Bitcoin mining is not only a complex process, but it also involves the consumption of enormous amounts of electricity. It takes approximately 2200 kWh to power a single bitcoin. If you were to boil kettles with the same amount, you could easily boil 1500 without a hitch. But this issue is not limited to bitcoin mining; other forms of cryptocurrencies face the same problem. The proof of work or PoW consensus mechanism used for mining cryptocurrencies, in general, uses up similar amounts of electricity.
With more and more people becoming aware of the increasing environmental impact of crypto mining, investors are starting to look for greener alternatives. But the real question is; is green crypto possible? Let’s find out!
Market Shift Towards Greener Crypto
Initially, there was little concern about electricity consumption back when bitcoin and other cryptocurrencies were first introduced. But more people became aware when influential personalities started commenting on how hazardous cryptocurrency is for the environment.
The best example would be Elon Musk, the CEO of Tesla. At one point, he hinted investing in crypto. That became true when he started taking payments in the form of bitcoins for Tesla. But after some time, he halted such payments because of environmental concerns. After that, the bitcoin price crashed. But most of all, it made people realize just how severely the environment was being impacted by bitcoin mining. China’s crackdown on cryptocurrencies also played a part in making people recognize of concerning crypto mining is.
As a result, current and new blockchain projects have started developing eco-friendly cryptocurrencies. Ethereum is a cryptocurrency that aims to create green crypto possible by shifting from proof of work to proof of stake (PoS). The PoS is another consensus mechanism like the PoW, which is much more energy-efficient. This method also ensures that miners don’t create an extra coin that they didn’t earn.
Is a More Sustainable Crypto Possible?
There are several ways to create sustainable crypto, but there is no way to ensure fault-free methods. But that hasn’t stopped developers and advocates from working on projects to develop eco-friendly methods for crypto mining.
One of the most significant attempts that are being made to make crypto more sustainable is to ensure that renewable resources power it. The goal is to ensure that by 2025 all blockchain systems use eco-friendly alternatives for generating electricity.
In a recent survey by the Bitcoin Mining Council, it was seen that almost 67 percent of the miners were using renewable energy mix for mining bitcoins. But this was a survey of only 37 percent of the BMC’s network. While bitcoin is a core element of crypto trading, there are other cryptocurrencies to consider as well.
Many are considering wind and solar energy options, but the installation of solar or wind plants does not come cheap. Moreover, construct a renewable plant to generate enough energy to power cryptocurrencies. Even if it were possible, the cryptocurrency price would rise off the charts.
And if bitcoin can justify the spike in prices, other cryptocurrencies won’t be able to do the same. It will create hindrances for both investors and miners. It won’t come as a surprise if crypto trading crashes completely because of this change.
Another popular suggestion was to power mining operations by utilizing unused conventional power plants or surplus gas left after drilling operations. But this idea became obsolete soon after it was introduced because it didn’t help in reducing the environmental impact in any way. Instead, it just transferred the harmful emissions to an entirely different industry. Environmental activists and critiques heavily criticized this proposition.
The only option left is to come up with energy-efficient mining designs from scratch. Many crypto makers and blockchain systems are looking into the matter.
Current Eco-Friendly Cryptocurrencies
Currently, a few cryptocurrencies have already adopted the use of renewable energy. It has significantly reduced energy use, thus creating a pathway for green crypto. Here are some eco-friendly cryptocurrencies you can find today:
- Stellar: Stellar is a blockchain network that uses a cryptocurrency called lumen for crypto trading. Its consensus mechanism is different than PoW and PoS. It is faster and uses more trustworthy nodes for authenticating transactions globally. The best part about the Stellar network is that it can even be used for trading fiat money in addition to cryptocurrency.
- Nano: Nano was first introduced in 2015. It is more of a network than crypto and does not rely on mining. A blockchain lattice is used in this network. A simple explanation of how Nano works is that it creates a blockchain for every user on the network. The members of the network act as validators when transactions have to be made. This is called Open Representative Voting (ORV). Users don’t have to use the main blockchain; instead, they use their own peer-to-peer blockchain. As a result, it saves energy and time.
Besides Stellar and Nano, you can also find other sustainable cryptocurrencies, such as Gridcoin and Cardano. Of course, they won’t offer you the benefits that crypto trading of bitcoin or other popular cryptocurrencies provide, but they are a start that will ultimately lead to greener crypto.
While green cryptocurrency is a goal that needs to be achieved sooner than later, it is not yet possible to fully incorporate eco-friendly options into the mining process. While developers are working to find more sustainable options, and many have succeeded, it doesn’t offer the same profit margins as bitcoin. But then again, Ethereum is also a popular form of cryptocurrency, and that too is shifting to a PoS consensus mechanism and aims to eliminate energy consumption by 99.95 percent by the end of 2025.
You can currently invest in eco-friendly cryptocurrencies like Stellar and Nano that do not use as much energy. You don’t even have to mine with the Nano network, so that is the most energy-efficient method of investing in crypto today.
In the near future, it is possible for the whole mining process could become more sustainable so traders can invest in crypto without worrying about environmental concerns.