Global warming is on a constant rise today and has become of great concern to the world at large. As a result, more industries are trying to reduce CO2 emissions to help buffer the harmful effects of global warming. One of the sectors spearheading this movement is the cryptocurrency industry, which has already gained a bad reputation for the huge energy expenditure induced by mining. To right this wrong, green cryptocurrencies have been introduced and are slowly becoming mainstream in the crypto industry. So what are Green Cryptocurrencies and why are they important? Let’s get right into it!
Understanding Green Cryptocurrencies
So let’s cut to the chase, what are green cryptocurrencies? Green cryptocurrencies are unique kinds of digital currencies that focus on energy efficiency, usually with the purpose of carbon neutrality. Generally, this form of crypto is eco-friendly and uses a variety of techniques to become carbon neutral. Their mining actions are powered by renewable forms of energy sources, such as solar, hydroelectric, and wind.
Green cryptocurrencies require and use less energy and resources than conventional cryptocurrencies. This is because they are specially created to have less of an impact on the environment and are more ecologically friendly. Also, since green cryptocurrencies usually have lower transaction fees, less extra energy will be needed in the long term to perform transactions. This makes them better for the environment.
Concerns about energy consumption
Over the last few years, cryptocurrencies’ power expenditure has become an issue of concern to environmental advocates and people interested in this technology. This is because mining a cryptocurrency equals a demand for significant energy expenditure which occurs as a result of numerous calculations executed at once.
Every time somebody executes a transaction with a cryptocurrency, the trades are assembled into blocks to be duly verified by miners. To verify an existing block, miners must perform numerous calculations via their devices before they can be added to the blocks on the chains. This complex process is called proof-of-work.
The more prominent a cryptocurrency becomes, the more computing energy it will require and use to solve problems, consequently, the more energy crypto miners will consume to build more of these cryptocurrencies.
One of the most prominent energy-consuming cryptocurrencies is Bitcoin because the maintenance of the tools used for the blockchain requires enormous energy. This automatically translates into very high carbon emissions. Unfortunately, Bitcoin is just one of numerous conventional cryptocurrencies that are not environment-friendly and have a negative effect on the environment.
Why green cryptocurrencies?
Green cryptocurrencies have helped the environment greatly because they do not have to be mined via mathematical calculations, which is one major reason why conventional cryptocurrencies deplete large amounts of energy. For this reason, renewable energy and low carbon emissions are very attractive alternatives for crypto investment, especially because we are passing through a global climate crisis.
What are the factors to consider before investing in green cryptocurrencies?
Listed below are some of the best strategies to understand how you can invest in green cryptocurrencies:
1. Social networks
Green cryptocurrency projects are likely to have sustainability agendas, which allows them to deliver high-impact publicity on all their social media channels.
Also, since they are eco-friendly projects, they draw the attention of fired-up and futuristic-thinking people. So ensure that you research, find these green crypto channels, and stay updated if you want to be the first person to know about a new crypto launch.
2. Upgrades
Global warming is rapidly on the rise. For this reason, many crypto projects have been compelled to make eco-friendly changes. Essentially, many crypto projects have decided to cause the PoS consensus change and consequently spend less energy. So when you look through the market, it is easy to identify which crypto projects are modifying and becoming greener and others that have not.
3. Adopting cutting edge of technology
Stakeholders are likely to identify new crypto projects when there are innovations in the crypto industry. While PoS blockchains were prominent some time ago, in recent times, new consensus mechanisms that implement modifications in terms of power consumption have been introduced. Stay updated on the cutting edge of technology with networking and a little internet research.
4. Roadmaps and white papers
Roadmaps and white papers are two important documents for stakeholders who want to benefit from
investing in cryptocurrencies. Essentially, these documents give insight into an organization’s plans for the future. This allows you to know if you align with their crypto project’s plan, goals, and vision or not.
By studying a white paper you’ll be able to figure out whether a crypto project is green or not because it offers you an insight into the project’s effect on the environment. Also, it lets you know what steps are being carried out to minimize the adverse effects.
Best green cryptos to invest in the market
Here are some of the best green cryptos to invest in the market:
1. Cardano
Founded by Ethereum, Cardano seeks to make blockchain technology more efficient when it comes to scalability, interoperability, and sustainability. This network aims to have users buy tokens before joining to help save power expenditure. Cardano employs a Proof-of-Stake (PoS) algorithm called Ouroboros.
2. Chia
Chia is a prominent exchange platform that leverages blockchain technology to build an ecosystem that permits users to trade their crypto assets efficiently and prioritize sustainability. This platform was developed to be environmentally friendly. The “farming” process operated by chia uses hard drives – a notion called proof of space – instead of the regular mining, proof-of-work method used by Bitcoin, which depends on computer processors.
3. Nano (NANO)
Nano distinguishes itself with its extremely lightweight design and very efficient consensus mechanism. Using a block-lattice structure, this network removes the need for energy-intensive token mining. While prioritizing instant, feeless transactions, Nano offers users an eco-friendly solution that reduces energy usage and facilitates a seamless crypto peer-to-peer transaction experience.
4. SolarCoin
This coin was developed based on blockchain technology, and its objective is to generate solar electricity in today’s world. Although SolarCoin can also be used as a payment method, its main goal is to facilitate more clean energy production.
Its inventor, Nick Gogerty, aimed to develop a way to reward organizations that encourage and support solar energy.
5. Bitgreen
This environmentally friendly crypto was created as a green option for Bitcoin. Similar to Solarcoin, it aims to facilitate positive and environmentally friendly behavior. This will be achieved by rewarding users for their activities including volunteering, drinking sustainable coffee, and car-pooling. Bitgreen can be traded on exchange platforms or just spent with Bitgreen’s partners.
How to tell if a cryptocurrency is green?
Green Bitcoin has been presented as a way to oppose the excessive power consumption and CO2 emissions of traditional cryptocurrencies. If a cryptocurrency supports this movement and aims at being generally eco-friendly, it is most likely green.
Currently, climate change is a fast-rising issue, that has called for concerns among world governments. For this reason, green cryptocurrencies may just be the right way to make the cryptocurrency industry join the movement and be more environmentally friendly. By now, you should know that any cryptocurrencies created with carbon neutrality, are considered green and promoted due to their eco-friendly benefits. Although green cryptos are still in their infancy stage, they may just be the future of cryptocurrency.
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