The lights went out in a country far away. Is crypto the reason? Well, not always.
Blockchain-driven crypto projects don’t have to be extremely energy-intensive as of now. But the sad truth is that they often are, and the energy-guzzling Bitcoin network continues to thrive. So is sustainability even a thing to consider?
- Bitcoin consumes a lot of energy courtesy of its Proof-of-Work consensus mechanism
- Powerledger is one eco-friendly crypto-project with a women-intensive team
- Cardano, with ADA as the native token, supports proof-of-stake and over 45,000 transactions per second
- Nano, Algorand, and Harmony are some of the other resourceful, environmentally friendly projects to have on your radar.
Not a fun fact: Did you know that Bitcoin consumes more than 110 Terrawatt Hours of power each year, which subsumes 0.55% of global production?
Being a store of value that requires copious amounts of electric power to keep the ecosystem running even in 2022 is not going to be very sustainable for Bitcoin or the planet in the long term.
(To know more about the figures and solutions devised by Bitcoin, and to keep tabs on its energy needs, read this)
Given the huge carbon footprint of many crypto biggies like Bitcoin, it’s important for users to think about the alternatives available. So let’s talk about the top crypto projects that are sustainable and a lot greener.
The Logic Behind the List: How Did We Pick?
You simply cannot segregate crypto projects depending on how ‘Green’ they are. As an investor,eco-friendliness should be one of the many factors to look at. We have created a list of five tokens keeping some of the other parameters in mind, including:
- Global Market Dominance
- Market Capitalization
- Consensus Mechanism (Relates directly to Eco-Friendliness)
- Specific Real-World Problems they Solve
Quick Byte: All PoW-powered blockchains do not have the same energy requirements. The amount depends on the type of hardware setup needed to mine tokens relevant to the project. Bitcoin’s set algorithm, for instance, only allows the usage of ASIC-based computing devices, making it a tad more efficient than some other Proof-of-Work crypto projects.
Behind Bitcoin’s power-guzzling ways, along with many other cryptos, is the Proof-of-Work (PoW) consensus mechanism used. The PoW mechanism requires miners to solve several complex mathematical problems in order to mine coins. Doing this takes up insane amounts of electric power, making Bitcoin adoption a widely debated topic.
Launched in 2021, Powerledger is an Ethereum-based project best known for its ability to track environmental commodities and peer-to-peer energy trades. Simply put, it is a blockchain-based tech firm that builds specific software modules to drive energy and power democratization.
Powerledger amalgamates blockchain and renewable energy technologies to help develop a decentralized and transparent power grid. Some key facts about Powerledger include:
- It comprises two separate blockchain layers.
- It recently made a shift from Ethereum to the Solana blockchain for better scalability.
- It’s an ERC-20 token at its core.
- The native tokens are POWR and Sparkz.
Powerledger isn’t just a sustainable project. It is one of the crypto behemoths that aims at achieving grid parity and making renewable energy decentralized and transparent to the T. And if Powerledger wasn’t already exciting enough, it is one of the few crypto projects/companies to have a female co-founder (Dr. Jemma Green).
Developed by Charles Hoskinson, co-founder of Ethereum, Cardano is a haven for dApps, digital contracts, and speedy transactions. Capable of achieving over 1,000 transactions per second, it doesn’t compromise on speed for energy efficiency.
Here are the project highlights that make Cardano a top Bitcoin alternative across a few capacities:
- It is based on the Proof-of-Stake consensus mechanism, and therefore more energy efficient.
- It is one of the more scalable blockchains.
- It has a peer-reviewed blockchain that makes every update secure and double-checked.
- ADA is the native token of the Cardano ecosystem;
- It is almost 47,000 times more sustainable than Bitcoin.
Cardano brings a lot more to the table in addition to environmental efficiency. It is a smorgasbord of smart contracts, follows a two-layer approach to scalability, and is a Layer-1 blockchain. Read this article to learn more about the many advantages of Cardano.
Surprised to see a PoW blockchain on the list? Well, Nano is here because it is a different type of PoW—one that relies on minimal energy use. Its Block Lattice technology makes PoW networks fast, efficient, and less dependent on mining.
Here are some Nano-specific traits that you should know beforehand:
- Nano uses a proprietary voting mechanism to improve network speed and security.
- It can handle close to 125 transactions per second.
- It is one of the more scalable crypto projects.
- It uses DAG (Direct Acrylic Graphic) as the ecosystem of choice.
- The project is useful for commercial P2P payments.
- XNO is the native token relevant to the NANO network.
The Nano network can be scaled to support up to 1,000 transactions per second, making it one of the more celebrated PoW projects of the modern era.
Even though Algorand came into existence only in 2019, by the end of the following year it had close to one million daily transactions. A huge achievement. A pure Proof-of-Stake blockchain, Algorand is all about solving governance issues, keeping hard forks at bay, and keeping the network energy-efficient and transparent, all at the same time.
For the unversed, here are a few things that Algorand does better than others:
- The network is focused on being Carbon-negative over time.
- It boasts of high transaction speeds and low costs.
- It’s exceedingly scalable.
- The native token is ALGO.
- Algorand supports customizable and efficient smart contracts.
Additionally, Algorand makes a compelling case to the investors with its staking, exchangeable, and value-based capabilities.
Not many networks supporting smart contracts are as accommodative towards dApps as Harmony. Harmony’s high network throughput, lowest possible fee, and low latency make it a sought-after proof-of-stake blockchain network for building Non-Fungible Tokens and other fungible marketplaces.
However, you might want to know a few things about Harmony before considering it in your investment portfolio:
- It supports state sharding and Effective Proof-of-Stake as the key consensus mechanisms.
- It reduces centralization by keeping the network BFT-compatible.*
- It offers instant transaction finality
- There are no hard forks or argumentative divides.
- ONE is the native token used for transactions, gas fees, voting, and other network-specific activities.
Harmony lets users connect to Binance Smart Chain, Polkadot, Bitcoin, and Ethereum to improve cross-chain scalability.
*Byzantine Fault Tolerance (BFT) is a consensus mechanism where the network keeps functioning in the desired manner even if some participants, nodes, or mining pools get compromised. Read more here.
There are close to 5,000 tokens that are energy efficient in one way or the other. Apart from the ones listed, we have the likes of Tezos, EOS.IO, Avalanche, and TRON listed on our platform. But if you want to experience problem-solving of an exclusive nature, the five crypto projects mentioned above are the best choices.
That said, the list is anything but set in stone. New and existing projects with enhanced capabilities and an unwavering focus towards a minimal carbon footprint are coming up every day. Plus, with Ethereum 2.0—which is expected to deploy a Proof-of-Stake consensus across the network—already in the works, energy efficiency is likely to come to the bigger and more established blockchain networks too over time. Let’s hope they sit up sooner rather than later.
If any of the mentioned ‘Green’ projects interest you, download the CoinSwitch app and start tracking them, right away.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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