The Energy Debate: Are There Green Cryptocurrencies?

The energy crisis hasn’t hit the world yet, but it will. Especially as we grow closer and closer to the end of fossil fuels. This has led to much controversy in the cryptocurrency space, especially with coins like Bitcoin, which use quite a bit of water to process transactions.

The question is, are there green cryptocurrencies available, and if there are, will they rise to prominence as the world grows more desperate to conserve energy? Keep reading to learn more about the energy debate in crypto and whether or not there are green cryptocurrencies to save us.

What is the Energy Debate in Crypto?

Although there are so many good things about cryptocurrency, mainly returning power to the people, we would be idiots if we didn’t address the downsides. If you have been following our blog for a while, you know that criminals utilizing blockchain for scams is already a huge downside, but there is one we didn’t mention, and that is how much energy it takes to process and mine blockchain.

At the top of the list of problems is, sadly, our favorite Bitcoin. While we love Bitcoin, and everything that is stands for, it takes substantial energy to mine. Although mining is coming to an end in the next few years, the current proof-of-work consensus mechanism requires the energy of a country like Poland, on an annual basis, to run. This makes it extremely unsustainable long-term. Especially considering this is the energy usage of Bitcoin alone.

While many blockchains have switched to a more energy-efficient proof-of-stake consensus mechanism, this doesn’t solve all the problems because Bitcoin mining is still lucrative and still the chosen cryptocurrency of millions of users around the world. Basically, what we are saying is that although cryptocurrencies are working to become greener, it isn’t a cut-and-dry solution.

Making Cryptocurrency Greener

We aren’t the only ones concerned about the future of cryptocurrency, concurrently with the future of the planet. In fact, many blockchains, most notably Ethereum, have already swapped to more energy-efficient processes in order to preserve the future of the blockchain.

Additionally, many countries have begun to look into more renewable energy sources—which means blockchain also benefits—considering most miners are hooked up to national power grids. Basically, if the country where you mine Bitcoin (Argentina, for example)  invests in more renewable energy sources, the miner, as a default, benefits.

Therefore, even though Bitcoin does not plan to change from a proof of work consensus mechanism, we suspect it will grow greener with time, especially as more and more countries invest in renewable energy sources.

Plus, many mining pools have gone out of their way to use renewable energy whenever possible, with some utilizing waste energy that would otherwise be discarded by the power grid. While this doesn’t erase the environmental impact entirely, it does show that miners are aware and doing what they can to make a difference, even now.

Of course, another way to make a difference is to transact as little as possible on very energy costly blockchains like Bitcoin and to focus more on transacting on energy-efficient blockchains. In the section below are some of the more efficient blockchains to consider.

**We do want to mention that generative AI like ChatGPT uses far more energy than cryptocurrency for a single query. Anyone who tells you not to use crypto because of energy concerns should not be using AI. Full stop.

The Most Energy-Efficient Blockchains to Transact On

1. Ethereum

We talk about Ethereum a lot in this article, and that is because Ethereum is 99% more efficient than the average proof-of-work blockchain (Bitcoin), and it has a wide range of capabilities. While we will always use Bitcoin to some capacity, we also love Ethereum and think it is an awesome option for those looking to save the planet.

2. Algorand

Though we don’t talk much about Algorand, it is one of the most energy-efficient blockchains. This is because, unlike other blockchains which require the production of multiple blocks to confirm a transaction, Algorand uses just a single block. This is accomplished via the VRF (Verifiable Random Function), which randomly chooses a single block to be minted, thus lowering energy consumption tremendously.

3. Solana

As a major competitor to Ethereum, it should be no surprise to find Solana on this list. Solana can do almost everything Ethereum can do, and because it is on a proof-of-history consensus mechanism, it uses very little energy. Of course, users lose a little of the decentralization offered by Ethereum, but at least they are saving the planet with their transactions!

4. Cardano

Another Ethereum competitor, Cardano, has been rising up the ranks as a green cryptocurrency. Thanks to the Ouroboros protocol and proof-of-stake consensus mechanism, it is just as environmentally friendly as Ethereum. While it doesn’t quite yet hold as prominent a place in society, we do believe it will eventually hold its own against Solana and Ethereum, especially as the energy crisis grows more dire.

5. Hedera

The last token we want to mention is Hedera, which uses Hashgraph to validate transactions. Although this still costs some energy, Hedera takes things further than every other blockchain on this list, working with the Crypto Climate Accord to ensure that using Hedera is truly carbon negative. Because of these efforts, Hedera is actually the greenest cryptocurrency after Algorand, though it hasn’t quite reached the same levels of fame…yet. This is definitely a token to keep an eye on as things progress in the cryptocurrency space.

Overall, energy is a hot topic in the cryptocurrency space, especially seeing as Bitcoin utilizes so much fossil fuel to continue to run. Although things are changing in the cryptocurrency and energy spaces around the world, many worry it won’t happen fast enough to prevent permanent damage to the planet. Those who are concerned about their carbon footprint should do everything in their power to utilize energy-efficient cryptocurrencies like Ethereum, Algorand, and Hedera.