Lack of environmental credibility is a major issue with cryptocurrencies like bitcoin and Ethereum. According to the Cambridge Bitcoin Power Consumption Index, the annual electricity used to mine bitcoins could provide hot water for all the tea drunk in the UK for thirty years.
However, are there any eco-friendly NFTs options to consider?
How Does Cryptocurrency Harm the Planet?
Those concerned about the planet point to the massive amounts of computing power needed for bitcoin mining as the root of their concern.
During mining, we use:
- Supercomputers battle it out to authenticate financial transactions in exchange for cryptocurrency.
- Complex algorithms need massive amounts of energy.
- Coal is the dirtiest fossil fuel and is an example of a nonrenewable energy source.
Why Do NFTs Threaten the Environment and Hamper Ecological Balance?
NFTs, or non-fungible tokens, are digital tokens that may be used to prove ownership of intangible assets like digital artwork and virtual property through the blockchain. There is a significant energy cost associated with producing NFTs (non-fungible tokens), which are used almost exclusively on the Ethereum network.
Apparently, the emissions produced by the sale of a single piece of art on Ethereum are the same as those caused by flying for a whole hour. Continue reading this article to understand more about eco-friendly NFTs, which nfts fall in this category and which do not.
Are There Any Eco-Friendly NFTs?
More long-term plans are now in the works. The Ethereum Foundation predicts that when Ethereum 2.0 is finalized, it will significantly reduce energy consumption—by as much as 99.95%. However, it will really take up a long time before we make the change.
Why is Bitcoin So Environmentally Damaging?
According to the Bitcoin Electricity Consumption Index maintained by Cambridge University’s Centre for Alternative Finance, Bitcoin mining consumes more energy annually than either Malaysia or Sweden. Protesters argue that the situation is made worse by the fact that most mining occurs in China, a country that relies heavily on coal power.
Bitcoin prices have fluctuated wildly over the previous two years. After starting at about $6,500 in March 2020, its price reached a peak of $67,000 in November 2021 before suddenly losing half of its worth.
As of May 2022, the price of a bitcoin was about $31,000, continuing a downward trend that began in early 2022. There will be a corresponding increase in the use of fossil fuels if the price of bitcoin increases once again. The electric car manufacturer Tesla said in 2021 that it has invested $1.5 billion (£1.1 billion) in bitcoin. Elon Musk, the inventor of Tesla, initially said he would not sell his stake in bitcoin until a more environmentally friendly way to mine the cryptocurrency was developed.
How Bad is Dogecoin for the Environment?
The Texas-based data center company TRG Datacenters has analyzed and evaluated several cryptocurrencies based on the amount of energy needed to power each transaction.
Dogecoin’s transactional energy consumption was just 0.12kilowatt-hours (kWh) per hour, but bitcoin’s was a whopping 707kWh, putting it last on the chart. There are many who say it’s impossible to know the full extent of the damage done to the environment by this mining method because of how complicated it is.
Six Green Cryptos
Bitcoin “mining” requires an excessive quantity of fossil fuels, according to environmentalists. But there are green cryptos that are less harmful to the environment. These could calm nerves about blockchain technology and the environment.
While the volume of transactions may be lower with smaller currencies, this does not always mean that they have a smaller carbon footprint. There are, however, digital assets that need less energy to operate, hence having a smaller footprint. TRG Datacenters conducted studies on the energy efficiency of several cryptocurrencies and found the following to be the most resourceful:
XRP (0.0079 kWh).
Which digital money has the least impact on the environment? Six other cryptocurrencies to Bitcoin are outlined here.
According to TRG Datacenters, chia is sustainable currency crypto that has been created to use less power. Rather than using computer processors as bitcoin’s mining does, chia uses hard drives in its “farming” method, a notion called proof of space.
Important points about chia:
- Farming chia coins on a computer’s hard drive is a viable option, as is using spare storage space for “plots.”
- Once the program has been completely downloaded, it will automatically begin cultivating chia.
- Unlike mining cryptocurrency, which consumes enormous quantities of power, this method allows even those without such resources to cultivate chia at home.
- Some skeptics, however, maintain that chia isn’t as environmentally benign as it promises since it has caused a dramatic increase in the need for computer technology and an increasing amount of e-waste.
IOTA employs a mechanism called the “Tangle,” which eliminates the need for “miners.” It requires less power since it is kept running by less powerful devices.
Cardano’s Ouroboros proof-of-stake method distinguishes it from other cryptocurrencies. Users must pay for tokens before they can join the network, which results in huge energy savings.
Cardano’s most salient features:
- Charles Hoskinson, the creator of Ethereum and the second biggest cryptocurrency after bitcoin, claims that the network can process 1,000 transactions per second, whereas Bitcoin is limited to only seven.
- The team at Cardano claims that since Ouroboros is the first blockchain-based protocol to undergo peer review, it can be expanded to meet the needs of a global market without compromising on environmental friendliness or safety.
- Cardano, the fifth-largest cryptocurrency at the time of writing, is likely the most well-known of the green cryptos.
- As calculated by TRG Datacenters, its power consumption is 0.5479-kilowatt hours.
While nano wasn’t included in the energy consumption breakdowns, it was nonetheless a point of emphasis at TRG Datacenters.
The essentials of nano:
- The digital currency, like bitcoin, is based on a proof-of-work system, but it aims to minimize the energy consumption and material waste caused by crypto-to-crypto exchanges.
- A mechanism called Open Representative Voting is used to make the system more efficient and save on power consumption.
- Nano is free to trade, has rapid transfers, and is environmentally laudable.
Solar coins are a worldwide, decentralized, and sustainable money created to incentivize the generation of solar energy. With each megawatt-hour (MWh) of electricity generated with solar power, generators may get one penny.
The goal of launching this green cryptocurrency was to provide a sustainable alternative to bitcoin. Similar to solarcoin, it offers incentives for eco-friendly nft marketplace acts like buying fair-trade coffee, sharing rides, and giving back to the community. It may be spent at stores partnered with bit green or exchanged on exchanges.
There will soon be new environmentally friendly digital currencies.
New efforts are continually developing to enhance the cryptocurrency mining industry’s environmental credentials in the face of growing worries about the amount of energy required in the process. Among them include increasing the use of renewable energy sources, implementing more energy-efficient processes, and compensating for one’s carbon impact.
According to TRG Datacenters, the development of new, more environmentally friendly cryptocurrencies is expected, along with significant changes in the protocols governing the use of current monies. The business recognizes nano, IOTA, and chia as forerunners in eco-friendly nfts platforms because of their dedication to minimizing transactional carbon footprints.
To decarbonize the business and reach net-zero emissions from the power consumption connected with cryptocurrencies by 2030, more than 45 organizations and people in the crypto, banking, energy, and technology sectors have signed the Crypto Climate Accord.
All investment/financial opinions expressed by NFTMetaverse.news are not recommendations. This article is educational material. As always, make your own research prior to making any kind of investment.