Most of the discussions about cryptocurrencies point towards their exponential value appreciations or the revolutionary impact of cryptocurrencies on finance. However, a new theme has become a crucial part of discussions on cryptocurrencies, which revolves around their environmental impact. You must have come across articles citing the fact that Bitcoin and blockchain technology are not good for the environment. Therefore, the world needs the best green cryptocurrencies to tackle such accusations.
For starters, Bitcoin did not leave any room for arguments against the harmful impact of cryptocurrencies on the environment. It uses the energy-intensive Proof of Work consensus mechanism, which does not exactly spell good news for the environment. However, all blockchain networks and cryptocurrencies don’t deserve to be painted in a negative light due to the limitations of Bitcoin. Let us learn more about some of the popular green cryptocurrencies in 2024.
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Why Does the World Need Green Cryptocurrencies?
Cryptocurrencies work on blockchain networks, and traditional blockchains have been accused of consuming massive amounts of energy. For example, the Cambridge Bitcoin Electricity Consumption Index reports that Bitcoin mining requires more than 140 terawatt hours annually. It may look like a meagre number on paper. However, it exceeds the annual energy consumption of a country like Norway, thereby reflecting the urgency of the situation.
On the other hand, a continuously expanding eco-friendly cryptocurrency list might offer a silver lining for the cryptocurrency industry. There are many blockchain networks that have a steadfast commitment to ensure efficient use of energy. For example, Solana and Cardano consume considerably less energy than the conventional networks.
Environmentalists and crypto enthusiasts have been worried about the levels of computer processing power required for mining cryptocurrencies. The mining process generally requires high-end computers to verify transactions. On top of that, blockchain networks need massive amounts of electricity to power complex algorithms. At the same time, it is also important to consider the usage of non-renewable energy sources to provide electricity for blockchain networks. Therefore, it is important to look for green cryptocurrencies that can offer hope for sustainability.
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How Can Green Cryptocurrencies Make a Difference?
The concerns regarding negative impact of cryptocurrencies on the environment can deter the prospects for their adoption. The top green cryptocurrencies can solve this problem by focusing more on environmental sustainability. You might wonder about the secret ingredient that can transform cryptocurrencies from energy-consuming giants to energy-efficient tools.
Interestingly, you can find a major difference in the energy consumption of cryptocurrencies with a change in their consensus mechanism. Most of the descriptions of green cryptocurrencies point to the consensus method they use to verify and add transactions to the network.
The two most popular consensus mechanisms are Proof of Work and Proof of Stake, which offer better energy efficiency. As a matter of fact, Ethereum transitioned to the Proof of Stake consensus from Proof of Work with “The Merge.”
It helped reduce network energy consumption by almost 99.9%, and now, Ethereum consumes less energy in a year than PayPal. Your search for the most energy-efficient cryptocurrency would also guide you to the differences between Proof of Work and Proof of Stake consensus. Here is a brief breakdown of each consensus mechanism to help you understand the differences between them.
Proof of Work
Proof of Work requires thousands of crypto miners to work tirelessly to solve complex mathematical problems. Miners compete with each other to solve the problems first and add blocks to the blockchain to earn crypto rewards. Therefore, miners invest in high-end computational power to have a competitive edge over other miners. However, the advanced mining rigs lead to massive energy usage alongside a huge carbon footprint.
Proof of Stake
Proof of Stake consensus differs from Proof of Work as it reduces the need for computational power. It uses the concept of validators, selected on the basis of the number of coins they hold or they want to stake as collateral. Proof of Stake works more like a digital lottery and does not require high-end computing resources to validate transactions. As a result, it offers an effective solution for fuelling the green cryptocurrency revolution.
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Which Green Cryptocurrencies Should You Watch Out For in 2024?
Bitcoin is one of the focal elements of the cryptocurrency landscape, and its colossal energy consumption does not give a good impression of cryptocurrencies. On the other hand, the green cryptocurrencies list has been growing with new projects aiming to reduce their carbon footprint. Green cryptocurrencies not only use new consensus mechanisms to reduce their energy consumption but also include sustainability in their roadmap. Here are some of the most popular green cryptocurrencies that can make waves in the crypto industry in 2024.
Green Bitcoin
Green Bitcoin is also one of the best green cryptocurrencies that offer promising returns to investors. Validators can stake GBTC tokens on the smart contract and generate Annual Percentage Yields ranging up to 199%. Furthermore, users with a stake in the network can also participate in the Bitcoin price prediction game to earn rewards. Users can also receive a 15% bonus alongside their daily earnings for staking GBTC tokens for at least six months.
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Chia
The alternative consensus mechanism uses free space on the hard drives of network participants by terming them as plots. Each plot is 10GB in size, and they help in validation of new blocks on the network, albeit with lower energy consumption. The official website of Chia claims that it consumes almost 500 times less power than Bitcoin. Therefore, it might be one of the best green crypto projects with long-term prospects.
Solana
It serves as a chronological proof system that verifies the sequence of every transaction without the back-and-forth communication required in other blockchain networks. On top of it, Solana showcases a commitment to sustainability with carbon offset programs and partnerships with renewable energy providers. The energy consumption of Solana stands out as one of its most valuable highlights. Imagine sending money across borders while using electricity less than a simple Google search.
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Cardano
Another top name among popular green cryptocurrencies is Cardano. It is the most important addition to an eco-friendly cryptocurrency list due to its unique Ouroboros protocol. It is the first verifiable, secure, and peer-reviewed blockchain consensus based on Proof of Stake consensus. The Ouroboros protocol ensures lower energy consumption without requiring users to participate in a competitive mining race.
Most importantly, it achieves a drastic reduction in energy usage without compromising decentralization or security. As a matter of fact, analysts have pointed out that Cardano is 47000 times more energy efficient than the Bitcoin blockchain. Furthermore, the themes of environmental consciousness in its roadmap also establish Cardano’s prowess in fueling sustainability in cryptocurrencies.
Hedera Hashgraph
However, Hedera’s efforts to encourage sustainability in the crypto industry are not limited to its consensus mechanism. Hedera works in partnership with the Crypto Climate Accord to ensure that it becomes carbon-negative through carbon credit programs and carbon offsetting.
According to the University College of London Blockchain Centre, Hedera might be one of the most energy-efficient blockchain networks. On the contrary, it is significantly smaller in size and registers comparatively less smart contract activity than other green networks. Therefore, it might take some time to gain the top spot among popular green cryptocurrencies.
Algorand
The pure PoS model offers security and decentralization alongside the benefit of better energy efficiency. Just like many other green cryptocurrencies, Algorand actively advocates for initiatives that help it achieve its goal of becoming a green cryptocurrency. For example, it supports carbon offset programs and encourages collaborations that can support environmental conservation. In a way, Algorand has become one of the frontrunners in the race of green cryptocurrencies.
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Final Words
Green cryptocurrencies have the potential to transform the traditional perspectives on cryptocurrencies and blockchain technology. For a long time, cryptocurrencies have been perceived as major threats to the environment due to their energy-intensive consensus mechanisms. The best green cryptocurrencies can rebuild the trust of the world in cryptocurrencies and their commitment to sustainability.
Green cryptocurrencies make a difference with the help of improved consensus mechanisms alongside a commitment to environment-friendly initiatives. Investors with an inclination towards safety of the environment and concerns regarding carbon footprint of cryptocurrencies should look up to green cryptocurrencies as the best alternatives. Discover more green cryptocurrencies in the market and how they can change the face of the crypto industry now.
*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. 101 Blockchains shall not be responsible for any loss sustained by any person who relies on this article. Do your own research!
