sustainable cryptocurrencies

Sustainable Cryptocurrencies: The Shift From Proof-of-Work to Proof-of-Stake

CryptoCryptocurrencies
Tags: Green cryptocurrencies, Proof-of-stake, Proof-of-work, Sustainable cryptocurrencies, Trilemma

More and more investors want to invest in so-called green cryptocurrencies, or sustainable cryptocurrencies that not only provide a return to the investor but also contribute to sustainability. Because sustainability is progressively permeating all industries and subject areas.

In the next essay, we will investigate if and to what degree cryptocurrencies are sustainable. We also provide a variety of sustainable cryptocurrencies. The ECOTERRA token is an example of a revolutionary digital asset that allows users to invest in and profit from blockchain technology.

Sustainable cryptocurrencies

Can we discover a common denominator between cryptocurrency and sustainability? The topic of whether cryptocurrencies encompass the environment and the issue of sustainability must be approached from several angles. In general, one may start with the negative element of the high power consumption that develops for bitcoin manufacturing and custody. Additional power hogs are shown by blockchain technology, since it necessitates a globally networked computer network in order for cryptocurrency transactions and operations such as mining Bitcoin and other cryptocurrencies to function.

These different operations, which need a high level of computer power, result in rather significant energy usage. Moreover, many mining-intensive nations are lacking in terms of sustainability and renewable energy. The aspects of bitcoin’s environment and electronic currency durability are mostly ignored here.

Yet, the cryptocurrency industry is evolving, and efforts are being made in many sectors to transition to sustainable cryptocurrencies and procedures, with younger cryptocurrencies in particular at the forefront of green cryptocurrency. These cryptocurrencies, which are more sustainable than their rivals, employ a mechanism known as proof-of-stake validation.

The POS mechanism utilizes substantially less energy than the proof-of-work technique employed by Bitcoin, for example. It is not feasible to make cryptocurrencies sustainable in all domains because, even if the PoS method uses less energy, all activities need a significant amount of energy. Still, it is a positive start in the right direction.

The Blockchain Trilemma

In summary, the blockchain trilemma asserts that the three blockchain qualities are always incompatible. Scalability, decentralization, and security are the three features.

The trilemma here refers to the reality that blockchains can only meet two of the three qualities specified.

This trilemma stems from the conflict that decentralization creates with the other two considerations, scalability and security. If, for example, scalability is improved, this is inevitably accompanied by a decrease in decentralization.

Are there any sustainable cryptocurrencies?

There are already sustainable cryptocurrencies on the market, as well as those that are on their way to becoming such. The most important sustainability element is the energy-efficient operation of these green coins. In contrast, less energy is needed for transactions, and green cryptocurrencies save a significant amount of energy in the long run. Above all, the PoS-based technique is employed here, which will be discussed in further depth in the next section.

Several considerations, in addition to switching from PoW to PoS, may make a cryptocurrency viable. Solarcoin, for example, has a “reward model,” in which users are compensated with asset coins for engaging in sustainable behaviors like solar energy production or the usage of automobile sharing services. This incentivizes users to act more sustainably and so obtain more coins, which increases the Solarcoin course and its sustainability.

Moreover, blockchains that have been converted to the PoS mechanism may function quicker, allowing for more transactions per second. In contrast, the Bitcoin network can only handle 7 transactions per second, whereas a more sustainable cryptocurrency can handle up to 50,000 transactions per second. As a result, the power consumption computed on transactions is substantially reduced, allowing the sustainable cryptocurrency to operate much more effectively.

In addition to being more efficient, green cryptocurrencies may use power generated by renewable sources, which not only reduces their energy consumption but also makes them more sustainable. If the particular cryptocurrency employs renewable energy to generate new blocks, it is also considered a green cryptocurrency. Other currencies, like Cardano (ADA), which can handle up to 1000 transactions per second, are also adopting similar techniques to make their money viable.

The shift from proof-of-stake to proof-of-work

The Proof-of-Work (PoW) approach is giving way to the more sustainable Proof-of-Stake (PoS) process. So what keeps cryptocurrencies that employ the PoS mechanism alive? First and foremost, we’d want to go through the proof-of-work approach. Bitcoin is a cryptocurrency that uses this approach. Since its beginning, Bitcoin miners have employed the PoW consensus process to verify network transactions.

Nevertheless, since substantial computer power is necessary to generate new blocks, this method consumes a lot of energy and takes longer than alternative processes. To be more specific, bitcoin mining requires roughly the same amount of energy as 22.8 million homes every year. The resultant CO2 emissions are likewise comparable, with Denmark emitting around 34.73 megatons of CO2 per year. As a result, the PoW technique is increasingly being labeled as ecologically hazardous.

But the crypto environment is changing, and there are more and more viable crypto currencies. In contrast to the previously described PoW approach, there are an increasing number of sustainable cryptocurrencies that employ the proof-of-stake method and are therefore labeled as sustainable cryptocurrencies. Green coins are often based on the PoS method. The Proof-of-Stake technique is thought to be substantially more current and efficient than the Proof-of-Work procedure.

The PoS technique is a notion that employs blockchain network consensus to determine who may generate the next block. A weighted random method is applied here, which determines who is picked depending on parameters such as the period of involvement and the players’ stake (wealth). As a result, this approach is substantially more effective since it works quicker and uses less energy.

The benefits and drawbacks of Proof of Stake (PoS)

 
Pros
Cons

What are the most sustainable cryptocurrencies?

There are currently several eco-friendly cryptocurrencies on the market that are called sustainable cryptocurrencies. This is dependent on the different aspects discussed in the previous section, such as employing the proof-of-stake process or other methods that are more ecologically friendly and sustainable than, say, the proof-of-work process.

We’d like to expose you to a few cryptocurrencies that are working towards a more sustainable future. These cryptocurrencies address issues such as cryptocurrency manufacturing, cryptocurrency energy usage, and even general electronic money issues.

Sustainable cryptocurrencies: Ecoterra

Ecoterra is a new eco-friendly crypto project that blends its own original coin, Ecoterra, with the Recycle2Earn idea. Individuals and businesses may earn Ecoterra tokens for each recycled unit and spend them on a variety of environmentally friendly activities. The project employs blockchain technology to build a Web3 environment for recycling and carbon offsetting.

Ecoterra has developed a game-changing incentive strategy to combat climate change and promote sustainability. Ecoterra contributes to a better future by bringing recycling and blockchain technology together. The ECOTERRA token is presently available for pre-sale for $0.01 per token, providing early investors with significant upside potential in the cryptocurrency market.

C+ batch

C+Charge is an innovative electric mobility charging system that pays drivers that utilize the network. It is a collaboration of key e-mobility manufacturers and operators, as well as its own network, all powered by bitcoin. C+Charge was created to stand out from other crypto payment systems by offering unique usefulness for a real-world use case.

Drivers will be rewarded with carbon credits for utilizing the C+Charge network, offering an incentive to participate in the EV revolution. With so many advantages and features, C+Charge is an excellent option for anybody seeking a dependable, satisfying, and environmentally responsible EV charging solution.

IMPT

IMPT token is a sustainable cryptocurrency that is now in the discounted pre-sale phase. It focuses on sustainability and environmental preservation, thus, the coin is following a trend that is now developing in all domains. Yet, there is a favorable IMPT projection in regard to the currency and the project.

A sustainable cryptocurrency based on blockchain technology is being established with the token website of the same name. This also encourages trade in the optional emissions market, which has a similarly bright future. IMPT seeks to make trading simpler for private persons in particular.

Ethereum

It is the second biggest and most well-known cryptocurrency, is proving to be one of the market’s key cryptocurrencies. Ethereum is evolving because mining will be moved from proof-of-work to proof-of-stake. With this, Ethereum aims to take a step toward a more sustainable cryptocurrency.

Computing capacity and energy usage may be lowered using the PoS approach. This move is especially intriguing given the coin’s magnitude, since if such a significant coin takes this step, it may serve as a model for other rivals in terms of green cryptocurrency, causing a rethink.

Polka dots

Polkadot, a sustainable cryptocurrency, also employs the PoS technique, or proof-of-stake, which consumes less energy than the proof-of-work approach. In the case of Polkadot, the blockchain functions as a “relay chain,” which implies that the resources now in use in the system are passed on to other new blockchain systems.

Polkadot thereby ends the energy cycle inside its own system and starts a new system within cryptocurrencies. The energy usage of cryptocurrencies may be adjusted and enhanced within particular chains.

Chia

Unlike other cryptocurrencies that operate sustainably, Chia takes a different strategy. The green cryptocurrency validates blockchain transactions by using the hard disk storage of presently used computers. As a result, no additional energy is needed to carry out Chia crypto transactions.

The green cryptocurrency Chia therefore fully utilizes the available resources, dramatically improving its cryptocurrency energy usage and thus increasing the value of the Chia share. Nonetheless, Chia is not a fully ecological cryptocurrency, since the creation of hard drives is not CO2-neutral. But, this strategy is also a solid starting point for a more sustainable crypto industry.

Sustainable cryptocurrencies: Cardano

Cardano is a cryptocurrency that functions purely scientifically on an open source blockchain, and it should also be usable as a payment method. Cryptocurrencies evironment and sustainability are not always readily compatible, but the green cryptocurrency works here with the proof-of-stake mechanism and is therefore included in the category of sustainable cryptocurrencies.

Cardano’s consensus algorithm utilizes much less power than equivalent procedures while manufacturing the coin.

Solarcoin

The Solarcoin exemplifies a method of rewarding consumers. Tokens of the sustainable cryptocurrency are distributed as a reward for utilizing solar energy, for example. Solarcoin is therefore one of the few cryptocurrencies that actively pursues the objective of making business and society more sustainable.

The coins are generated by incentives handed out to solar system operators rather than mining, as is the case with most other cryptocurrencies. Moreover, Solarcoin employs the PoS mechanism, which is more sustainable owing to decreased energy use. It should also be noted that Solarcoin is on its way to achieving a carbon-neutral balance sheet. The Solarcoin path is also on the correct road as a result of this sustainable strategy, and it is worth having a closer look at the green cryptocurrency.

IOTA

The sustainable cryptocurrency Iota is an exception to this rule. IOTA is based on tiny devices known as “Tangles” that act as network nodes. This process helps network transactions to execute more quickly and sustainably. Why IOTA qualifies as an ecological cryptocurrency.

IOTA is also planned to be used as a currency amongst Internet of Things (IoT) devices in the future. If this step is taken, sustainable cryptocurrency may develop significant impact and relevance. The green cryptocurrency is already on the right track.

Stellar

Stellar is a decentralized peer-to-peer payment network. It allows for rapid transactions at reduced costs. Since the platform’s concept is for users to rapidly and easily convert money into tokens. Additionally, these tokens may be exchanged among users on the site. Stellar is also in an excellent position on the market, with the Lumen (XLM) token being utilized here, and might continue to work its way up with the sustainable cryptocurrency.

Efficient operation helps the network to run and expand more quickly and effectively, lowering energy usage and making the Stellar currency more sustainable.

Flow

Flow is a blockchain-based decentralized ecosystem and platform with a variety of choices, such as scaling solutions for interactive experiences and, for example, blockchain-based games. It was created by the same team that created other famous Ethereum-based blockchain games. The sustainable cryptocurrency provides a fast and scalable blockchain that functions efficiently.

Future possibilities are also highly promising, since Flow is working on its own initiatives in the field of NFTs, where the market has been rising recently.

Avalanches

The linked Avalanche Token AVAX is utilized as a form of payment on the Avalanche Blockchain. The blockchain, in general, functions as an alternative smart contract platform and is especially useful for decentralized financial services. Since the Avalanche Blockchain allows exceptionally quick and affordable execution of Smart contracts, the sustainable coin consumes less energy and is one of the green cryptocurrencies.

Environmental stewardship

The environment and sustainable living are no longer overlooked in social media, radio, TV, or print media. Climate activists protest in support of our environment and a more sustainable way of living. Several multinational corporations are facing growing pressure, as well as a social duty, to adapt and adjust parts of their companies. This change does not just pass by the crypto scene. As seen in earlier sections, there are more and more sustainable cryptocurrencies that adapt and optimize variables such as cryptocurrency manufacturing or cryptocurrency energy use.

Cryptocurrencies are also extremely sustainable on a social level, which makes them appealing for investment. Because of their independence from banks, cryptocurrencies are available to everyone. This component is highlighted, particularly in America, to call attention to the equality of all groups of people.

Consequently, according to experts, some conventional banks regard themselves as being disadvantaged and hence seek an alternative in the form of cybercoins. Nevertheless, opponents consider this a bad element since minimal account verification might raise the percentage of crime in this industry.

Conclusion: Sustainable Cryptocurrencies

We’d like to conclude our post with a last thought. As mentioned in the preceding article, the subject of cryptocurrency sustainability is quite disputed. Cryptocurrencies, like Bitcoin, amplify this notion because of the enormous energy consumption of the proof-of-work mechanism. As previously said, there are more and more sustainable cryptocurrencies, often known as green cryptocurrencies.

The second generation of cryptocurrencies, in particular, employ more energy-efficient procedures and depend on sustainably produced power. The proof-of-stake technique employed in most new cryptocurrencies also has a substantially better energy balance. Nevertheless, very few cryptocurrencies have a genuine strategy for a sustainable future or corporate structure. But the few who choose such a route may become more intriguing in the future. Because the approach to sustainability and living a sustainable life does not end at any industry.

Overall, the prognosis indicates a more sustainable future in the crypto world, but additional developments will reveal how far this is viable in this category. A truly ecological coin will be tough to execute. Nonetheless, the sustainable cryptocurrencies we’ve demonstrated give an excellent starting point for investing sustainably in a cryptocurrency at the time. The Ecoterra prognosis is quite promising, so keep a watch on this currency, as well as the C+Charge token and the IMPT token.

Our recommendation:
Invest with Plus500

Broad asset selection in equities and options
Free and unlimited demo account
Advanced free-of-charge analytical trading tools
Global and regulated fintech platform
4.8+
4.8/5
✕

Check out our Chat GPT widget to enrich your knowledge about crypto!