What is Green Blockchain and why are they important?
Blockchain technology has grown at an unprecedented rate, with the rise of cryptocurrencies such as Bitcoin and Ethereum leading the way. 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 an urgent issue, it is more important than ever to consider the environmental impact of our investments.
What drives Blockchain towards environmental friendliness?
The alarming environmental impact of bitcoin has been under scrutiny 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 way towards the discovery of the most environmentally friendly blockchains.
Some cryptocurrencies are more energy efficient than bitcoin. Bitcoin relies on a Proof of Work system, which requires massive calculations (and processing power) to create one token. Cryptocurrencies that use a Proof Of Stake system save much less energy.
However, the EU and US currently regulate digital assets, so the environmental impact of blockchains is crucial. According to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin’s annual consumption is estimated at 137.2 TWh.
Blockchain is growing as the environmentally friendly and sustainable technology in 2023.
Going green is all the rage these days, and for good reason. Many people want to reduce our environmental footprint and be more aware of how we use natural resources. The blockchain industry is quickly becoming one of the most environmentally friendly and sustainable technologies of the 21st century. Web3 is leading the way, offering a range of environmentally friendly and sustainable blockchains that reduce the environmental impact of the blockchain revolution.
Environmentally friendly blockchain technology is becoming increasingly important for several reasons:
- Energy consumption: Blockchain technology, especially proof-of-work (PoW) blockchains like Bitcoin, uses large amounts of energy. This has a negative impact on the environment and contributes to global carbon emissions. Environmentally friendly blockchain technology aims to reduce energy consumption and make the use of blockchain more sustainable.
- Climate changes: Climate change is an urgent global problem and we must reduce our carbon footprint. Environmentally friendly blockchain technology can lower the blockchain’s energy consumption and make it a more sustainable technology.
- Decentralization: One of the critical benefits of blockchain technology is decentralization. However, this decentralization also results in increased energy consumption. Environmentally friendly blockchain technology aims to preserve the decentralization of blockchain while reducing energy consumption and environmental impact.
- Adoption: As more people become aware of the environmental impact of blockchain technology, the demand for environmentally friendly blockchain solutions is likely to increase. This will drive innovation and lead to more sustainable blockchain solutions.
Overall, environmentally friendly blockchain technology is important 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 harming the environment.
Which cryptocurrencies or blockchains are more sustainable than Bitcoin?
These are the top contenders, presented in no particular order.
Ethereum (ETH)
Ethereum is an open source decentralized 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 production required to keep the network secure. 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 transition to a more sustainable and environmentally friendly blockchain. After the merger, consumption is around 2.601 MWh (0.0026 TWh).
XDC Network (XDC)
The first environmentally friendly Blockchain Network is the XDC Network. Given the public-private hybrid XinFin blockchain, XDC is a super-secure, fully decentralized and hyper-fast cryptocurrency with more than 2,000 transactions per second. XDPoS consensus ensures that minting XDC coins and a stable decentralized network consumes as much energy as a word processor. It can also be completed in seconds, making it a very energy efficient process.
Compared to other cryptocurrencies such as Bitcoin and Ether, the energy consumption of XDC is almost negligible. The XDC coin uses only 0.000007446 TWh or only 7,446 kWh of electricity. As an EVM compliant network, XDC welcomes Dapps to build on their network. It offers eco-friendly, cost-effective and high-speed blockchain solutions for upcoming Dapps in Web3.
Cardano ADA
Developed by Charles Hoskinson, co-founder of Ethereum, Cardano has been regarded as the world’s first peer-reviewed blockchain by academics and researchers. This currency mainly functions 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 purchase tokens to join the network. That means Cardano’s founder claims it only uses 6GWh of electricity.
Ripple (XRP)
Ripple is a real-time gross settlement, currency exchange and remittance network developed by US-based technology company Ripple Labs Inc. Released in 2012, the Ripple platform enables tokens representing fiat currency, cryptocurrencies, commodities or other types of value. It is based on a distributed open source protocol. With no chargebacks, Ripple claims to offer “secure, fast and nearly free worldwide financial transactions of all sizes.” The ledger uses the XRP coin, which is used locally. XRP coins use 474,000 kWh of electricity.
Finally, of all the “green” coins on the market, the XinFin XDC Network is the most sustainable option for consumers who have taken their environmental responsibility seriously since 2018. So far, it is the only cryptocurrency network that has designed an energy-efficient, environmentally friendly consensus protocol to protect the environment, but take action to replenish the damage already done.
Overall, Web3 is setting an example for the rest of the industry by developing and offering some of the most innovative and environmentally friendly blockchains in 2023. These blockchains offer a unique solution to reduce the environmental impact of blockchain technology while 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.
