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Eco-friendly cryptos to watch out for this year
Cryptocurrency mining currently consumes an alarming amount of fossil fuels. But it doesn’t have to. There are alternative, environmentally friendly cryptocurrencies already.
One of the main concerns people have regarding cryptocurrencies is their impact on the environment. In March 2021, for example, Elon Musk announced that his automobile company Tesla would begin to accept Bitcoin, the world’s largest and most popular cryptocurrency, for payments—only to revoke the decision just two months later. The reason cited for the change of plans was environmental concerns. Musk added that Tesla would accept Bitcoin again only if the crypto giant became more eco-friendly.
There are already many other cryptos that are eco-friendly, though, so environmentally aware investors can take heart. Popular Crypto exchange platforms such as CoinSwitch make buying such coins easy, so all you have to do now is to begin to look for them.
Why many cryptos are not eco-friendly
According to the Digiconomist’s Bitcoin Energy Consumption Index, mining bitcoins consumes more energy per year than countries like Malaysia or Sweden, with a single Bitcoin transaction requiring 1,544 kWh. And Bitcoin has a total of 21 million coins, 90% of which are already in circulation. So, if a single digital currency can consume so much energy, just imagine how much the crypto sector consumes in a year!
Needless to say, this mind-boggling consumption mostly comes from non-renewable sources.
The reason why they take up such a huge quantity of resources is that the basic idea of a digital coin is that it has no physical form. The process that makes it possible for them to exist without a physical form is called mining, and that’s what requires the huge processing power which is worrying to environmentalists. The mining process is very expensive—environmentally and otherwise— because it involves the use of:
- High-powered computers to verify transactions;
- Large amounts of electricity to run complex algorithms; and
- Non-renewable energy sources.
Five eco-friendly coins
Cryptocurrency mining currently consumes an alarming amount of fossil fuels. But it doesn’t have to. There are alternative, environmentally friendly cryptocurrencies already. Here’s introducing you to some of them.
The Stellar network was the result of the popular crypto Ripple’s fork. Released in 2014, Stellar is operated by the Stellar Development Foundation, a non-profit organization. You can invest in Stellar cryptocurrency from crypto exchange platforms like CoinSwitch, click here to check Stellar to INR .
- Stellar doesn’t charge institutions or individuals for using the network.
- It enables faster, easier, and more cost-effective cross-asset and cross-border transactions.
- You can exchange US dollars, Bitcoin, and any other fiat currency or cryptocurrency on the Stellar network.
- The Stellar Consensus Protocol is open-source and relies on authentication of transactions occurring through a set of trustworthy nodes.
- Stellar’s cycle for authentication is shorter and faster.
What makes it green?
- Stellar has a smaller carbon footprint because the network token Lumens makes trades for a fraction of a cent and with high efficiency.
- Since Stellar’s cycle for authentication is also shorter and faster than most others, it keeps costs low and energy use to a minimum.
Tron is a one-of-a-kind peer-to-peer (P2P) platform and public blockchain that enables users to share apps directly on its blockchain. Tron cryptocurrency is one of the most profitable cryptos to trade on exchanges.
- Tron is a non-profit organization and public blockchain supporting almost every programming language.
- Its governance is decentralized, with a two-tier model of Super Representatives (SR) and Super Representative Partners, and every account holder can apply to become an SR and vote for SRs.
What makes it green?
- The process of transferring apps on this P2P network consumes very little energy.
- TRON employs pre-mining, which is more eco-friendly to generate cryptocurrency.
Launched in 2020 by Ava Labs, Avalanche is a blockchain platform with smart contracts. It focuses on transaction speed, low costs, and environmental friendliness.
- Avalanche is compatible with Ethereum’s programming language (Solidity).
- Avalanche has an architecture that allows for the deployment of custom private or public blockchains as subnets. These subnets can handle around 4,500 transactions per second at a lower cost than Ethereum.
- Avalanche is scalable and decentralized, secure, and energy-efficient, making it popular among developers working on Decentralized Finance (DeFi) projects, Non-Fungible Tokens (NFTs), games, and so on.
What makes it green?
- Avalanche uses Proof-of-Stake (PoS) (a consensus mechanism to verify transactions), which reduces energy consumption and costs to maintain the platform.
- The Avalanche blockchain uses only 0.0005% of the energy Bitcoin’s blockchain requires, according to a report from the Crypto Carbon Ratings Institute.
Tezos is a decentralized open-source blockchain that can perform P2P transactions and act as a platform for smart contract deployment. Tezos was one of the first smart contract layer one blockchains to use PoS.
What makes it green?
- Tezos has a low carbon footprint. Tezos blockchain has increased its energy efficiency per transaction over the last few years. The electricity requirement per transaction was less than 30% lower in 2021 than in 2020.
- Tezos is an energy-efficient PoS blockchain, and that makes it consume less energy for maintenance.
- Tezos allows users to build DeFi apps, games, and NFTs on its network.
- It has an on-chain governance mechanism that allows the network to improve without the need for a hard fork.
- The blockchain is green, scalable, secure and self-upgradable.
- Because it is eco-friendly, developers and users can prioritize innovation without compromising sustainability.
Algorand is a decentralized network designed to solve the blockchain speed, security, and decentralization. It is a permissionless and open-source blockchain network that anyone can build on.
- Algorand platform’s great transaction speed and low transaction fees make the network accessible, scalable, and energy-efficient.
- The Algorand blockchain now has 10 billion ALGO, with distribution continuing until 2030.
What makes it green?
- The Algorand Foundation, which is behind the development of Algorand, is a non-profit organization. In 2021, they announced that its blockchain is fully carbon-neutral.
- The platform’s high transaction speed and low transaction fees make the energy-efficient and sustainable.
- Algorand was designed to not involve mining in order to create a carbon-negative network and improve sustainability.
Some still argue that the traditional banking system consumes as much energy as crypto mining, in the area of digital finance, and the debate regarding a crypto stance on the environment will always exist. But with the exponential growth of assets, the crypto space has come a significant way from being considered environmentally dangerous, even if there is more to do.
There are many eco-friendly options for environmentally conscious investors to consider, and if you are one such investor, CoinSwitch has much to offer. We bring you options like the aforementioned coins and tokens on our easy-to-use platform.
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