There has been a lot of chatter in recent years about the rise in cryptocurrency prices, the decentralized nature of the economic landscape, and how crypto technology is affecting central banks and exchanges.
However, it has become increasingly important to consider the environmental impact of cryptocurrencies as global energy consumption rises and countries seek innovative solutions to the growing energy dilemma.
The Toll of Crypto Mining on Some of the most Popular Coins
Cryptocurrency mining is vital to the value-adding process of these revolutionary digital coins since it allows users to add to the blockchain and obtain cryptocurrency tokens.
Cryptocurrency mining is a time- and energy-intensive activity, necessitating high amounts of carbon dioxide emissions for some of the most well-known coins.
Bitcoin, still the most popular cryptocurrency, has the highest CO2 emissions per transaction scaled measurement at 1,060.5 lbs.
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At 93.84 pounds, Ethereum is the closest competitor, followed closely by Bitcoin Cash (28.4355 pounds), LTC (27.383 pounds), and Cardano (13.1 496 ounces).
Dogecoin, Ripple, and Stellar are also all quite polluting per transaction. When comparing the CO2 emissions of each of these coins over the course of a year, this number becomes even more worrisome.
More than 600 million trees had to be cut down in 2020 alone to produce the 59.9 million tons of CO2 produced by Bitcoin. Litecoin created 257.3 tons of CO2 and required 1.3 million trees, while Ethereum produced 16.6 millions of tons of CO2 and required slightly over 84 million trees by 2020.
In light of these troubling figures, prominent Bitcoin supporter Elon Musk has announced that Tesla will no longer accept Bitcoin as a form of payment for his environmentally conscious electric vehicles, signalling how Bitcoin’s liberating financial construct is largely undermined by its environmental impact.
Luckily, however, there is hope – altcoins have appeared on the market which harness sustainable technology and create a pathway to a greener future for crypto.
Currencies Signalling a Greener Crypto Future
Stellar is the most environmentally friendly option for greener-focused investors, consuming only 0.00003kWh per transaction, followed by:
- IoTa, which consumes only 0.00011kWh
- Nano, which consumes 0.000112kWh
- Ripple, which consumes 0.0079kWh
- And finally Chia, which consumes 0.023 kWh per transaction, which is the least environmentally friendly option.
The improved emission efficiency of these coins is largely owing to their sustainable technological solutions, such as Nano’s block-lattice technology, which is significantly more energy efficient than blockchain; and Chia’s validation form, which results in a significantly less energy intensive mining requirement (as opposed to Bitcoin).
The Meaning of Cryptocurrency in a Green Future
Some cryptocurrencies, such as Ethereum, are already taking steps to lower their carbon footprint, as signalled by the crypto giant’s switch from PoS to PoW for transaction validations in the Ethereum network.
As such, this technological improvement coupled with the diversification of greener crypto alternatives means that it is still possible for investors and cryptocurrency aficionados to grow their portfolios with energy-efficient cryptocurrencies says Louis Schoeman from Forexbrokers.ke
IoTa’s value has remained relatively consistent, but low-carbon coins are expected to acquire market share in an increasingly carbon-conscious society, which will create long-term value for investors.