new report from European Business Review has showed that more eco-friendly cryptocurrencies are being developed and gaining popularity.

Environmentally Friendly Cryptocurrency Options

The globe is moving towards a green environment, and so should the cryptocurrency industry. The good news is the market is already endowed with eco-friendly options. Many digital currencies use renewable energy sources such as solar energy. Now let’s get to the crux of the matter. Here are six eco-friendly cryptocurrency options. 

1. Cardano (ADA)

Cardano is the third-largest cryptocurrency, making it a leading eco-friendly crypto. It is more scalable and environmentally sustainable than Bitcoin and Ethereum – the two largest cryptocurrencies in market cap. ADA production is based on peer-reviewed research and evidence-based methods.

The cryptocurrency uses the Proof of Stake (POS) algorithm for mining, which considers the amount of stake the miner holds. This method uses as little as 0.01% of the energy used by the Bitcoin network, which is based on POW.

Besides being used as a digital currency, the Cardano platform can be used to develop decentralized apps through digital contracts. It is also highly secured against theft and cyber-attacks. According to the ADA founder, Charles Hoskinson, the cryptocurrency only uses 6 Gigawatt hours, according to the founder. 

2. IOTA

IOTA production does not require miners. Participants only come in for transaction verification. In addition, the crypto currency operates in low-tech devices that consume minimal energy. The cryptocurrency uses Fast Probabilistic Consensus to reduce energy consumption hence boosting energy sustainability. Each Iota transaction consumes a millionth of Kilowatt-hour, far less than established financial payment systems like MasterCard and VISA. There are plans to upgrade the transaction size to 1.7 bytes which could further reduce energy consumption significantly. Chrysalis upgrade would reduce the energy consumption by up to 95% to millions of kWh per transaction. 

3. Chia 

Unlike Bitcoin mining, Chia production happens through farming. Essentially, it utilizes unused disk spaces on desktops and laptops. However, there is still work to be done in making the cryptocurrency fully environmentally friendly. Chia is associated with a shortage of hard drives, and electronic waste as the drivers become more defective more easily.

4. Bit Green

BitGreen is a community-driven virtual coin founded in 2017 to address gargantuan amounts of energy consumption by unsustainable digital currencies. It is based on a proof of stake algorithm using deterministic and Segwit proprietary Masternodes which use low energy. 

Essentially, the coin gives incentives when people take eco-friendly actions such as purchasing sustainable coffee and carpooling. Users also earn the Bit green currency when they volunteer in eco-friendly organizations. Additionally, you can earn a BITG by building Masternode or staking in a desktop wallet.

The company has established a non-profit foundation to manage the BitGreen project management. Here is an interesting thing. You can buy goods and services with the virtual coin on Bit Green partners or trade on crypto exchanges such as Crex24, Mercatox, and ProBitExchange.

5. Nano

The Nano model of dealing with environmental sustainability is twofold. First, it doesn’t require mining, printing, and minting, like other cryptos. The digital token platform uses an Open representative voting (ORV) system to vote for representatives who confirm blockchain transactions on behalf of other users. The sender and receiver get the job done.

Secondly, it uses energy-efficient block latte technology instead of blockchain digital architecture. Therefore, the production process doesn’t involve linear blockchain, which leads to competition and delays. The currency also boasts lightweight and scalability features.

6. Solar Coin 

The Solar Coin is quite a unique coin. Unlike usual crypto mining methods, it uses solar energy.  Every megawatt generated from the solar panel creates one solar coin. Therefore, crypto goes a notch higher to promote the use of non-renewable energy through installation and investment in solar energy.

The Future of Cryptocurrencies is Green 

The cryptocurrency industry is growing with no signs of slowing down anytime soon. While top cryptocurrencies contribute to the carbon footprint, the future is beaming with hope. Developers are introducing eco-friendly crypto in the industry every single day.

Digital currencies like Ethereum are set for major updates that involve a shift from proof of work to proof stake mining method. While the process will take quite some time, it is a step in the right direction.

Also, the Crypto Climate Accord will play a vital role in enhancing environmental sustainability. Essentially, the initiative brings together players in the blockchain and crypto industry with an aim of decarbonization by developing digital green solutions. The accord has the backing of 45 companies that are playing a critical role in achieving zero net emissions. With such great beginnings, there is no doubt the effort will culminate in a greener environment.

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