Blockchain technology has been growing at an unprecedented rate, with the rise of cryptocurrencies like Bitcoin and Ethereum leading the charge. While the potential for blockchain to revolutionize the way we live and do business is exciting. It has also drawn attention to the environmental impact of the energy consumption required for cryptocurrency mining. With climate change becoming a pressing issue, it’s more important than ever to consider the environmental impact of our investments.
What Leads the Blockchain towards Eco-friendly?
The alarming environmental impact of bitcoin has been under examination in recent years. While efforts are being made to reduce this impact, some investors are abandoning bitcoin in favor of more environmentally friendly investments. This leads the path toward the discovery of the most environment-friendly blockchains.
Some cryptocurrencies are more energy efficient than bitcoin. Bitcoin relies on a Proof of Work system, which requires enormous calculations (and processing power) to create one token. Cryptocurrencies that use a Proof Of Stake system save much less energy.
However, the European Union and the United States are currently regulating digital assets, so the environmental impact of blockchains is vital. According to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin’s annual consumption is estimated at 137.2 TWh.
Blockchain Growing as the EcoFriendly and Sustainable Technology in 2023.
Going green is all the rage these days, and for a good reason. Many want to reduce our environmental footprint and be more mindful of how we use natural resources. The blockchain industry is quickly becoming one of the most eco-friendly and sustainable technologies of the 21st century. Web3 is leading the charge, offering a variety of eco-friendly and sustainable blockchains that reduce the environmental impact of the blockchain revolution.
Eco-friendly blockchain technology is becoming increasingly important for several reasons:
- Energy consumption: Blockchain technology, particularly proof-of-work (PoW) blockchains like Bitcoin, consume a large amount of energy. This has a negative impact on the environment and contributes to global carbon emissions. Eco-friendly blockchain technology aims to reduce energy consumption and make the use of blockchain more sustainable.
- Climate change: Climate change is a pressing global issue, and we must reduce our carbon footprint. Eco-friendly blockchain technology can lower blockchain energy consumption and make it a more sustainable technology.
- Decentralization: One of the critical advantages of blockchain technology is decentralization. However, this decentralization also results in increased energy consumption. Eco-friendly blockchain technology aims to preserve the decentralization of blockchain while reducing its energy consumption and environmental impact.
- Adoption: As more people become aware of the environmental impact of blockchain technology, the demand for eco-friendly blockchain solutions is likely to increase. This will drive innovation and lead to more sustainable blockchain solutions.
Overall, eco-friendly blockchain technology is essential because it helps reduce blockchain’s environmental impact and makes it more sustainable. This will help ensure that blockchain can grow and be adopted on a larger scale without hurting the environment.
What cryptocurrencies or blockchains are more sustainable than Bitcoin?
These are the top few contenders, presented in no particular order.
Ethereum is a decentralized, open-source blockchain with smart contract functionality, and ether is the native cryptocurrency of the platform. Ethereum was conceived in 2013 by programmer Vitalik Buterin. The Ethereum network began using a consensus mechanism involving proof-of-work (PoW). A significant criticism of proof-of-work is the energy output required to keep the Network safe. To maintain security and decentralization, Ethereum on proof-of-work consumed large amounts of energy. The energy consumption of Ethereum before the Merge upgrade in 2022 ranged from 46.31 terawatt hours (TWh) per year to 93.98 TWh per year.
On September 15, the Ethereum blockchain switched from proof-of-work (PoW) to proof-of-stake (PoS). This was a move to transition into a more sustainable and eco-friendly blockchain. After the merge, the consumption is around 2.601 MWh (0.0026 TWh).
XDC Network (XDC)
The first environment-friendly Blockchain Network is XDC Network. Given the public-private hybrid XinFin blockchain, XDC is a super-secure, completely decentralized, and hyper-fast cryptocurrency with more than 2000 transactions per second. The XDPoS consensus ensures that the minting of XDC coins and a stable decentralized Network consumes as much energy as a word processor. It can also be completed within seconds, making it a highly energy-efficient process.
Compared to other cryptocurrencies like Bitcoin and Ether, the energy consumption of XDC is almost negligible. The XDC coin only uses 0.000007446 TWh or just 7,446 kWh of electricity. Being an EVM-compatible Network, XDC welcomes Dapps to build on their Network. It offers environmentally friendly, cost-effective, and high-speed blockchain solutions for upcoming Dapps in Web3.
Developed by Charles Hoskinson, co-founder of Ethereum, Cardano has been viewed as the world’s first peer-reviewed blockchain by academics and scientists. This currency acts mainly as a digital coin but can also be used for digital contracts, DApps, and other purposes. Cardano can achieve 1000 transactions per second.
Cardano uses a Proof of Stake consensus mechanism to allow participants to buy tokens to join the Network. It means Cardano’s founder claims that it consumes only 6GWh of power.
Ripple is a network for real-time gross settlement, currency exchange, and remittances developed by the US-based technology company Ripple Labs Inc. The 2012-released Ripple platform enables tokens representing fiat currency, cryptocurrencies, commodities, or other value types. It is based on a distributed open-source protocol. With no chargebacks, Ripple claims to offer “secure, fast, and almost free worldwide financial transactions of any size.” The ledger makes use of the XRP coin, which is used locally. XRP coin uses 474,000 kWh of electricity.
Lastly, of all the ‘green’ coins in the market, XinFin XDC Network is the most sustainable option for consumers who have taken their eco-responsibilities seriously since 2018. So far, it’s the only cryptocurrency network that has designed an energy-efficient, eco-friendly consensus protocol to protect the environment but takes action to replenish the damage already done.
Overall, Web3 is setting an example for the rest of the industry by developing and providing some of the most innovative and eco-friendly blockchains of 2023. These blockchains offer a unique solution to reduce the environmental impact of blockchain technology while still delivering the same high-level performance. With continued innovation, there is no doubt that Web3 will continue to lead the charge on sustainability and make blockchain technology even more sustainable and reliable.