Green crytpo future can be a viable option to park your funds other than traditional gold investment.
Green crypto: By now anyone who has read a bit about cryptocurrency, understands or knows that mining any crypto (like bitcoin) consumes a lot of energy. Today the energy consumption per year for Bitcoin mining has exceeded the energy consumption for countries like Malaysia,Sweden,Finland or Belgium as per Cambridge Bitcoin Electricity Consumption Index. With mainstream investors increasingly including crypto in portfolios as an inflation hedge, this will require enormous quantities of electricity. With Asset Managers like Fidelity using crypto to create exchange traded funds, the party is just getting started.
With a growing number of sensible investors placing more value on companies that emphasize environmental, social and governance principles (ESG) – especially the environmental part – makers of cryptocurrency now have to find a solution to making crypto green or eco-friendly!!
So can green crypto become a reality?
With increased pressure from cypto enthusiasts like Elon Musk or being banned by countries like China, has forced the crypto industry to go green. Therefore new and existing blockchain projects are now shifting to less energy-intensive validation systems and exploring renewable energy-based mining. In 2021 a coalition of 200-odd crypto entities joined forces with the Rocky Mountain Institute, a Colorado-based environmental lobby, to create a Crypto Climate Accord. According to the accord, signatories have agreed to gradually minimize the carbon emissions from electricity to net zero by 2030.
Embracing this, new digital assets like cardano or solana have moved away from high energy consuming “proof of work” process to less energy consuming “proof of stake” process. Assets like Chia, have adopted a “proof of space and time” algorithm which cuts energy usage. Taken together, these moves signify that industry and the likes of famous coins like ethereum will move from PoW to PoS in the coming months. Some other coins adopting “green” way are: IOTA, Nano, Solarcoin, Bitgreen etc.
However one problem that needs to be tackled, is the lack of transparency and data which make it extremely difficult to gauge and validate one currency being ‘greener’ than others.
In the near future, we expect to see the creation of new, more sustainable, eco-friendly cryptocurrencies, as well as big changes in the practices of existing currencies. To stay updated, vist our social profiles to get more updates or enroll in our courses to refresh your knowledge!