Cryptocurrencies may be an online trend, but they also generate a rather high carbon footprint. With the world looking for ways to be more environmentally friendly and build a sustainable future, it makes sense that cryptocurrencies will eventually need to fall in line.
Investors, the general public, and regulators are raising the alarm when it comes to how much resources are being used for crypto mining.
As a result, the trend towards environmentally-friendly cryptocurrencies has increased in recent investment cycles.
The most prolific consumer of energy is bitcoin, so much so that Elon Musk has even removed Bitcoin crypto as a payment method for his electric cars.
While it can be easy to spot what type of crypto is not eco-friendly, it can be much harder to pinpoint environmentally-friendly cryptocurrencies and those that are energy-efficient but also are focused on contributing to a more sustainable future.
In order to validate a blockchain transaction, a proof-of-work protocol has been put in place.
This means that the user will need to provide a mathematical formula to maintain blockchain security in real-time.
Bitcoin mining is completed by a computer in a process that allows it to solve a series of complex algorithms.
Though effective, this process consumes a huge chunk of energy.
Blockchain technology is extremely energy-intensive since smart contracts need significant computing power.
Table of Contents
- TLDR; Eco-Friendly Alternatives to Bitcoin
- What’s The Impact of Cryptocurrency on Green Investing?
- Why Should You Invest In Only Eco-Friendly Cryptocurrencies?
- Is Eco-Friendly Cryptocurrency an Effective Sustainability Tool?
- Our Selection Criteria For The Best Eco-Friendly Cryptocurrencies
- Best Green, Eco-Friendly Cryptocurrencies
- #1 Nano – NANO
- #2 SolarCoin – SLR
- #3 EOSIO – EOS
- #4 MetaHash – MHC
- #5 BitGreen – BITG
- #6 Cardano – ADA
- #7 Chia – XCH
- #8 Stellar – XLM
- Which crypto is the most environmentally friendly?
- What is the most energy-efficient cryptocurrency?
TLDR; Eco-Friendly Alternatives to Bitcoin
If you want a quick summary of some of our favorite eco-friendly digital currencies, here is a table summary of our favorite picks.
Best solar energy crypto
1 Solarcoin for every MWh from solar
Most energy efficient crypto
Scalable, lightweight digital currency
Best energy crypto
Facilitates peer-to-peer energy trading
Energy efficient peer-to-peer transactions
Exchange any type of currency at scale
What’s The Impact of Cryptocurrency on Green Investing?
The dynamics of the market play an important role in how much energy cryptocurrencies use.
The bitcoin environmental impact specifically leaves behind a giant carbon footprint.
In fact, any time bitcoin drops in prices, many of the big players turn off their mining devices which leads to a direct drop-in worldwide energy usage totaling as much as 12%.
The number may seem small, but consider that only a few supercomputers are responsible for more than 10% of the entire planet’s entire energy use.
To showcase just how important green cryptocurrencies can be, let’s look back to 2018.
In November of that year, the Ethereum price dropped, which led to miners cutting the amount of power used to mine by half.
In just 20 days, the electricity consumption went from 20 TWh to just 10 TWh. To put it into perspective, New York City as a whole uses on average 11,000 Megawatt-hours of electricity each day.
1 MWh is enough to power 100 homes. So, just due to a price drop, one single crypto dropped to 10 Twh for 20 days, and 10 Terawatt Hours equals 1,000,0000 Megawatt Hours.
Right now, in 2021, just Ethereum mining alone consumes on average 31 Twh monthly.
While some miners have moved their operations to sources that offer renewable energy, overall, the vast majority still place a tremendous strain on the earth’s resources.
What’s worse is that 75% of the bitcoin mining globally is produced in China, of which coal-powered sources back at least half of the mining.
So, not only is it energy-dense, but it also is contributing to global warming at an alarming rate.
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Why Should You Invest In Only Eco-Friendly Cryptocurrencies?
It is not always easy to tell which are regular crypto and which are green cryptocurrencies. There are a lot of aspects to consider when choosing which one to invest in.
On average smaller currencies will have a smaller footprint because there is less in circulation.
Regardless of the size or popularity, it is important to invest in eco-friendly cryptocurrency if you actually care about the planet.
No matter which one you choose, often, if you scale them up, they will be just as energy-draining as some of the top options already on the market.
However, just like with consumer goods, you can help shape the trends by investing in crypto that uses renewable energy mining methods instead of those that depend on fossil fuels.
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Is Eco-Friendly Cryptocurrency an Effective Sustainability Tool?
Investing in eco-friendly cryptocurrencies is one way to work towards sustainability and reducing the environmental impact from the mining process, but only if you are already in the field, to begin with.
Not investing will reduce the popularity and thus remove the pressure on the world’s energy banks.
However, if you are considering buying crypto or if you already have a sizable crypto wallet, you can move towards sustainable options to help support the environment.
Opting for crypto that uses proof of storage or lattice bases is a great way to drive sustainability within your current investing parameters.
Another way to support sustainable cryptocurrency is by backing those that allow mining on devices that are ASIC-based, which happen to process energy more efficiently than GPUs.
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Our Selection Criteria For The Best Eco-Friendly Cryptocurrencies
Now that you understand more about regular crypto and how mining affects the environment, it will be easier to make better decisions that support sustainability.
We have put together a list of eco-friendly cryptocurrencies for you to consider, and there are a few things that allowed them to make our list.
To make our list, they must be more energy-efficient than the top cryptos such as Bitcoin. That means they can’t function on the proof of work method, which uses a vast amount of energy per token.
Those that use proof of stake and proof of storage will be on our list.
Of all options, those that use block-lattice are the most efficient and considered the gold standard among all of our choices.
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Best Green, Eco-Friendly Cryptocurrencies
This list of green, eco-friendly cryptocurrencies is not in any particular order, but each one is worth checking out if you are looking to make greener investment choices.
#1 Nano – NANO
Nano uses a dramatically smaller amount of energy when compared with other cryptocurrencies on the market. While you may have never heard of it, the currency has been around since 2015.
It is a lightweight currency that is scalable, features a very small carbon footprint as a result of more energy-efficient protocols, and doesn’t need mining to be effective.
It can minimize its carbon footprint by utilizing block-lattice technology to maintain its energy efficiency.
While it does need proof of work, block-lattice technology allows users to have an account chain that operates beyond the blockchain.
The ORV account holders choose a rep and then place votes. That rep will then confirm block transactions securely.
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#2 SolarCoin – SLR
This crypto is decentralized, free from government interference, and globally operated. It works in the same way as other cryptos, but the important difference is that it is run and supports eco-friendly activity in solar technology.
Specifically, it runs on verifiably produced solar energy.
Not only does it reduce the dependence of the crypto world on older forms of energy, but it also gives people incentives for using renewable forms of energy instead.
For every 1mwh produced by solar energy, 1 SolarCoin is generated. As a regular consumer or a big company that owns solar panels, you can manually upload documentation regarding your production exchange for cryptocurrency.
There are also automated updates that can be connected directly to solar panels in the works.
See Related: Ways to Invest in Cobalt (Sustainably)
#3 EOSIO – EOS
EOS is a green cryptocurrency, but it also happens to be rather mainstream. It is very easy to set up, making it one of the most well-loved blockchain currencies that are available to the public.
It has no cost, can be scaled easily, and can be written in various programming languages with ease.
Instead of being a proof of work platform, it operates via proof of stake, which is much more sustainable.
This is a great option if you are already deep in the crypto world but want to convert your traditional balance to more sustainable and ESG approved.
See Related: How to Achieve Carbon Neutrality
#4 MetaHash – MHC
MetaHash is a no-fee decentralized network that is as quick as it is efficient. What makes this crypto a green choice is that you can mine it using low-key hardware which uses significantly less processing power.
You can write a standalone program or use something open source to make the most of your mining efforts.
It runs on a proof of stake methodology instead of proof of work, which dramatically reduces energy consumptions.
It also operates its stakes a bit differently than other cryptos by using multiple Proof of Stake (PoS) mechanisms. This validation process is multi-layered which helps to protect it from corruption.
In the event that corruption is suspected, it is easier and quicker for the network to vote and rebuild itself to neutralize the threat.
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#5 BitGreen – BITG
BitGreen launched in 2017 as a direct result of the ravages being wrought on the environment by Bitcoin.
As those in the crypto community noticed the significant energy consumption caused by the popular digital currency, they decided to create a viable alternative to the proof of work method.
This energy-efficient alternative is community-driven and also runs a non-profit foundation dedicated to sustainability efforts.
The foundation also maintains the BitGreen project, and the crypto operations fall under that banner.
Further, eco-friendly actions are incentivized, making it easy for those with no crypto or smaller reserves to get into the market sustainably.
You can earn BITG coins when you carpool, volunteer, or even purchase certain sustainable products like coffee from approved suppliers.
The proof of stake method is paired with deterministic master nodes and segwit as part of their standard protocol.
You can also use the coins on various exchanges and by spending the coins on goods directly from BitGreen’s partners.
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#6 Cardano – ADA
Ethereum is one of the most popular cryptos on the market today, and its co-founder developed Cardano, a peer-reviewed blockchain and happened to be the first of its kind.
In addition, it has been reviewed by both scientists and academics.
Its main purpose is to serve as a form of digital currency, but it can also be used for other purposes.
Bitcoin can only reach 7 transactions each second, but this green crypto can reach 1000 per second while also using less energy per transaction.
It also operates on a proof of stake model as many of the cryptos on our list. In order to participate in this coin, you have to buy tokens that will allow you to join the network.
Instead of relying on a proof of work model, buying tokens allows an enormous amount of energy to be preserved without the major bloat that comes from some of the older forms of cryptocurrency.
See Related: What is the Real Impact of Climate Migration?
#7 Chia – XCH
Chia is lesser-known but one of the more energy-efficient digital currencies that can even be mined in the cloud.
Amazon Web Services has a cloud platform that allows you to farm chia efficiently and quickly in a way that is not overly draining on the environment from excessive energy consumption.
The currency is the brainchild of the creator of BitTorrent. It uses both a smart transaction platform and blockchain to operate a decentralized network using hard drive space.
It operates on a proof-of-space-time model, which allows you to earn currency by simply storing data for a specific period of time.
Like others on the list, it was created in direct response to the sheer amount of power consumed by traditional crypto and the mining processes used for their verification.
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#8 Stellar – XLM
This crypto was originally part of Ripple but branched off on its own in 2014. The goal is to be a sort of bridge between digital currency and regular currency.
It is most similar to PayPal and had its seed funding from Stripe, FastForward, and Google among others.
Amazingly, it is even Shariah-compliant on top of being ESG approved.
You can use it to exchange any number of fiat and digital currencies. It uses the token system, which helps to lower the carbon footprint while also maintaining privacy and security across the board. It is open-source and also allows you to invest in renewable energy directly.
Which crypto is the most environmentally friendly?
This is a question most investors ask themselves when looking for the most environmentally-safe investment. Today’s eco-conscious society appreciates investments that will not bring deterioration of our environment and there are plenty of cryptocurrencies out there that put the Earth first. Green cryptocurrency stands for more than just noxious emissions – it also includes reducing hazardous waste and using sustainable sources of energy – but most importantly – protecting our natural resources!
What is the most energy-efficient cryptocurrency?
The most energy-efficient cryptocurrency is Cardano, as it only requires a small amount of energy to operate. This is because most of the computation takes place off-chain and adopts a Proof of Stake (PoS) method which results in minimal energy consumption. Other cryptocurrencies that are relatively energy efficient include Solarcoin, Stellar, and Powerledger.
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