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Cryptocurrency is shifting towards the mainstream, as increasing numbers of people are compelled to invest in an economic future managed by blockchain. Carbon usage has been a hot topic for cryptocurrencies since the start of 2021. Research shows that Bitcoin’s energy consumption is directly linked to its usage; as the value of Bitcoin increases, so does its carbon footprint.
Leading cryptocurrency exchange comparison site Cryptowisser recently published a first-of-its-kind article, compiling a list of all major coins to show their crypto carbon footprint . After reading the list, we felt inspired to explore some of the most carbon-efficient coins in 2022. Understanding Crypto Energy Consumption
Bitcoin is often used as the industry example, but it certainly doesn’t represent the wider cryptocurrency market, as the vast majority of coins are built on Proof-of-Stake (PoS) protocols, opposed to Bitcoin’s Proof-of-Work (PoW). While a lot of attention is directed towards PoW protocols as being the main issue for crypto’s carbon footprint, in reality, it’s down to the lack of clean energy being used globally.
Cryptocurrency alone cannot solve the planet’s energy crisis. Having said that, since cryptocurrency’s carbon emissions were brought to public attention, there has been a reaction from the community, investing and developing projects that look to mitigate blockchain’s carbon footprint.
Seen as the digital silver of the crypto market, Ethereum has spent years assuring the community that it’s going green. But, according to the latest crypto carbon footprint reports, it’s still not much better than Bitcoin. The long-standing plan to replace Ethereum’s PoW model with a PoS mechanism has been the slow and steady development of Ethereum 2.0. The project started in December 2020 and is said to be finally fully launched during the second quarter of 2022.
Cards on the table, it’s difficult to claim that one particular coin is being ‘greener’ than others. The sheer number of transactions taking place for Ether and Bitcoin blockchains, means they use up considerably more than smaller coins. Though, if you scaled these smaller coins up, they may be as bad, if not worse than Bitcoin. Given that, let’s take a look at which cryptocurrencies are in with a shout of being more sustainable than Bitcoin. In no particular order, let’s take a look at three. Algorand (ALGO)
Algorand is a proof-of-stake blockchain that functions by supporting smart contracts. A scalable network that gives holders of ALGO a proportional influence on the network. Released towards the end of 2019, ALGO is a relatively new coin on the block but certainly holds weight in the industry, sitting among the top 25 coins by market capitalisation. Algorand offers quick transactions and a pure PoS protocol, meaning the network is accessible and reliable, using far less energy than major currencies like Ethereum and Bitcoin. Avalanche (AVAX)
Another smart contract blockchain using a PoS algorithm, the Avalanche network is restricted to 720 million AVAX coins. It was developed to allow private or public blockchains to be deployed on top of it, computing some 4,500 transactions a second at a lower cost than other PoS networks like Ethereum. Avalanche’s compatibility with Ethereum’s programming language (Solidity) is partly what attributes to the reason it regularly moves in and out of the top 10 coins, offering developers building DeFi projects, games, and NFTs a platform to work. Hedera Hashgraph (HBAR)
The third coin we’ll discuss has supreme processing power, with the ability to process 100,000 transactions per second. HBAR is a PoS token and has a current supply of around 8 billion, with a fixed supply of 50 billion HBARs. A DeFi network that is used for in-app payments, micropayments, transaction fees, and network protection. Hedera is touted as more of a graph than a block ‘chain.’ To simplify any long-winded explanation, it means that the speed of transaction verifications increases the more that take place on the network, offering unrivalled scalability. Key takeaways
The cryptocurrency industry has been scrutinized for its high energy usage, but the energy issue it faces is the same one we all face. The fact our main source of energy is still fossil fuels, like oil and gas, is the principal problem. We’ve seen many new networks built on PoS protocols, which has no doubt made a significant difference, but crypto alone cannot produce green energy.
It’s clear that PoS is the preferred protocol for building energy-efficient blockchain networks. On balance, most of the carbon-negative networks we see in the Cryptowisser list […]
source Cryptocurrency and Sustainability: Most Carbon-efficient Coins in 2022?
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