There are influential people across the world such that their words can change many things. One of these people is Elon Musk, Chief Executive Officer at Tesla. He once said that electric car makers will not accept bitcoin to purchase vehicles, and the value plummeted.
In other words, Elon Musk was concerned about the impact of cryptocurrency on the environment.
Having that in mind, are there eco-friendly alternatives? We have provided essential information on the environmental impact of cryptocurrencies.
Let’s get started:
Why are Cryptocurrencies not Suitable for the Environment?
The mining process makes cryptocurrencies not suitable for the environment. But the good thing, there is a renewable crypto mining process, read on.
When mining Cryptocurrencies, these are things to use:
- A higher-powered computer that can complete and verify transactions instead of coins
- Non-renewable energy sources like coal – one of the dirtiest fossil fuel
- A vast amount of electricity that can power complex algorithms
This means that mining bitcoin will consume a higher amount of electrical power.
Are There Environmentally Friendly Cryptocurrency?
Mining bitcoin will use a worrying amount of fuel. This will have a negative effect on the environment. But the good thing is, eco-friendly cryptocurrencies are inflicting less damage to the planet.
Some of these cryptocurrencies have an array of concerns that surround cryptocurrencies and the environment.
This is because small currencies have a lower carbon footprint which results from a few transactions. Other digital assets are energy efficient which helps reduce environmental impact.
Which Cryptocurrencies are Environmentally Friendly?
If you are looking for environmental cryptocurrencies, let’s dive in.
Chia is an excellent example of environmentally friendly cryptocurrencies. This results from the use of less energy to design.
Unlike bitcoin that uses proof of work to mine, chia uses the farming process. The process uses a concept referred to as proof of space.
The good thing, you can farm chia coins through desktop or laptop computers on the hard drives. Unused space is used as a “plot.”
After you download the software completely, the computer will plot and farm chia for you.
The other environmentally friendly cryptocurrency is IOTA. This crypto uses the “Tangle” method – an alternative option that doesn’t require miners. This will also be maintained using smaller devices thus lower energy requirements.
Nano is another environmentally-friendly cryptocurrency. When you look at some digital currencies such as bitcoin, they usually use a proof-of-work basis. Therefore, this type will reduce the waste from crypto transactions.
Nano, therefore, uses an Open Representative Voting protocol that aims to increase efficiency and reduce energy.
Cardano has a significant difference with some environmentally unfriendly cryptocurrencies such as bitcoin. It uses Ouroboros – a proof-of-stake system.
If you want to use it, you have to purchase tokens to join the network, where you will save a significant amount of energy.
Solarcoin is a global and independent cryptocurrency. It is designed such that it can promote the creation of solar energy through generators with solar coins.
This is where generators claim one coin after every megawatt-hour made by solar technology.