Mining cryptocurrencies is one of the most famous for having a passive income for most people. However, not all investors have the same goals regarding how much they want to earn and how long it should take to complete their objectives. One thing is for sure: the process of mining requires investors to use expensive computational power that usually consumes too much energy. It has been estimated that Bitcoin miners have emitted almost 200 million tonnes of carbon dioxide throughout its history.
Although the Bitcoin price can fluctuate due to media coverage and supply and demand, the amount of energy required for miners to receive any incentives is increasing rapidly. While some of the most known cryptocurrencies have worked towards a more sustainable approach to mining, others were freshly released as green cryptocurrencies that rely on renewable energy to provide miners with the same outcome. Therefore, let’s see what sustainable alternatives there are to mining cryptocurrencies.
Navigate through the article:
Chia (XCH)
Chia is one of the recent innovations in cryptocurrency. The blockchain was founded in 2017, defining its technology to be the first “enterprise-grade digital money”. Chia uses a Nakamoto consensus algorithm that works on a Proof of Space and Time mechanism, and its programming language is called Chialisp.
The most exciting thing about Chia is how it works. Its consensus mechanism removes the energy demands of POW, which has become one of the slowest and least efficient blockchain technologies compared to others. At Chia, developers aimed to change the mining strategy and create a “farming” approach that relies only on empty hard disk space, which almost anyone has on their devices.
Besides the sustainability features, Chia is also among the safest cryptocurrencies to invest in out there. That’s because its business model focuses on lower volatility and adoption increase. Farming Chia requires very little network bandwidth, and once downloaded into your device, your computer will farm on your behalf, and Chia’s software will automatically track rewards.
Cardano (ADA)
Cardano closely follows Ethereum’s model by providing so much more than just a tradeable cryptocurrency. This POS blockchain platform allows you to develop, govern or operate the network and contribute to a “global change”. Cardano is believed to be the most sustainable blockchain, using the Ouroboros protocol that is highly scalable and secure.
Cardano’s purposes included the following concepts:
- Technological advancements provided by mechanisms created from scratch;
- Peer-reviewed research led by academics in diverse areas;
- Opportunity for developing security, privacy and sustainability;
Cardano’s digital currency is named after Ada Lovelace, who was the first computer programmer. ADA can be used as a secure exchange of value, which is later permanently and securely recorded on the blockchain. It is advisable to store ADA in a hot or cold wallet in addition to the wallets provided by the Cardano ecosystem.
Nano (NANO)
Nano is a cryptocurrency made for everyone. It has been created to facilitate both local and international payments and can be characterized by three aspects:
- Zero fees for any kind of transaction;
- An eco-friendly mechanism that doesn’t rely on mining, printing or minting;
- Instant payment, whenever the transaction is made to;
Nano’s use cases include plenty of real-life situations, such as:
- Microtransactions
- Foreign exchange
- Online and in-store payments
- Banking
- Remittances
Nano’s efficient consensus mechanism, called Open Representative Voting (ORV), helps remove on-chain incentives and avoid the competitiveness of other networks regarding energy consumption. Therefore, Nano handles low-cost transactions since users are rewarded with external incentives.
For beginners, there are a few ways to test Nano for free. For example, they could get small payouts after entering their nano address, which is called the faucet method. Or, they can earn free tokens from other community members that distribute small payments to those who complete small tasks, such as watching advertisements.
Stellar Lumens (XLM)
Stellar Lumens is a unique technology. Although it was created to support digital representations of other cryptocurrencies, it also has its native token. The blockchain requires that all accounts hold a small number of lumens constantly to keep the network widely accessible and safe at the same time. Stellar’s system requires that a person’s minimum balance is 1 lumen, with the minimum fee for transactions of 0.00001 lumens.
Regarding sustainability, Stellar Lumens has integrated it into its system. The low-energy consensus mechanism called Proof-of Agreement and Efficient Stellar Consensus Protocol allows the blockchain to consume no more than 0.173¹ watts per transaction while generating 0.062¹ of carbon dioxide per transaction. Moreover, it’s easy to see how Stellar has developed in the past years since the greenhouse gas emissions resulting from its transactions have decreased each year. The blockchain’s commitment to constantly improve and change is making Stellar Lumens one of the best green cryptocurrencies.
Algorand (ALGO)
Finally, Algorand represents an institutional-grade blockchain infrastructure that is offsetting its small carbon footprint in partnership with one of the biggest blockchain-based climate businesses, ClimateTrade. The Algorand ecosystem allows investors and developers to build DeFi applications globally and use smart contracts and dApps by choosing their favorite programming language, making Algorand unique on the market.
This cryptocurrency managed to be carbon neutral by:
- Being a highly energy-efficient network;
- Partnering with businesses focused on sustainability;
- Offsetting small emissions gaps in the network;
Algorand is one of the few cryptocurrencies that collaborates with other sustainability-focused businesses in order to develop. Besides ClimateTrade, Algorand has also partnered with Global Carbon Holding, which tokenizes Carbon Credit assets, and PlanetWatch, which has deployed a low-cost global network for data validation, filtering and displaying.
At the same time, Algorand is also one of the most transparent blockchain technologies, committing to participate in consensus and assist in securing the network, provide incentives to contributors and assist in the development of the financial ecosystem.
Wrapping up
Cryptocurrencies had a fast development which has unfortunately got to affect the environment in a negative way. However, being aware of their impact, some cryptocurrencies have changed their consensus mechanisms, such as Ethereum, while others have simply started by being green and pro-sustainability.
