So, which cryptocurrencies have a shot at being more sustainable than Bitcoin? Here are a few of the main contenders, in no particular order, presented with the caveat that this is absolutely not investment advice. As of March 31 st, 2021, Digiconomist estimates Ethereum as using more than 31 TWh annually, an all-time high. As the price of Ethereum has once again risen in 2021, so too has the energy consumption associated with the cryptocurrency.
In November 2018, for instance, the Digiconomist estimates that Ethereum’s miners more than halved their energy consumption (from around 20 TWh to 10 TWh) in under 20 days because the price tanked. In numerous cases, market slides or crashes that drop the price of Bitcoin, Ethereum, or other big players in this area lead to miners slowing down or turning off their devices as it’s no longer profitable to run the machines at that price. Market dynamics also play a big role in the energy consumption of cryptocurrencies. Δ As Bitcoin rises in value, the climate suffers Interestingly, Bitcoin uses an algorithm that does allow for mining ASIC-based devices, and these devices are considerably more energy efficient than conventional graphic processing units (GPUs). A good example of this is RavenCoin which, by one calculation, accounts for 4.32% of the total rated power of the top 20 cryptocurrencies but has a market capitalization of just 0.06%. This is primarily because these currencies use ASIC-resistant algorithms that consume significantly more energy than should be expected relative to how much of the cryptocurrency market they represent. Cryptocurrencies that instead use a ‘Proof of Storage’ or ‘Proof of Stake’ system use far less energy, as do currencies using a technology called block lattice, which doesn’t require mining.Įven among ‘Proof of Work’ cryptocurrencies, however, some are more energy intensive than others. Why? Because Bitcoin relies on a ‘Proof of Work’ system that involves huge amounts of calculations (and, thus, processing power) to produce a single token. That said, some cryptocurrencies are inherently more energy efficient than Bitcoin. Scale them up, however, and they may be just as bad, if not worse than the cryptocurrency we currently love to hate. Many much smaller cryptocurrencies, for instance, naturally have a far lower energy footprint because they involve far fewer daily transactions compared to Bitcoin. This is because there are so many parameters at play. Truth be told, it’s incredibly difficult to point to any one currency as being ‘greener’ than others. Are you a Dogecoin fan? See why everyone’s favorite canine-inspired cryptocurrency didn’t make this list here. Keep the suggestions coming, ideally with solid leads/info on why a token deserves attention from investors who care about sustainability, and I’ll do my best to take a look.
We’ve also written recently about the push for greater sustainability in the NFT community. UPDATE: Following the immense interest in this topic and great leads on other green cryptocurrencies, I’ve added even more tokens/networks below for our 2022 list.
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