Greener crypto industry: a noticeable shift
25th Jan 2023 Investment
Most people have probably already heard how much power bitcoin mining requires. Over 2,264 kWh of electricity is required to run a single BTC transaction, which is equivalent to boiling 1,500 kettles. Although Bitcoin is not alone in having this problem - all coins using the PoW consensus technique have the same issue.
Creators of cryptocurrencies may soon be forced to answer the question, "Is it possible for crypto to become green?" as more and more people are looking to invest in businesses that show they are committed to progressive ESG (Environmental, Social, and Governance), principles. It’s particularly the case in regards to environmental concerns
Long term crypto sustainability
Blockchain and cryptocurrency enthusiasts and developers are working to ensure the long-term viability of the industry. Recently, the Crypto Climate Accord was announced – an industry-wide move to eliminate crypto’s legacy of climate pollution. A 32-page audit document has been created to tally the ecological consequences of cryptocurrencies, and they are working toward a goal to have all blockchains powered by clean energy by 2025.
The Bitcoin Mining Council recently produced a report claiming that its users are using a 67% renewable energy mix when mining. Still much work to be done, but big steps in the right direction.
The long-term viability and ecological footprint of a cryptocurrency are affected by a number of factors. While this is a common argument, it is not as simple as determining which cryptocurrency consumes the most energy.
Which digital currencies have the lowest impact on the planet?
Tokens for certain newer digital currencies use far less power than their predecessors because they mix renewable energy with alternative validation processes.
Cardano
Cardano was created by one of Ethereum's original developers, and it's a Proof-of-Stake (PoS) cryptocurrency based on a blockchain that has been subjected to peer review.
With this design, Cardano can increase its capacity to keep up with rising demand without significantly increasing its energy consumption. There are authentic trading bits like quantum AI which allow safer transactions of these sustainable coins.
Stellar
Stellar's lumen (XLM) coin is used to settle transactions over the Stellar blockchain. Using a network of trustworthy nodes to verify transactions, its consensus process is far quicker than proof-of-work or proof-of-stake.
The Stellar network facilitates cross-border monetary transactions (including remittance payments) between users without the need for intermediaries or the imposition of prohibitive fees.
Nano
As of 2015, Nano was another low-power cryptocurrency. Rather than relying on mining, the Nano network generates user blockchains through the use of "blockchain lattice" technology.
Open Representative Voting (ORV) is used to confirm transactions by having representatives elected by network users serve as validators.
As a result, users can conduct peer-to-peer transactions using their own blockchains rather than the network's central blockchain, saving both time and resources.
Hedera Hashgraph
Hedera Hashgraph is a currency that can process transactions at a rate comparable to that of major payment providers like Visa while using a fraction of the energy required by Bitcoin.
Hedera claims it can handle up to 100,000 operations per second on its network since its transactions are done in parallel rather than sequentially, making it far faster than older cryptocurrencies like Bitcoin.
The developers of Hedera are now also utilising the platform's network to create sustainable projects like the Power Transition efficiency tracking programme.
BitGreen
BitGreen is a cryptocurrency that prioritises environmental sustainability by offering incentives for actions like sharing transportation, biking, and buying green goods.
Online stores that accept BitGreen allow customers to make purchases using cryptocurrency. Additionally, BitGreen is exchange-traded and operates on a PoS network.
In addition, there is a digital payment app where people may buy and sell coins, as well as earn coins for taking part in green activities. The cryptocurrency BitGreen is a major competitor of Bitcoin.
BitGreen has the potential for sustained viability and profitable growth, while not yet attaining the very same level of fame as its rival.
The silver lining
To reduce their impact on the environment, investors might select cryptocurrency assets that use less energy. And it seems like every day, a new form of digital currency is being developed and released, so there is plenty of choice.
Investors can take action to safeguard the environment and reap the monetary advantages of bitcoin trading so long as they do their homework and consider all alternatives.
The adoption of blockchain and cryptocurrency networks would have less of an impact on the environment if advances were made in consensus protocol and renewable energy sources were prioritised.
Despite the ongoing issue of e-waste from previous generations of mining operations, the desire for bigger and larger mining rigs would be reduced if non-PoW cryptocurrencies were to gain widespread use.
