Cryptocurrency has received a lot of criticism for its large carbon footprint. Market biggest Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH) are the worst offenders, consuming as much energy as a medium-sized country.
However, not all cryptocurrencies consume a lot of energy. Although many digital currencies (particularly older ones) cause significant computing power, many greener alternatives exist. One reason is the transition from the original proof-of-work model to the more efficient proof-of-stake model for transaction validation.
If you want to invest in eco-friendly cryptocurrencies, some newer eco-friendly blockchain is now a must-have approach. They have integrated renewable energy into their operational model, combining it with alternative validation methods to create a token that consumes significantly less energy than its predecessors.
Few cryptocurrencies have made a more significant commitment to going green than Algorand (CRYPTO:ALGO). On Earth Day 2022, it blacked out nearly 20 Times Square billboards and announced that it is a carbon-negative blockchain.
This eco-friendly blockchain platform can run smart contracts, making it one of Ethereum’s many competitors. It already has a low carbon footprint because it validates transactions using the proof-of-stake model.
Algorand launched an intelligent contract to offset the carbon footprint of every transaction with no action on the user’s part to become carbon-negative. A portion of its network fees will also purchase carbon credits through ClimateTrade.
Solana (CRYPTO:SOL), a proof-of-stake blockchain with smart contract functionality, was one of the most successful cryptocurrency investments in 2021. It achieved carbon neutrality for the year and returns of over 11,000 percent.
Solana is well-known for its quickness and efficiency. It reportedly handles up to 65,000 transactions per second and routinely processes over 2,000. The average transaction cost is only $0.00025.
Solana employs a proof-of-stake model, as do many other environmentally friendly cryptocurrencies. It does, however, combine that with its innovation, known as a proof of history, which records the sequence of transactions and the time elapsed between them. The hybrid protocol aids Solana’s processing speed.
Cardano (CRYPTO:ADA) is one of the well-known examples of a “green cryptocurrency.” It was the largest proof-of-stake cryptocurrency by market cap for much of 2021.
Cardano aims to build a programmable ecosystem capable of solving real-world problems. One notable example is its collaboration with the Ethiopian government, which involves schools storing student records on the Cardano blockchain.
Cardano consumes roughly the same energy per year as 600 US homes and is highly scalable because of its proof-of-stake model. Even though the project has been running since 2015, smart contracts will not be available until September 2021, so the next big step will be to expand its ecosystem.
Ripple’s native eco-friendly blockchain, XRP (CRYPTO:XRP), is a global payment system and currency exchange.
Ripple’s goal is to make money transfers cheaper and faster worldwide. Its technology is most useful for cross-border payments, and it has formed alliances with hundreds of financial institutions.
The Ripple network confirms transactions using trusted validatory, and all of its XRP tokens have already been mined. As a result, it doesn’t have a large carbon footprint. Ripple has pledged to become carbon-neutral by 2030.
Nano (CRYPTO:XNO) aims to create a fee-free, long-term digital money system. Its entire ethos is to make using its system simple and affordable.
Unlike other eco-friendly blockchains, Nano does not keep a chain of transactions. Instead, Nano accounts form a lattice of connected blocks, with each user controlling their account. Each transaction requires so little energy that standard computers can power it. Nano’s compact, lightweight design makes it both fast and environmentally friendly.
On the market, there are thousands of eco-friendly blockchains. Almost any cryptocurrency that does not use the proof-of-work model will consume a small amount of energy.
Energy consumption is one factor to consider in cryptocurrency projects. It would help if you also thought of a project’s goals, what distinguishes it, the problems it seeks to solve, and the team behind it. And, because cryptocurrency is a notoriously volatile market, exercise caution when investing and be prepared for price fluctuations. If you need or want advice on blockchain development services, don’t hesitate to contact SmartOSC.
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