With the rising popularity of cryptocurrencies, voices criticizing the energy consumption and harmful impacts of crypto mining became more frequent. The scene has responded by increasingly offering eco-friendly alternatives to the more established coins. These tokens have been developed with sustainability in mind and aim to reduce the negative environmental impact often associated with traditional cryptomining. What eco-friendly cryptocurrencies are currently available on the market and how do they differ from Bitcoin and co?
Definition and significance of environmentally friendly cryptocurrencies
Eco-friendly cryptocurrencies are tokens that have been developed with a focus on the environment: Use of renewable energy in mining, sustainable blockchain protocols or technological advancements that are more energy efficient. They all allow investors to make sustainable investments.
BTC and other cryptocurrencies have come under the scrutiny of policymakers because of their negative impact on the environment, who are trying to counteract this with a variety of measures. This ranges from crypto bans in China to electricity rationing, taxation, etc. BTC mining in particular is energy-intensive and is often compared to the energy consumption of entire countries.
This is why environmentally friendly cryptocurrencies are so important, because they offer an alternative to polluting cryptocurrencies and give people the opportunity to support sustainable projects and initiatives. It also appeals to environmentally sensitive groups of buyers who are interested in the idea of cryptocurrencies in principle, but have so far rejected an investment due to the poor eco-balance.
Checklist for environmental friendliness
It is not possible to make a blanket statement, as the eco-idea is addressed in different ways by different cryptocurrencies. Varying protocols and specific features demand a questioning of basic characteristics:
Does the currency use renewable energy?
Are there waste-reducing or -avoiding measures?
Is the blockchain protocol sustainable?
“Eco-mining” often differs from traditional bitcoin mining. For example, some currencies use proof-of-stake rather than proof-of-work to verify transactions; many green cryptocurrencies are also designed to be ASIC-resistant, meaning they can be mined on home PCs or laptops. There are already a number of recommended sustainable tokens available today. The best eco-friendly cryptocurrency at the moment is arguably Cardano – ADA combines genuine engagement with exciting prospects and a resource-friendly algorithm.