Top 5 Eco-Friendly Cryptocurrencies
Crypto, Knowledge

Top 5 Eco-Friendly Cryptocurrencies that You Must Know About

Have you heard of eco-friendly cryptocurrencies? These are environment-conscious projects in the field of the crypto market. They allow people to step into the crypto world without having to worry about their carbon footprint on the planet.

Crypto mining has been a rising concern for environmentalists. Studies show that the amount of energy that is consumed in the mining of a Bitcoin is equal to the power needed in some smaller countries. Not only that, the amount of electronic waste that the mining of a Bitcoin or any other cryptocurrencies counts thousands of tonnes. This is one of the most important reasons why some people feel repulsion against the concept of cryptocurrencies. 

In this article, we have explained eco-friendly cryptocurrencies, their importance, and the top 5 currencies that you should know about.

What are Eco-friendly Cryptocurrencies?

Eco-friendly cryptocurrencies are the cryptocurrencies that are mined by using renewable forms of energy rather than non-renewable sources of energy, that is, fossil fuels. Also, eco-friendly cryptocurrencies have very little impact on the environment. Currently, cryptocurrencies use the Proof of Work mechanism. In this, miners solve mathematical problems in order to guess a 64 digit hexadecimal number known as a hash. All the computers on the blockchain network race amongst themselves to be the first ones to guess the number. This increases the amount of energy consumption for the mining of cryptocurrencies.

On the other hand, eco-friendly cryptocurrencies use the Proof of Stake mechanism. In this mechanism, the group of miners advance a very small amount of cryptocurrencies. Further, they choose to verify the transactions. Since a single computer is working on a particular transaction, the risks of approving fraudulent transactions decreases. In addition to this, the energy consumption is highly optimized as each machine is now working to solve a different problem. 

Top 5 Eco-friendly Cryptocurrencies

Just because cryptocurrencies consume such a large amount of electricity doesn’t mean you should stay away from the crypto world. Here are five eco-friendly cryptocurrencies that you can invest in and be a part of the larger community. 

1. Eco-friendly Cryptocurrencies: Chia

The use of hard drives instead of processing computers is what makes Chia cryptocurrency, a green and eco-friendly cryptocurrency. This is called the Proof of Space protocol which aims to make Chia much less energy-intensive. The farming of Chia coins uses empty space on the hard drives of computers and laptops. All the user has to do is download the farming software on their computers and laptops with enough drive space. Once the download completes, the computers begin farming Chia coins on the empty plot (drive space) for you. Since farming can take place on simple home computers, it doesn’t require a high amount of energy and hence, becomes an eco-friendly cryptocurrency. 

2. SolarCoin

As the name suggests, SolarCoin is based on solar energy. The parent company of SolarCoin aims to expand the use of solar energy around the world. Therefore, it allows the creation of one SolarCoin whenever the solar arrays generate one megawatt of electricity. It is a method of rewarding people for installing solar arrays in their region and adopting more eco-friendly methods of energy production. 

3. Cardano

Cardano uses the Proof of Stake mechanism and it is called Ouroboros. In this system, the users have to purchase cryptocurrencies in order to be a part of the network. This helps in saving significant amounts of energy as only the users who already have tokens can join the network, instead of them racing to achieve that. The working system of Cardano is much more efficient than that of Bitcoin. In contrast to Bitcoin, where only up to seven transactions can be verified in a second, the limit of transactions is 1000 per second in the case of Cardano. 

Ouroboros, the governing protocol of Cardano, is the first peer-reviewed blockchain network. This means that the company can scale it to meet the global requirements of Cardano. Also, the requirements can easily be fulfilled without compromising the sustainability and eco-friendliness of the protocol. It is one of the greenest cryptocurrencies in the market and has been the fifth-largest currency in the past. 

4. NANO

NANO uses the Proof of Work protocol, the traditional mining protocol. However, it aims to reduce the waste generated by the mining of cryptocurrencies by employing an Open Representative Voting Protocol. This reduces energy consumption while simultaneously improving the efficiency of the transactions. The NANO-based transactions are instant and do not require any trading fees. 

5. IOTA

IOTA may not be as profitable as other altcoins in the crypto world because of stability reasons. But, it is still one of the top coins when we talk about sustainability. It runs on its own unique system known as Tangle. In this system, there is no need for miners. Instead of this, there is a small machine that executes the entire process. Since the machines are small, the energy consumption becomes automatically low. This currency runs on probabilistic consensus technology. This involves a Proof of Work statement and is the reason why IOTA is an eco-friendly cryptocurrency. The amount of energy consumption of IOTA is even less than the energy consumption that occurs in the case of traditional credit cards. 

6. Eco-friendly Cryptocurrencies: BitGreen (Bonus)

BitGreen is a sustainable alternative to Bitcoin. The parent company created this in an attempt to reduce the harmful effects in the form of high electronic waste and energy consumption of Bitcoin. It encourages people to adopt greener alternatives to the traditional forms of their daily products such as coffee. In addition to this, it rewards people for making sustainable choices like carpooling and volunteering for social causes. 

Conclusion

The concerns over the energy consumption of cryptocurrencies are increasing significantly. there are many new projects emerging in the ecosystem. Therefore, the investors must lookout for the new projects being developed. Also, while making choices around cryptocurrencies, it is very important to consider the negative impacts of the project against its utility of it. Many new companies are pairing up with the Crypto Climate Accord. It aims to completely eliminate the CO2 emissions from the energy consumption of cryptocurrencies by the year 2030. 

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