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Cryptocurrency: Top 10 Greenest Cryptocurrencies?

What Are the Top 10 Greenest Cryptocurrencies?
Greenest Cryptocurrency

What Are the Top 10 Greenest Cryptocurrencies?

When Elon Musk cited environmental concerns as the reason Tesla would no longer accept bitcoin as payment, the notion that cryptocurrencies are harmful to Mother Nature took off faster than a billionaire heading into outer space.

In his mid-May statement, Tesla stated that he is "concerned about the increasing use of fossil fuels for Bitcoin mining and transactions." This quickly caused the market to crash, with bitcoin falling from around $ 57,700 on May 12 to a two-month low of $ 42,879 on May 17.

This leads to an important question: what are the most environmentally friendly cryptocurrencies, at least compared to Bitcoin?

How much energy each crypto and its blockchain consumes, as well as pertinent info on decentralization, security, and whether each cryptocurrency would remain ‘eco-friendly’ if it operated at a much bigger scale.

Top 10 Greenest Cryptocurrencies

Also Read - When Is The Right Time To Invest And Sell Bitcoin cryptocurrency?

  • Ripple (XRP)
  • EOS (EOS)
  • Stellar (XLM)
  • Tezos (XTZ)
  • Cardano (ADA)
  • Solana (SOL)
  • Polkadot (DOT)
  • Nano (NANO)
  • Dogecoin (DOGE)
  • Ethereum (ETH)
Ripple (XRP)

While XRP hasn't been affected by the recent Tesla-inspired drop, it hasn't suffered as much as its main rivals, dropping 5.5% in the past seven days, compared to a 22% drop for BTC and 10 % drop for ETH. The relative gentleness of its decline may be due in large part to its lower energy needs, which in turn should have less environmental impact.

According to an April report from server company TRG Datacenters, XRP was the least energy intensive of the seven major currencies it reviewed. It consumes 0.0079 kWh of electricity per transaction, which is only 0.00112% of the 707 kWh that Bitcoin consumes per transaction. To put it another way, Bitcoin's energy consumption per transaction represents an increase of 8,949,267% over that of Ripple (according to TRG Datacenters).

Other available data support this assessment. Ripple's owndata, from 2019, indicated that it was consuming 474,000 kWh per year, with Bitcoin consuming 57.09 billion kWh and Ethereum 2.57 billion kWh. Similarly, a July 2020 Ripple blog estimated that its network could power 79,000 light bulb hours for every million transactions, while one million Bitcoin transactions equals 4.51 billion light bulb hours, which makes Ripple "57,000 times more efficient".

The secret to Ripple's environmental compatibility is that it doesn't use the Bitcoin (or Ethereum) proof-of-work consensus mechanism. Instead, it uses a "distributed agreement protocol" that requires an agreement between a large majority of nodes to confirm transactions. While critics have suggested that this makes Ripple much less decentralized and secure than Bitcoin, it does mean that Ripple could scale well beyond Bitcoin and still consume less power.

In fact, Ripple pledged in February to achieve net zero carbon emissions by 2030. This obviously does not mean that it would not consume energy, only that the energy it does consume will be generated entirely from renewable sources.

EOS (EOS)

EOS is also lacking in resources compared to Bitcoin, given that it uses a proof-of-stake consensus mechanism (actually, delegated proof-of-stake, but we don't need to enter details). It is also worth noting that, over the past seven days, its price is down by only 7.9%, although it is true that it has not done as well during the recent bull market as other currencies.

According to data from EOS itself, it is 66,454 times more energy efficient than Bitcoin and 17,236 times more efficient than Ethereum. Its annual energy use is just 0.0011 tWh (based on 2018 data), compared to what was then an annual use of 73.1 tWh per year for Bitcoin.

EOS has already declared itself the world's first carbon-neutral blockchain, having started a plan in 2018 to buy carbon offsets for its own energy use.

On the other hand, critics have again argued that delegated proof of stake results in considerably more centralization than proof of work, so investing in EOS is likely to depend on your priorities.

Stellar (XLM)

Stellar has been one of the few coins to have risen in price during the recent selloff. Its value has risen as much as 20% over the last week, from $ 0.577 on May 9 to $ 0.695 on May 17.

Data from the nonprofit Poseidon Foundation (with which Stellar partnered in 2018) reveals that the blockchain uses 0.03 Wh of energy per transaction (or 0.00003 kWh), compared to 634,000 Wh (or 634 kWh). for Bitcoin. This makes it more energy efficient than the Visa network, according to the Foundation.

Stellar does not use proof of work or proof of stake, instead taking advantage of a federated voting system. That's why you can get away with using so little power, although it almost goes without saying that researchers have suggested that your blockchain is "significantly centralized" and subject to "cascading failures" in the event that only two nodes fail.

Tezos (XTZ)

Tezos is another energy efficient blockchain, although it hasn't escaped the recent recession, dropping 23% in the past seven days.

Still, many orders consume less energy than Bitcoin or Ethereum. A Tezos Medium post published in March put its annual power consumption at just 0.00006 tWh, and the latest annual figures for Bitcoin and Ethereum rose to 130 tWh and 26 tWh, respectively.

As with most other eco-friendly blockchains, Tezos runs a proof-of-stake consensus mechanism, with token holders able to delegate their XTZ to validators who then use their funds to confirm transactions.

Cardano (ADA)

Cardano has been perhaps the biggest beneficiary of the recent bear market, rising 24% in seven days, from $ 1.76 to $ 2.19. This is almost certainly the result of its apparent green credentials.

According to the same TRG Datacenters report cited above, Cardano consumes only 0.5479 kWh per transaction, compared to Bitcoin's 707 kWh. This makes it around 1,290.38 times more energy efficient than Bitcoin, and proof of stake, once again, is the main reason for this superiority.

Solana (SOL)

Solana has been another winner, rising about 13.7% in the last seven days, to $ 50.71 (at time of writing).

While there is no hard data on Solana's energy consumption, community members have estimated the latter at a very modest 1,200 kWh per year (although we must emphasize the highly informal and biased nature of such figures).

While we cannot fully vouch for such estimates, Solana's use of a novel history proof protocol, which involves time synchronization across all nodes, allows blocks to be confirmed even more quickly than with proof-of-stake mechanisms. . As such, it is likely to be very energy efficient and should be much less intensive than Bitcoin and other proof-of-work cryptocurrencies.

Polkadot (DOT)

Polkadot uses its own proof-of-stake consensus mechanism, known as nominated proof-of-stake, whereby token holders stake their DOT with validators that secure the Polkadot blockchain.

Using the nPoS mechanism almost certainly makes Polkadot consume less power than Bitcoin, although neither Polkadot nor any other organization has produced data to confirm this.

That said, Polkadot's green credentials have been supported to some extent by the fact that it hasn't dropped as much as PoW cryptocurrencies in the past seven days. It has fallen less than 1%, from $ 39.74 to $ 39.65.

Nano (NANO)

Having increased the price by around 10% in the past seven days, Nano is another big winner from the last fallout. Originally a coin that used delegated proof of stake, it now uses a similar mechanism known as Open Representative Voting, whereby validators vote on each transaction.

Either way, it is another energy efficiency chain. A 2018 estimate puts its consumption at a low of 0.000112 kWh per transaction, which makes it even more efficient than XRP (although obviously the data comes from different sources at different times).

Dogecoin (DOGE)

The TRG Datacenters report suggests that Dogecoin is one of the most environmentally friendly cryptocurrencies out there. Their research suggests that the cryptocurrency consumes only 0.12 kWh of energy per transaction, compared to 707 for Bitcoin.

This seems impressive, although Dogecoin is also down 12% over the last week. Not only that, but Dogecoin is also a proof-of-work cryptocurrency, just like Bitcoin. In fact, Dogecoin relies heavily on the core Bitcoin code, so it works the same way.

So what explains its lower footprint per transaction? Well, since it is used much less and less frequently than Bitcoin, and has a smaller community of miners, the difficulty of its network is much less. This basically means that much less computing power is required to process and validate transactions, which explains why it consumes much less power.

More precisely, BitInfoCharts puts Bitcoin's difficulty at roughly 25 TH / s, while Dogecoin's is 4.7 MH / s. In other words, Bitcoin is more than five million times more difficult than Dogecoin. This makes Dogecoin's supposed energy efficiency (5,891.6 times higher) seem a bit trivial, as it would disappear if Dogecoin were to scale to the size of Bitcoin.

Ethereum (ETH)

While Ethereum is still currently a proof-of-work cryptocurrency, it is planning an eventual transition to proof-of-stake, which will occur sometime towards the end of the year. This would make it considerably more environmentally friendly, putting it in the same league as chains like Cardano and Tezos.

However, for now, it is actually the second most environmentally unfriendly crypto. Digiconomist places its annual consumption at around 49.16 tWh, between Portugal and Peru. This may explain why it has increased alongside cryptocurrencies already using a PoS mechanism.

Don't forget about Bitcoin (BTC)

Yes, Bitcoin is the worst cryptocurrency currency in terms of energy consumption, but its proponents would strongly argue that its potential harm to the environment is being overstated.

Digiconomist currently estimates its annual energy use at 118tWh (although, as noted above, it can go as high as 130 tWh). However, Bitcoin supporters have long claimed that it uses 73% renewable energy sources.

This figure is based on a 2019 report from CoinShares, which stated that Bitcoin mining is "more powered by renewables than almost all other large-scale industries in the world."

That said, more recent research from the University of Cambridge, arguably a more trustworthy and disinterested source of information than CoinShares, states that only "39% of proof-of-work mining is powered by renewable energy, primarily hydropower." The important distinction Cambridge researchers make is that while 76% of miners use renewable energy at least intermittently, green sources account for only 39% of overall proof-of-work mining.

Nonetheless, many Bitcoiners argue that Bitcoin is helping fuel the expansion of renewables, an argument made to Business Insider in March by mining company Foundry. And with Tesla seriously damaging Bitcoin's reputation through its disapproval of cryptocurrency, its push for renewable energy sources can only accelerate in the near future.

Originally published at - What Are the Top 10 Greenest Cryptocurrencies?

  • Cryptocurrency: Top 10 Greenest Cryptocurrencies?

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