For better or for worse, cryptocurrency has been in the news extensively in recent years. We’ve seen it mentioned as a promising new type of digital money that doesn’t rely on a centralized authority to function. But we’ve also heard concerns over how energy-intensive some of them can be, and many express valid concerns over the environmental impact of Bitcoin, so what eco-friendly crypto to invest in?
Thankfully, there are many types of cryptocurrencies. And if you care about our carbon footprint and want an environmentally friendly option to invest in. Let’s talk about a few other coins that you should add to your list.
What Defines a “Green Cryptocurrency”?
It’s not always easy to calculate how “green” a particular coin is since so many factors come into play. And don’t forget that we need to look at individual coins on the same scale. A relatively obscure option would involve less energy consumption simply because not many people are using it.
The state of the crypto climate itself also contributes to the overall environmental friendliness of cryptocurrencies in general. When the value of Bitcoin or another high-profile currency crashes, fewer people will choose to mine them since it’s no longer profitable to do so, resulting in lower consumption.
However, one factor we can be sure about is Bitcoin’s inefficiency thanks to its reliance on “Proof of Work” verification, which involves a ton of processing power. Alternatives to Proof of Work, like Proof of Stake, consequently have an advantage here. But even then, there are other considerations to take into account, and not all proof of stake coins are as efficient as others.
What Are Some Energy Efficient Digital Currencies?
Those who have only heard of Bitcoin in the news would probably be surprised at how many digital currencies exist. The following is a list of viable investments that we believe have a strong case for being “greener” than most other options on the market.
BitGreen (BITG): what eco-friendly crypto to invest in
BITG is a community-created, non-profit organization specifically designed to address the notoriously energy inefficient nature of Bitcoin. Users earn BITG by performing eco-friendly actions in real life, from volunteering for relevant causes to choosing sustainable coffees. The currency also uses the Proof of Stake algorithm.
From the same creator of Ethereum comes Cardano, a peer-reviewed application of blockchain technology. ADA is well known for its high transaction speed, sometimes achieving up to a thousand per second.
Cardano also uses Proof of Stake verification and is far more scalable in speed than Bitcoin. The result is a coin that consumes only 6 GWh a year.
One of the few coins that one can mine through Amazon Web Services, Chia is a unique specimen in that you can “farm” it through your hard drive space. Instead of Proof-of-Work, the system relies on “Proof of Space.” You get tokens by allocating a certain amount of drive space over a period.
Chia is relatively accessible, as you don’t need a lot of energy or any specialized equipment. Most people can get started with just an uncommitted drive space.
Holo (HOT): what eco-friendly crypto to invest in
HOT allows its users to host their own blockchains. The popularity of Holo is rapidly growing, and many experts believe it will be a perfect entry point for new members of the crypto community to join in.
Ripple is technically not a cryptocurrency but rather a digital global payment system. Moving money across international borders is a cinch with XRP. Ripple proudly proclaims that it is one of the most carbon-neutral currencies out there, thanks to no reliance on Proof of Work.
And since 100 billion coins were available right on release, there’s no need to mine any. These coins are verified through a consensus model where each transaction must have the approval of several validators.
It’s worth noting that because Ripple is arguably not a cryptocurrency, the U.S. government is considering giving it different regulations.
SolarCoin is a unique entry in this list. It functions similarly to other coins but actually helps incentivize solar energy production as an alternative to fossil fuels in real life. Users upload documentation proving they’ve generated a certain amount of solar energy in real life and can exchange that figure for 1 SLR for every Megawatt hour.
Stellar (XLM): What eco-friendly crypto to invest in?
Stellar’s intended purpose was to fill in the gap between “traditional” currencies and digital ones. There aren’t any fees for using the network, and making transactions across international borders is relatively inexpensive. These benefits incentivize users to use it like PayPal in some regard.
XLM’s tokens are known as Lumens, and the authentication cycle they use is notably shorter and faster than that of other coins. Stellar truly has a lower energy cost as a result.
Where To Buy Eco-Friendly Cryptocurrencies
See one that you like? Thanks to Coinmotion, it is now easier than ever to start with cryptocurrency and keep your carbon footprint in check. Check out our retail platform to buy eco-friendly options like Ripple and Stellar. You can even consult with Coinmotion Wealth OTC trades to unlock access to hundreds of other tokens from Chia to Cardano.
The following piece does not include any investment advice. It is worth noting that investing in any digital asset includes risks, which should be carefully assessed before making important decisions.
The views presented in the piece are the author’s own views and do not represent Coinmotion’s opinions.