There’s a growing awareness about how mining for Bitcoins and other cryptocurrencies carries a high energy – and carbon – cost. So environmentally conscious investors might want to check out other, greener alternatives.
With more eco-oriented cryptocurrencies likely to keep appearing on the market, here are some of the leading ones so far:
Kicked off with a whitepaper published in December 2017, the Bitcoin Green project models its cryptocurrency after Bitcoin but uses proof-of-stake (PoS) instead of Bitcoin’s more energy-intensive proof-of-work (PoW) consensus protocol. “Bitcoin Green utilises an energy eﬃcient proof-of-stake algorithm, can be mined on any computer, and will never require specialised mining equipment,” the whitepaper states. “The Green Protocol oﬀers a simple solution to Bitcoin sustainability issues and provides a faster, more scalable blockchain that is better suited for daily transactional use.” The Bitcoin Green team estimates its token’s energy consumption is likely to be between 0.00006 and 0.0006 per cent of Bitcoin’s consumption.
Described as “The Linux of Blockchain”, Burstcoin was first released in August 2014. Instead of using PoW algorithms on ASICs, GPUs or even CPUs to generate new coins, Burst miners use a consensus algorithm called proof-of-capacity (PoC). “This algorithm allows for the usage of storage space instead of raw computational power as is being used in proof-of-work (PoW) systems and is responsible for making Burstcoin energy efﬁcient,” the Burstcoin whitepaper notes. According to the Burstcoin website, the blockchain is “hundreds of times more energy efficient than most cryptocurrencies” and consumes just 0.0024 kWh of electricity per transaction. That compares to Digiconomist’s latest estimate for Bitcoin’s per-transaction consumption of 448 kWh.
With a platform launch scheduled for the third quarter of 2019, ECO coin is set to use a PoS consensus algorithm that’s more energy efficient than PoW. However, the broader goal of ECO coin is to promote sustainable activities. “When you cut a tree and sell the wood, you will earn money,” the ECO coin whitepaper states. “When you plant a tree, you are creating value, but you won’t get paid. Ecological value is not well articulated in our economy. The ECO coin aims to fix this. It is a new cryptocurrency that positively rewards people with ECOs for their sustainable actions. It is also the first cryptocurrency to be backed by sustainable assets; every ECO coin is backed by one tree. As more ecological assets are added to the system, more ECO coins become available.”
The EnergyCoin Foundation was established in September 2016 with the goal of using blockchain to support projects for sustainability and climate action. The foundation’s EnergyCoin uses a PoS algorithm, and was actually launched earlier than the foundation (in 2014) with an initial supply of 110 million tokens. Every new blocked stake earns a fixed reward of five EnergyCoins. The EnergyCoin blockchain currently supports two token-based projects: one that records bicycle miles and one promoting crowdfunding for solar energy development. The foundation’s FAQ doesn’t provide links to a whitepaper or energy consumption details.
Launched in 2015, Nano is “a low-latency payment platform that requires minimal resources”, according to the cryptocurrency’s website. Like its previous iteration, RaiBlocks, Nano uses a directed acyclic graph (DAG) structure in which each user account has his or her own blockchain. “Each individual user provides the computational power for the verification of their own transactions, meaning [the] entire network is not required to update the overall ledger together in massive blocks,” Nano’s website states. According to another site, Is Nano green yet?, Nano uses 0.112 kWh per transaction.
Founded in 2014, the SolarCoin Foundation offers SolarCoins – “a reward token based on low carbon blockchain technology” – for free as a reward for solar energy producers: for every megawatt-hour of solar energy produced, the foundation provides one SolarCoin. “Think of SolarCoin like air-miles for solar electricity generation – only better, because one is not tied to one company to use SolarCoin,” the SolarCoin website says. “Using SolarCoin as the first energy-referenced currency can reduce solar financing cost within the solar industry and beyond.” The foundation has created a total of 97.5 billion SolarCoins to grant to energy producers through 2054. According to CoinCheckup, SolarCoin uses a PoS consensus protocol.