The rise of green cryptocurrencies drives a shift towards more sustainable and energy-efficient blockchain technologies. Some cryptocurrencies like Bitcoin have a significant carbon footprint with an annualized energy consumption. The main reason for this carbon footprint lies in blockchain technology which requires vast computational power. The amount of power and energy consumed in the proof-of-work is a significant drawback. It can have a negative impact on the environment. To overcome this problem green cryptocurrencies are leading the charge towards a more sustainable future. The push to move beyond Bitcoin has coincided with creating more environmentally friendly crypto forms to eliminate the mining requirement.
Top 5 Green Cryptocurrencies
- Cardano (ADA)
Cardano was founded by Charles Hoskinson, one of the co-founders of Ethereum. Cardano is one of the biggest blockchains to successfully use a proof-of-stake consensus mechanism, which is less energy-intensive than the proof-of-work mechanism. It is designed to be a next-gen evolution of the Ethereum idea with a blockchain that’s a flexible, sustainable and scalable platform. Cardano’s goal is to be the most environmentally sustainable blockchain platform. It uses a unique proof-of-stake mechanism called Ouroboros. Cardano‘s native token is ADA.
- Nano (XNO)
Nano is a decentralized, sustainable, and secure platform that uses less energy than Bitcoin and many other cryptocurrencies. Nano was founded by Colin LeMahieu.XNO is the native currency of the platform.XNO makes it possible to empower individuals with an efficient and accessible digital currency that connects them to the global economy with minimal impact. Nano uses a variation of delegated proof-of-stake called Open Representative Voting.
- Chia (XCH)
Chia Network is a layer 1 blockchain that uses its own custom-designed programming language called Chialisp and a novel consensus mechanism called proof-of-space-and-time (PoST). The combination of these two allows the blockchain to use less energy without compromising network security. Bram Cohen, the founder of BitTorrent, established the Chia network. XCH is the native cryptocurrency of the platform.
- Stellar (XLM)
Stellar platform is designed to move financial resources swiftly and reliably at minimal cost. Platform native currency is XLM or Lumens. Stellar aims to unite the world’s financial infrastructure. Stellar platform is designed to help payments cross borders faster and cheaper. The Stellar payment protocol is based on distributed ledger technology, an open-source development community.XLM helps with cross-border transactions, overcoming the problems of high fees and slow procedures. Stellar offers access to financial systems and people can send money at low cost and promptly around the world.
- IOTA (MIOTA)
IOTA is a distributed ledger used on the Internet of Things(IoT) ecosystem to record and perform transactions between humans and machines. It uses a proprietary technology known as Tangle, a system of nodes that confirm transactions and ensure lower energy requirements. IOTA is designed to provide one solution that no other crypto does: efficient, secure, lightweight, no fees. Instead of relying on blockchain, IOTA uses a ‘cryptography-based’ method of verification called Directed Acyclic Graph (DAG) which does not require miners to validate the transactions.
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Crypto mining industry has serious environmental ramifications as a result of the energy-intensive process through which coins are created. The hardware used for mining consumes a vast amount of power which impacts the environment. Such things pushed toward a more sustainable and energy-efficient method i.e. proof-of-stake mechanism. By addressing concerns over the environmental impact of cryptocurrency mining, green cryptocurrencies are making a big charge towards a more sustainable future.
Frequently Asked Questions (FAQs)
Which Cryptocurrencies can be mined?
Most cryptocurrencies that use a proof-of-work mechanism can be mined. Examples are Bitcoin, Litecoin and many more.
Can there be any alternatives to crypto mining?
Proof-of-stake (PoS) and Proof-of-Authority (PoA) offer scalability, energy efficiency and reduced environmental impact.
How can we reduce the environmental impact of crypto?
Crypto mining has been proven highly energy intensive. A new method of validating called Proof-of-Stake (PoS) can reverse the negative environmental impact.
What are the drawbacks of Proof-of-Stake (PoS) mechanism?
The blockchain-powered PoS mechanism is vulnerable to security attacks. In PoS mechanism forks can be increased.
Are all cryptocurrencies bad for the environment?
Cryptocurrencies that use proof-of-work mechanisms harm the environment as they consume a large amount of power and energy. However, not all cryptocurrencies are created through proof-of-work they use a proof-of-stake mechanism.