Although cryptocurrency is most well-known for its potential for financial loss, it is now coming under fire for another concern. Cryptocurrency has been the subject of much debate in recent months due to concerns about its environmental impact.
In a nutshell, this means that as bitcoin trading grows in popularity, so does the amount of energy needed to power it.
Since Bitcoin’s environmental impact has garnered a lot of attention in the last few months, some investors have opted to invest in greener alternatives to Bitcoin.
Is any of the more than 4,500 mineable currencies and tokens in existence sustainable?
In this article, we will be diving into the questions:
1. Is cryptocurrency eco-friendly?
2. Why is cryptocurrency bad for the environment?
3. What are the most eco-friendly cryptocurrencies?
4. Why Is Cryptocurrency Bad for the Environment?
Bitcoin mining has been deemed environmentally damaging by environmentalists.
They are concerned about the amount of computer processing power needed to mine cryptocurrencies.
Several tools are used in the mining process, including:
- High-performance computers compete for coins by verifying transactions.
- Complex algorithms require massive quantities of electricity.
Using coal, the dirtiest fossil fuel, as a source of energy.
Is Cryptocurrency Eco-Friendly?
As a result of the bad reputation of cryptocurrencies among environmentalists, eco-friendly alternatives are springing up all over the place, promising to do less harm to the planet.
It’s hoped that increasing the use of clean, renewable energy and reducing the consumption of fossil fuels will both benefit the industry.
A few of the best-known brands in the eco-friendly cryptocurrency space include Cardano, Chia, and IOTA.
What Are the Most Eco-Friendly Cryptocurrencies?
So, which cryptocurrencies have a better chance of sustaining themselves than Bitcoin? In no particular order, here are some of the leading contenders.
SolarCoin is a decentralized, worldwide currency that is not controlled by any single government.
SolarCoin can be spent and traded like any other cryptocurrency, but the platform intends to encourage real-world environmental activity: the production of verifiable solar energy.
An innovative approach to cryptocurrency, SolarCoin generates one coin for every megawatt-hour of solar power.
However, the Internet of Things may one day make this procedure much easier by allowing solar panels to send information about their output to the network automatically.
The world’s first peer-reviewed blockchain, Cardano, was designed by Ethereum co-founder Charles Hoskinson and evaluated by academics and scientists.
Digital contracts, DApps, and other applications can all be built on top of it. Cardano can process 1000 transactions per second, compared to Bitcoin’s 7 per second.
Cardano uses a ‘Proof of Stake’ consensus process where users in the currency pay tokens to join the network, making it more energy-efficient than Bitcoin.
According to Cardano’s founder, the cryptocurrency network utilizes under six-gigawatt hours (GWh) of electricity.
Some aspects of Cardano’s design are comparable to those of Ethereum but without the bloat. This allows Cardano to grow without sacrificing speed or efficiency, allowing the coin to meet rising demand.
Nano is a free, quick, and energy-efficient alternative to Bitcoin and other cryptocurrencies.
After being around since the end of 2015, its carbon footprint is still relatively minimal.
Scalability and minimal weight are further advantages because it does not use mining.
To save energy, Nano employs a technique known as block lattices.
As long as a Proof of Work technique is used, it’s possible to construct a personal account chain unique to a particular network member’s account.
Account-holders on the Nano platform vote on their preferred representative, who then works to safely confirm blocks of transactions.
Asynchronous account updates are possible on the Nano platform, rather than requiring the complete linear blockchain, as is the case with Bitcoin and other cryptocurrencies.
On the other hand, Nano uses only the sender and receiver account-chains and can process up to 125 transactions per second, eliminating competition and delays.
Using IOTA’s fast probability consensus and only relying on Proof of Work in part, the overall energy consumption of the network has been kept to a minimum.
A Ph.D. student by the name of Amir Abbaszadeh Sori provides the most accurate data on IOTA’s energy use.
When Abbaszadeh Sori computed the average energy consumption per transaction for IOTA, he found that each transaction used 0.11 Watt-hours.
Even compared to more developed financial networks like Visa and Mastercard, this is a meager percentage.
The energy consumption of IOTA, like many other cryptocurrencies, is far more than that of Bitcoin.
Atomic Transactions, which will be the norm for IOTA with the new improvements, might lower transaction size from 1.7kb to less than 100 bytes, reducing energy consumption.
Another fascinating cryptocurrency is Chia, which can be mined via the Amazon Web Services cloud computing platform.
Setting up this farm is more straightforward than mining for other currencies, which might take days or even weeks to set up this farm.
The Chia Network uses the available storage space on the user’s machine to run the decentralized network.
The Chia Network relies on proof-of-space-time instead of proof-of-work.
XCH, Chia’s token, may be earned by storing a given amount of data for a specific period.
When XCH was launched in 2017, it was a response to the high energy consumption associated with mining cryptocurrency.
No expensive equipment or vast amounts of power were required for the design of Chia farming, making it accessible to everyone.
Downloading the network’s blockchain transaction platform, Mainnet, is available on the Chia network’s website.
It is possible to allocate a section of your hard drive to the network after installing the software, and this will operate smoothly while your computer is running without dramatically impacting your machine’s speed or consuming vastly more energy.
Although cryptocurrencies rely on the consumption of energy to generate their value, there are environmentally friendly cryptocurrencies.
These eco-friendly crypto choices have a low carbon footprint and may even be beneficial to the environment.
By identifying the most energy-efficient digital currency, you’ll be better able to make ecologically conscious financial decisions.
Investors may reap the rewards of bitcoin trading while also protecting the environment if they research and look into their choices.
This strategy can lead to a more sustainable future for the entire planet.