Some of crypto’s most ardent critics often point back towards environmental impact. In 2021, Chinese government officials banned crypto-related activities, in part, due to purported excessive energy consumption.
Sweden has also cited concerns about the diversion of renewable power from eco-friendly endeavors as justification for the European Union to ban crypto mining.
In late January 2022, research revealed the energy needed to fuel a single Bitcoin transaction was at least (at the time) 2,246 Kilowatt hours. CoinDesk noted this figure was enough power to boil 1,500 kettles. While the debate about crypto and environmental impact rages on, a growing number of projects and investors have expressed interest in a more eco-friendly digital currency world.
An Industry-Wide Movement Towards a Solution
One example is the transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) systems with projects like Ethereum. Ethereum’s Carl Beekhuizen wrote on the Ethereum Foundation Blog in May 2021 how the eventual switch to PoS would slash energy usage by 99.95%.
Entities like the Crypto Climate Accord are also working hard to facilitate a greener crypto industry. The Accord’s staying on course towards a stated goal of having all blockchains powered by renewable energy on or before 2025.
But what coins are leading the way and making headlines for their environmentally conscious-focus?
Keep reading for a breakdown of coins that practice sustainability-related measures and minimize energy consummation, and environmental impact as best they can, even if trying to figure out what coins are ‘greener’ than others is not an exact science.
Established back in 2016/2017, POWR is an Ethereum token that is the basis of Powerledger, a software and tech company aiming towards promoting renewable energy through peer-to-peer energy trading, green energy tracking, and energy verification. For example, Powerledger works with the U.S. Midwest Renewable Energy Tracking System to help with the trading of REC’s (Renewable Energy Certificates) across North America.
Launched back in 2014 as a Ripple fork, Stellar is discussed as a PayPal alternative and a bridge between traditional finance and cryptocurrency. Ran by the Stellar Development Foundation, Stellar’s open-source authentication-based consensus protocol helps keep costs low and energy usage at a minimum as transactions are not cycling through the entire network. Stellar’s attracted rapt attention from companies like IBM and Deloitte. It was also one of the first cryptocurrencies to be deemed as Shariah compliant.
Focusing on secure value and data exchange, IOTA relies on the Tangle distributed ledger technology to facilitate transactions without fees. Each transaction carries through with just 0.000011 kWh of energy. The IOTA Whitepaper cites use cases in businesses, nonprofits and government/EU-funded organizations where the technology is used as a trust layer and underlying protocol to verify
data sources, documents, contracts, identities and official certificates.
Built by Ethereum co-founder Charles Hoskinson, Cardano’s reliance on a PoS mechanism helps dramatically mitigate energy consumption even though it’s similar in some ways to Ethereum. As the world’s first peer-reviewed blockchain, Cardano’s gained notoriety due to its versatility and fast transactions speeds. The Cardano Blockchain Insights released information earlier in 2022 claiming the coin was 47,200 times more energy-efficient than Bitcoin.
With a name that sounds energy-efficient, the project team focuses on promoting verifiably produced solar energy as the coin is spent and traded. According to Solarcoin, each megawatt hour from solar technology leads to the creation of 1 SolarCoin. Users are asked and encouraged to upload proof of energy generation. Developed in 2014, SolarCoin migrated to the Energy Web Foundation’s blockchain in Summer 2021.
Launched in 2020, the blockchain platform Avalanche focuses on low priced and fast transactions, along with environmental friendliness. The Avalanche ecosystem allows for the deployment of customized blockchains that can handle nearly 4,500 transactions per second. Relying on a PoS system, Avalanche only uses 0.0005% of the Bitcoin blockchain’s energy, according to a Crypto Carbon Ratings Institute report.
Sustainability within the crypto world continues to be a focus for teams and projects as sentiments within the industry trend towards smarter environmental measures. Even those not interested in PoS systems can rely on the Proof-of-Space consensus mechanism, where mining can be conducted on smaller hard disks instead of massive processors.
The cryptocurrencies in this list are projects who have made a name for themselves in the crypto space by themselves, but who come with the added nuance of environmental sustainability. The list of eco-friendly cryptos should only grow as innovation fosters more coins and tokens with a greener focus.