3 Environmentally Conscious Cryptocurrencies You Need to Know
The rise of cryptocurrency has been well-documented. The digital currency became part of the cultural zeitgeist with the introduction of Bitcoin in 2009 and—combined with blockchain technology—has transformed into a multi-purpose currency with the potential to transform the economy and society as a whole.
Despite its benefits, critics of cryptocurrency are concerned with the amount of energy required to mine coins, or digital tokens. More than 2,264 kilowatt-hours (kWh) of electricity (enough to boil 1,500 kettles) is required to power one Bitcoin transaction. Moreover, Bitcoin production alone generates roughly 22 million metric tonnes of CO2 emissions per year.
The crypto industry will need to enact widespread changes to the way in which it mines coins and processes transactions to alleviate these environmental concerns. Some developers are already making strides in that regard.
Chia
Cryptocurrencies that require substantial energy input for mining coins typically employ a proof-of-work approach that relies on computer processors. Chia, however, utilizes a proof-of-space approach that depends on hard drives to "farm" its digital tokens. Each transaction on the Chia blockchain consumes only 0.023 kWh and the crypto itself consumes 0.16 percent of the yearly energy consumption of Bitcoin.
Beyond being more Eco-friendly in its operational processes than traditional cryptocurrencies, Chia supports the Circular Drive Initiative, which strives to lower e-waste by promoting the reuse of storage hardware.
Cardano
Created by Charles Hoskinson in 2017, Cardano is among the most popular eco-friendly cryptocurrencies. It is approximately 1,290 times more energy efficient than Bitcoin and, like Chia, employs a PoS-powered blockchain. It is also associated with additional efforts to improve the environment.
The Cardano Foundation, which functions as custodian of the blockchain, formed a partnership with Veritree in 2021. As part of the agreement, the worldwide tree planting verification and land restoration company agreed to plant one tree for every Cardano token (ADA) it received from donors. It had already planted more than 165,000 trees as of September 2021.
Cardano Foundation CEO Frederik Gregaard believes blockchain, if utilized correctly, could actually promote environmental stewardship and drive efforts to achieve net-zero carbon emissions worldwide.
"Blockchain can enable carbon accounting and other sustainability programmes by allowing companies to collect and track reliable data," he told Capital.com.
BitGreen
A purpose-built blockchain built on top of the Polkadot Network, BitGreen was created to serve as an eco-friendly alternative to Bitcoin and is used to encourage individuals to exhibit positive environmental behavior. For instance, users can receive tokens for carpooling or drinking sustainable coffee. These tokens can then be used to purchase products from BitGreen's partners or traded on exchanges.