Bitcoin’s environmental impact is causing considerable interest in recent months, and some investors want to move towards greener alternatives with the most sustainable cryptocurrencies. Several Blockchain projects have created new cryptocurrencies that are more sustainable than Bitcoin. There are over 10,000 cryptocurrencies since the introduction of Bitcoin whereby some projects have closed down while others are still in operation.
The Blockchain network has advanced from gaming platforms to include health, energy, and data storage sectors. In the past two years, some of the more popular cryptocurrencies have been Ethereum, Litecoin, Bitcoin Cash, EOS, and Cardano. The following is a list of the most sustainable cryptocurrencies for 2022.
- EcoWatt: Redefining Crypto Mining With Green Energy
- Energy consumption of XRP makes it more sustainable than BTC
What are eco-friendly cryptocurrencies?
Unlike bitcoin and other cryptocurrency currencies, eco-friendly cryptocurrencies do not have environmental credentials. Bitcoin mining can boil enough electricity for every cup of tea consumed over the next 30 years.
Eco-friendly cryptocurrencies use a variety of mechanisms to be more environmentally friendly, including proof of stake and other energy-efficient algorithms. Bitcoin, on the other hand, uses a “proof of work” system that rewards miners for verifying transactions and adds new blocks to the blockchain. This is known as the “mining process,” which is how new bitcoins are added to circulation.
15 most sustainable cryptocurrencies pros and cons
If you’re interested in investing in digital currency but want to do so in the most eco-conscious way possible, take a look at cryptocurrencies that are forging the path to sustainability. Let us look at some of the most sustainable digital currencies.
1. Cardano (ADA)
Cardano, established by one of Ethereum’s co-founders Charles Hoskinson, calls itself a next-generation blockchain. It is the first ever blockchain platform to use a multi-layer architecture. The coin associated with Cardano (ADA) is currently the 8th biggest cryptocurrency in terms of market capitalization.
Moreover, Cardano has joined Net Zero Asset Managers Initiative and its proof-of-stake algorithm doesn’t require mining which makes it more environmentally friendly too since there isn’t an increase in energy consumption when scaling either.
2. Ripple (XRP)
Ripple is a San Francisco-based start-up that aims to provide banking services around the world by providing banks and financial institutions with an “alternative currency” called XRP.
According to Ripple, it is “an open-source, permissionless, decentralized blockchain technology that can settle transactions in three to five seconds.” The native cryptocurrency is XRP, and all of the coins have already been mined. According to its website, Ripple plans to be carbon net-zero by 2030.
3. Holo (HOT)
Holo intends to create its users their own blockchains. Each “agent” or “host” is both a storage location and a blockchain, and it rewards holo tokens in return. Holo is gaining traction fast, especially because the network has the ability to empower anyone with a browser and an interest in cryptocurrency.
Hedera is a cryptocurrency that runs on a Proof-of-stake consensus mechanism, with an energy consumption of almost 0.001kWh and that’s why we have ranked it #4 on our list.
In theory, it may compete with major payment processors like Visa in terms of transactions per second while using considerably less energy than bitcoin. Instead of processing everything one after the other, transactions are processed simultaneously, making Hedera faster than previous cryptocurrencies like bitcoin.
The creators of Hedera are utilizing their network to build sustainability projects such as their Power Transition energy tracking software.
It’s a highly scalable digital energy platform that allows customers and businesses to manage their energy consumption at the scale of microgrids all the way up to national grids.
It may help in lowering costs and accelerating the move to a zero-carbon economy by allowing players in networks of any size to communicate more effectively, resulting in improved energy efficiency.
Devvio is a blockchain solutions company that operates on a platform called DevvX. The company recently completed a study that found that its platform consumes 3.5 billion times less energy per transaction than Bitcoin, and 347 million times less than Ethereum.
According to a statement released by the company, Devvio can be used for environmental, social, and governance initiatives, non-fungible tokens, identity management, supply chain tracking, and payments processing – claiming that it can handle up to eight million transactions per second.
6. Chia (XCH)
Chia, which was created by Bram Cohen of BitTorrent, can be mined on the Amazon Web Services cloud computing platform. It puts a user’s desktop to use by offering downloadable software that allows users to earn Chia tokens by running the decentralized platform on their hard drives.
While perhaps not as environmentally friendly as other cryptocurrencies on this list, Chia’s hard drive-based “farming” process is far less energy-intensive than the mining process employed by proof-of-work blockchains.
7. Tron (TRX)
TRONIX is the native cryptocurrency of the Singapore-based Tron blockchain, which aims to decentralize the web. It has one significant advantage over the other networks: in 2018, it purchased BitTorrent for $140 million, giving it 100 million active daily users on which to test scalability, according to Inc.Tronix The TRON currency, Tronix, is pre-mined and can be traded on Binance and other exchanges, with big plans afoot for TRON’s future, including using it to create decentralized gaming platforms.
8. IOTA (MIOTA)
IOTA doesn’t rely on a blockchain. Instead, this crypto uses a cryptography-based method of verification called Directed Acyclic Graph (DAG). DAG allows real-time transaction verification with very little energy consumption.
9. MetaHash (MHC)
This decentralized, open-source cryptocurrency runs on Blockchain 4.0 and claims a validation rate of fewer than three seconds per transaction. In its 2021 results report, MetaHash said it plans to implement smart tokens and bridges in a larger release of tools.
Nano is a relatively new low-energy crypto that doesn’t use mining, instead utilizing “blockchain lattice” technology to generate user blockchains for everyone on the Nano network, so that each user can control their own account.
Transactions are verified by Open Representative Voting (ORV), with members of the network serving as validators. Users can transact peer-to-peer using their own blockchains, which saves time and energy consumption because they don’t have to use the main network blockchain.
Algorand is propped up by a proof-of-stake consensus mechanism, which gives it transaction speeds that are much faster than most of its competitors. Additionally, Algorand has low fees and is accessible to everyone. Most of Algorand’s value comes from the fact that it can execute smart contracts – making it one of Ethereum’s primary rivals.
Algorand does not use mining, and the network is aiming to be a pioneer in blockchain sustainability by generating a carbon-negative network. In April 2021, they announced that their network is now entirely carbon-neutral.
It was designed to be energy efficient from the beginning and has agreed to offset any emissions gaps in order to decrease its environmental effect even more.
12 . Solarcoin
Solar technology is a global and independent sustainable cryptocurrency designed to promote the creation of solar energy by rewarding generators with solar coins. Generators can claim one coin for every megawatt hour created by solar technology.
This eco-friendly crypto was launched as a green alternative to bitcoin. Like Solarcoin, it seeks to encourage positive environmental behavior by rewarding users for actions including drinking sustainable coffee, car-pooling, and volunteering. It can be traded on exchanges or spent with Bitgreen’s partners.
14 Signum (SIGNA)
Signum calls itself the first fully sustainable blockchain. It’s similar to Chia in that transactions are verified using network users’ hardrive space in this case, via a proof of commitment algorithm — with no mining required. The decentralized governance-based network can be used for everyday applications such as token creation, smart contracts, and messaging.The community of such a currency is dedicated to organizing various eco-initiatives.
15 Stellar Lumens (XLM)
Stellar Lumens is the cryptocurrency of Stellar, an open-sourced blockchain system that offers an open-source payment alternative. Stellar excels at efficient cross-currency transactions, which matters more as cryptocurrency trading becomes more common.Stellar Stellar is overseen by Stellar Development Foundation and the network was released in 2014.
How we compiled this list
We aren’t sure whether any currency has greener characteristics than others. The problem is that there are a lot of variables to consider. Often much smaller cryptocurrencies are therefore naturally less environmentally damaging and they involve much fewer transaction costs than Bitcoin. Those advantages become comparative.
What we do know is that the smaller, more sustainable cryptocurrencies are mostly niche players with very active and supportive communities. Their primary purpose is not to make money for early investors but to support an activity or cause that they believe in. That’s not to say you can’t make money from investing in them. Just that it is less likely to be the motivation for their creators.
So our list is designed to reflect that principle. It is a list of 15 small, sustainable, and focused cryptocurrencies that look set to have an impact beyond their own community. And which might make you some money into the bargain.
They could actually be worse than the cryptos we like. Some cryptocurrencies have energy-efficient characteristics compared to Bitcoin. This is mostly due to their size. Their smaller communities use less energy than Bitcoin’s vast network. Also, many of the “green” cryptos we like use different verification methods than Bitcoin. They don’t use energy-intensive mining rigs. These characteristics make them more environmentally friendly than Bitcoin.
The best sustainable cryptocurrencies
The most sustainable cryptocurrencies are the ones that have the least environmental impact. However, it is important to consider other factors as well, such as scalability, security, and decentralization. Some of the most promising eco-friendly cryptocurrencies include Cardano (ADA), EOS, and TRON (TRX).
Cardano is a blockchain platform that uses a proof-of-stake consensus mechanism. This means that instead of miners, the network is secured by those who stake their ADA tokens. This makes it more energy-efficient than proof-of-work cryptocurrencies like Bitcoin.
The Cost of Mining Coins and Tracking Transactions
Estimating the energy consumption involved with cryptocurrency mining is a complex task, but it’s generally understood as the energy used to digitally mine crypto coins and process trading transactions plus the power usage of the hardware devices used to support these efforts. Estimates vary, but some analysts place the annual energy consumption tied to crypto as being on par with a small country.
One way to get a handle on energy use is by looking at individual countries. For example, Digiconomist’s Bitcoin Energy Consumption Index estimates that the annual electricity consumption for just one bitcoin transaction (enough to buy two Big Macs) could power 3.67 U.S. households for a day.
The site also estimates that, if bitcoin were a country, it would currently rank 67th in the world in terms of energy consumption—ahead of countries like Hungary, Oman, and Qatar.
Features of environmentally sustainable cryptocurrencies
Bitcoin is most commonly associated with potential economic and security risks but is increasingly facing the pressure of a less desirable issue in cryptocurrency. Several environmental issues are circulating around cryptocurrency. As cryptocurrency trades become increasingly popular, energy usage increases too.
Some crypto-assets like bitcoin have a significant carbon footprint, with an annualized energy consumption estimated to be similar to that of some mid-sized countries. The main reason for this outsized carbon footprint lies in their underlying blockchain technology, which requires vast amounts of computational power. This is typically derived from electricity, with a large proportion coming from coal-fired power plants in China.
The growing awareness of the environmental impact of cryptocurrencies has led to the development of eco-friendly alternatives that use less energy. These “green” cryptocurrencies often utilize proof-of-stake consensus mechanisms instead of proof-of-work.
What is the difference between Proof-of-Work and Proof-of-Stake?
Proof-of-work (PoW) is a consensus mechanism that allows a network to come to an agreement on the state of the blockchain. This is done by having miners compete to solve complex mathematical problems. The first miner to solve the problem gets to add the next block to the blockchain and receives a reward for their efforts.
Proof-of-stake (PoS) is an alternative consensus mechanism that does not require mining. Instead, those who hold tokens can stake them to validate transactions and add new blocks to the blockchain.
The size of the stake determines how often a user can validate transactions and add new blocks. This makes it more energy-efficient than PoW because there is no need for miners to use computational power to solve complex mathematical problems.
What are the benefits of environmentally sustainable cryptocurrencies?
There are several benefits of eco-friendly cryptocurrencies. First, they have a smaller carbon footprint than traditional proof-of-work cryptocurrencies. Second, they are more energy-efficient.
Third, they often use proof-of-stake consensus mechanisms, which are more secure than proof-of-work. Finally, eco-friendly cryptocurrencies are often more decentralized than traditional cryptocurrencies.
What are the risks of environmentally sustainable cryptocurrencies?
The main risk of eco-friendly cryptocurrencies is that they are not as well known or trusted as traditional cryptocurrencies. This means that they may not be accepted by all exchanges and wallets.
They may also not be supported by all governments. Another risk is that eco-friendly cryptocurrencies may be more vulnerable to 51% attacks. This is because they often have smaller networks than traditional cryptocurrencies.
How can I buy eco-friendly cryptocurrencies?
You can buy eco-friendly cryptocurrencies on cryptocurrency exchanges. Some popular exchanges that support eco-friendly cryptocurrencies include Binance, KuCoin, and OKEx.
You can also buy them from online wallets like Atomic Wallet and Trust Wallet. Finally, you can purchase eco-friendly cryptocurrencies from some traditional exchanges like Coinbase and Gemini.
What is the future of environmentally sustainable cryptocurrencies
The future of eco-friendly cryptocurrencies is uncertain. They have not been around for very long and their popularity is still growing. It is possible that they will become more popular as awareness of their environmental benefits increases.
However, it is also possible that traditional proof-of-work cryptocurrencies will continue to dominate the market. Only time will tell.
An Industry Moving Rapidly Toward Sustainable Crypto
Although much remains to be done to reduce the environmental impact of trading cryptocurrency, eco-minded investors can feel good about the fact that there’s a notable and ongoing movement in that direction. While the Crypto Climate Accord continues its work and the environmental impact of cryptocurrency trading remains under scrutiny, concerned traders have many ways to vote with their coins.
Eco-friendly investors can also take heart in the fact that some of the world’s largest companies are now turning their attention to the development of sustainable digital assets. IBM, for one, has been a driving force behind the launch of multiple eco-friendly digital tokens, including Verde and Carbon Credits. These are just two examples of the many firms that are heeding the call for sustainability in the cryptocurrency industry.
As more investors demand eco-friendly options, it’s likely that we’ll see even more innovation in this area in the years to come. So, although there’s still a long way to go, it’s clear that the cryptocurrency industry is moving rapidly in a greener direction.
Can cryptocurrency become more environmentally friendly?
Jess Summerhill is confident that his invention can help to reduce the harmful environmental consequences of cryptocurrency production. He is currently working for Dnar, a company that makes it easier for West Africans to use cryptocurrency. Recently, he came up with a new method of mining cryptocurrency that he believes will result in a cleaner industry overall.
With over a decade of experience in the tech industry and as a keen science fiction fan, Summerhill was intrigued by the intangible and mysterious concept of cryptocurrency.
He first encountered the world of digital currency in 2016, when a close friend sat him down to watch The Rise and Rise of Bitcoin, a documentary exploring the “social and political impacts of the world’s first global and open-source digital currency.”
How To Know Which Crypto is Eco Friendly
There are many ways to ascertain which cryptocurrencies are ecologically friendly from a technical standpoint, including:
- The electricity consumption of each blockchain node per year – on which Cardano performs well.
- The total annual electricity usage across all nodes.
- A Watt-hour per transaction calculation – of which Hedera Hashgraph and Solana have the lowest.
- Whether the crypto token runs on a PoS blockchain – such as IBAT, TAMA, and XTZ.
- Their partnerships in the industry – such as Algorand’s work with ClimateTrade.
Alongside those more academic points, many crypto projects and their foundations have been involved in fighting climate change and deforestation including Cardano and Near Protocol. Others projects choose to donate to charities such as the Red Cross.
As Bitcoin increases in value, the climate suffers
Prices falling for Bitcoin, Ethereum, and other cryptocurrencies results in miners reducing the size of their equipment inventory. When this happens, the speed at which these machines run also decreases.
In November 2018, it was estimated by Digiconomist that over a span of 20 days, energy costs increased by about half. Even when prices rose again in 2022 for Ethereum, the cost of electricity still continued to go up.
The high electricity usage is due to the fact that cryptocurrency mining requires a lot of computing power. This process of verifying and adding transactions to the public blockchain, known as “mining,” can be very energy-intensive.
As more people become interested in cryptocurrency, the demand for mining grows. This, in turn, increases the strain on the global energy supply. In fact, according to a study published in Nature Climate Change, cryptocurrency mining could single-handedly push global temperatures up by 2°C within just 30 years.
What does the future hold?
Digital money is here to stay, and ethical choices must be made. It’s critical to continue what was started at the end of last year: utilizing crypto payments for companies all over the world, as well as environmental causes. Sustainable cryptocurrencies, “green” crypto, and eco-friendly digital money are just a few ways to combine the two.
For example, Nano`s energy consumption is almost non-existent, its carbon footprint is small as a result of a compact infrastructure, and nano transactions are feeless. Green digital payments are possible for your business: streamline your payments and help the environment.
Future Cryptocurrencies Will Be More Sustainable And Eco Friendly
Cryptos are here to stay, and so ethical choices have to be made to ensure a sustainable future environment. To deliver a sustainable future, many analysts are predicting that eco-friendly cryptos will soon flood the market. This is because they offer a number of advantages over traditional cryptos.
For example, they are more environmentally friendly and easier to use. They can be used in a variety of ways, including online payments and money transfers. This makes them a viable option for everyday transactions.
They don’t require as much energy to produce and use, which means they are less harmful to the environment. This is a big selling point for many people, especially those who care about sustainability.
According to the Ethereum Roadmap Update, the network will soon be moving to a POS system. That’s when Ethereum will consume 99.98% less energy than it is consuming right now, which is a lot! So by 2023, we might see Ethereum as one of the top sustainable and eco-friendly cryptocurrencies.
With the growing popularity of proof-of-stake rather than proof-of-work mechanism and not relying on energy-intensive mining operations, it seems that the future of eco-friendly cryptos is bright and inevitable.
Inside a cryptocurrency mining facility
Russell Weiss owns and manages Flex Data Center, a 15,256-square-foot colocation company in Reston, Virginia. The data center primarily hosts website servers, cloud systems, and other network equipment, renting its space to private and commercial operations alike.
About a third of his clients are private cryptocurrency investors who use his facility to securely store their mining computers. The Flex Data Center opened in 2001 but Weiss said he didn’t see an interest in the use of his facility from cryptocurrency miners until the 2017 Bitcoin boom.
Because the computers are difficult to power and cool at home, the Flex Data Center provides a secure site to do both.
The Flex Data Center is housed in a nondescript gray building, marked only by an army of security cameras and an address pasted in plain white lettering on the glass door. Wedged between childcare and an athletic center, the place is entirely underwhelming from the outside.
Yet inside, it is teaming with whirring machines, blinking computers, and a heat that envelopes visitors like an electric blanket.
Shelves half-filled with mining rigs and ASIC computers fill one of the three rooms at the facility, and black plastic barriers surround the shelves, directing a steady stream of hot air up towards the air conditioning ducts, a practice that facility manager Steve Marish said helps the facility use its energy more efficiently.
When the shelves of computers are running at full capacity, temperatures can reach upwards of 100 degrees Fahrenheit, Marish said.
New eco-friendly cryptocurrencies on the horizon
Concerns are mounting over the amount of energy consumed in the mining of cryptocurrencies, and new efforts are emerging every day to improve the sector’s environmental standing. Renewable energy usage, more efficient protocols, and carbon footprint offsetting are among the initiatives being implemented.
TRG Datacenters believes that we will start to see the development of sustainable and eco-friendly cryptocurrencies. The company has pinpointed nano, IOTA, and chia as drivers for this change because of their dedication to lessening the environmental impact of transactions.
More than 45 businesses and individuals in the cryptocurrency, finance, energy, and technology industries have joined the Crypto Climate Accord, which aims to decarbonize the sector while also net-zeroing emissions from cryptocurrency electricity usage by 2030.
Are there any eco-friendly NFTs?
There are more sustainable systems in the works. The Ethereum Foundation estimates that a new version of Ethereum (called Ethereum 2.0) will use 99.95% less energy when it is complete.
But the switchover is still some years away. In the meantime, some platforms are working on more efficient ways of handling NFTs.
The Flow Protocol is one example. Flow is a decentralized platform that uses an energy-efficient consensus algorithm called “proof of stake” (instead of the power-hungry “proof of work” used by Bitcoin). This means that Flow can run on far less energy than other protocols.
The popular NFT platform WAX also uses proof of stake and is working on making its system even more efficient. WAX has partnerships with several green energy providers, and it aims to be completely carbon-neutral by 2021.
So, while NFTs are currently quite energy-intensive, there are some eco-friendly options out there, and it’s likely that more will emerge as the industry grows.
What can I do to offset my carbon footprint from NFTs?
If you want to offset your carbon footprint from NFTs, you can do so by buying carbon credits. Carbon credits are a type of voluntary market-based mechanism used to reduce greenhouse gas emissions.
You can buy carbon credits through various online platforms, such as Carbonfund.org, NativeEnergy.com, and TerraPass.com.
When you buy a carbon credit, you are essentially funding a project that reduces greenhouse gas emissions by an equivalent amount. For example, you might buy a carbon credit that represents one ton of avoided carbon dioxide emissions.
Carbonfund.org, for example, offers carbon offsetting for both individuals and businesses. The individual offset options include renewable energy, forestry, and energy efficiency.
If you’re looking to offset your carbon footprint from NFTs specifically, you can do so through the WAX platform. WAX has a partnership with Carbonfund.org.
Why is Bitcoin so bad for the environment?
Bitcoin mining has more energy consumption each year than Malaysia or Sweden, according to the Bitcoin Electricity Consumption Index, run by Cambridge University’s Centre for Alternative Finance.
Campaigners claim that the impact is exacerbated by the fact that most of the mining takes place in China, which is heavily reliant on coal power. Bitcoin has been on a rollercoaster ride over the past two years or so.
Its price soared during the pandemic; it had gone from about $6,500 in March 2020 to as high as $67,000 in November 2021 before abruptly losing half its value in a matter of weeks.
How bad is Dogecoin for the environment?
TRG Datacenters in Texas has analyzed a range of cryptocurrencies and ranked them according to the amount of energy required to power each transaction.
Dogecoin used 0.12kilowatts of energy per hour (kWh) per transaction, well ahead of bitcoin, which was at the bottom of the table, using 707kWh.
However, critics claim its true environmental impact is difficult to assess because of the complexity of its mining system.
Special mention – Ethereum (ETH)
For many years, Ethereum has been talking about going green loudly, but there’s been little follow-through on all of the promises. The cryptocurrency continues to consume significant amounts of power every year, enough to run a sizable nation or power an average American home for a day. Ethereum is still more energy efficient than Bitcoin and is at least attempting to make things better.
While Ethereum’s creator has long recognized the wasteful nature of today’s cryptocurrency sector, he began a huge project to rewrite the code in 2014 as part of his crusade against bloat. The aim is to convert the current Proof of Work system with a Proof of Stake algorithm, but progress has been sluggish.
As of 2019, the developers abandoned their original plan to repair the plane while it is in flight and opted for a two-chain approach, pairingProof of Work with Proof Of Stake. They named this version Ethereum 2.0.
In December 2020, Ethereum launched Beacon Chain as the first step in this shift of the network. Under Beacon Chain, Ethereum 2.0 stores and manages the registry of validators and deploys the Proof of Stake consensus mechanism.
The original chain is still running alongside it for now, but full implementation isn’t planned until 2022. So, we haven’t seen the promised one hundredfold reduction in energy per transaction yet.
With more than 4,500 tokens out there, I’m sure I’ve missed a few excellent options for sustainable cryptocurrencies. Given the exponential growth in this area of digital finance, chances are the best is yet to come anyway.
If you know of an eco-friendly cryptocurrency, please leave a comment or send us an email and we’ll take a look. Feel free to check out our environmental analysis of Dogecoin as well.
In the meantime, if you’re an investor who has already reapportioned your assets from fossil fuel companies and so forth into more sustainable investments, consider doing the same with any cryptocurrencies you hold.
And if you already have a solar array set up, or are living a sustainable lifestyle, there’s basically nothing to lose by signing up to SolarCoin and/or BitGreen.
Sustainable cryptocurrencies are an important part of the future of finance, and there are many different options to choose from. While Bitcoin and other major cryptocurrencies have a ways to go in terms of energy efficiency, there are already some coins that are leading the way in terms of sustainability.
These include SolarCoin, BitGreen, and Ethereum 2.0. As the industry continues to grow, we can expect to see even more sustainable options emerge.
What’s the bottom line?
Although much remains to be done to reduce the environmental impact of trading cryptocurrency, eco-minded investors can feel good about the fact that there’s a notable and ongoing movement in that direction.
While the Crypto Climate Accord continues its work and the environmental impact of cryptocurrency trading remains under scrutiny, concerned traders have many ways to vote with their coins. From investing in more sustainable projects to simply holding onto their coins, each and every crypto user can do their part to make the industry greener.