Are you climate-conscious or a crypto-supporter? With these green cryptocurrencies, you no longer have to choose between the two.
One of the main concerns that every single crypto publication highlights about popular cryptocurrencies, like Bitcoin and Ethereum, is that they adversely affect the environment. The proof of work (PoW) model of cryptocurrency mining followed by Bitcoin and Ethereum (till they finally switch to proof of stake, or PoS) consumes a lot of electricity. In fact, Bitcoin mining consumes more electricity than the entire country of Finland.
The PoW model not only consumes a lot of electricity but also requires so much computational power that devices used for mining quickly become obsolete, generating about 30.7 kilotons of electronic waste every year. Knowing all this, particularly when we are all growing acutely aware of the impact of climate change, makes it hard to see cryptocurrency in a positive light. But just because the biggest cryptocurrencies are bad for the planet does not mean all cryptos have to follow the same pattern. Here is a list of five cryptocurrencies with their prices as of June 10, 2022 that are helping the crypto ecosystem forge a sustainable future.
Trading at US$0.626, Cardano is the sixth largest cryptocurrency in terms of market capitalization. Cardano uses a PoS model, and people need to buy ADA tokens and become a member of the network to be capable of verifying transactions. Moreover, within the PoS system, the larger the number of tokens a person stakes, the higher are their chances of becoming a validator (someone who verifies transactions). This acts as a barrier to entry and helps cut down the network’s energy consumption. Cardano consumes 0.5479 kW of energy per hour per transaction and can process 1,000 transactions per second (TPS).
Trading at US$40.50, Solana is the ninth largest cryptocurrency by market cap in the world. Solana uses a combination of PoS and proof of history (PoH). Instead of having miners or validators talk to one another to verify when a transaction occurred as in the PoW model, each validator on Solana maintains their own clock (allowing time stamps to be built into the blockchain). This creates a verifiable record of when an event took place and reduces unnecessary delays caused by waiting for confirmation from other validators across the network. Each transaction on Solana consumes 0.00051 kWh, which is less than the amount of energy consumed by two Google searches. Solana has a transaction speed of 50,000 TPS.
Currently trading at US$1.16, Nano is a cryptocurrency that doesn’t rely on crypto mining and instead uses “blockchain lattice” technology that creates blockchains for every user on the network. Transactions on Nano are confirmed using Open Representative Voting (ORV) where representatives (people voted in by users of the network) act as validators. Users can conduct peer-to-peer transactions on their own blockchains instead of using Nano’s central blockchain. This reduces the time taken in each transaction and also reduces the amount of energy consumed. Nano’s self-reported energy consumption is as low as 0.111Wh per transaction, and the token also has no transaction costs.
Trading at US$2.24, Tezos is another PoS blockchain. Tezos has an on-chain governance mechanism that allows the network to make improvements without a hard fork (a radical change that affects the status of transactions previously conducted on the blockchain). Tezos came into the limelight after gaming company Ubisoft decided to launch its playable non-fungible tokens (NFTs) on the Tezos blockchain. The network’s annual energy consumption is estimated to be at 0.001 TWh, with its carbon footprint being the same as that of 17 people. Tezos also boasts a transaction speed of 40 TPS.
Currently trading at US$0.1401, Stellar is a cryptocurrency resulting from a fork in the Ripple (XRP) blockchain. Unlike PoW and PoS, Stellar relies on a group of trusted nodes to authenticate transactions. The Stellar network allows people to trade fiat currencies, and it can be used to send remittances across borders. It is free to use for both individuals and institutions. It is both time and energy-efficient, as it can perform 1000-1500 TPS and consumes 0.00022 kWh per transaction.
While there remains a lot to be done to combat climate change, these cryptocurrencies are a positive sign not only for the future growth of cryptocurrency but also for the environment. Moreover, crypto developers and investors have decisively taken a pro-environment stance, with organizations, like the Crypto Climate Accord, trying to have all blockchains powered by sustainable sources of energy by 2025 and achieve net-zero emissions from crypto-related electricity consumption by 2030. Developing new consensus mechanisms as well as a shift to sustainable energy sources will also be beneficial in the large-scale adoption of blockchain.
- Why Is Bitcoin Mining So Energy Intensive?
- The Proof Systems of Cryptos
- 5 Blockchains with the Fastest Transaction Speeds in 2022
- Can NFTs Be Used to Combat Climate Change?
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