This year, the cryptocurrency industry has moved towards greener, more energy efficient blockchains. However, 2022 has seen the rise of some unique and innovative altcoin projects contributing to a greener world. A number of fundamental forces have driven the paradigm shift, including user demands for faster and more energy efficient blockchains, growing climate change awareness among investors, and growing government concerns about energy consumption in the crypto sector. Here are 5 eco-friendly altcoins that are expected to explode in 2023, according to analysts.
The first eco-friendly altcoin on the list: Ethereum (ETH)
The biggest of the major eco-friendly crypto developments in 2022 has been the transition of the Ethereum blockchain from proof-of-work (PoW) to proof-of-stake (PoS). Completed in September, Merge joins Ethereum’s original execution layer with the new PoS consensus layer, the Beacon Chain. It did, however, secure the network, eliminating the need for energy-intensive mining. The conversion reduced the energy consumption of the Ethereum network by 99.9%. Ethereum’s position as a programmable blockchain marked the move towards industry-wide low-carbon solutions.
Chia Network (XCH)
Chia Network, as we have also reported as Kriptokoin.com, takes a unique approach to reducing carbon emissions. The network performs efficient transaction verifications, also known as farming. It also allocates users free computer storage to graphics. The process runs through a decentralized network of nodes that act as clients and servers connecting to their peers. Low processing power requirements allow anyone to farm Chia (XCH) tokens. However, it provides mining privileges to each miner based on randomly generated numbers assigned to each domain.
This algorithmic formula rewards the farmers with the most landfill for more allocation of random numbers, creating more chances to win. XCH can be built using a variety of infrastructures, including cloud computing and data storage platforms such as Amazon Web Services. Additionally, XCH claims to use about 0.12% of the annual energy used by the Bitcoin network. The network offered monetization opportunities for data storage providers with unused space and for companies with decrepit but operational data storage hardware that is no longer in active use.
Algorand (ALGO)
The Algorand blockchain network is built with an environmental focus. However, in the last two years it has made great strides towards becoming carbon negative. In 2021, Algorand partnered with ClimateTrade, which uses blockchain technology to help businesses offset their carbon footprint. However, the partnership enabled some of Algorand’s transaction fees to be set aside to purchase the necessary carbon credits needed to offset the network’s carbon footprint.
Algorand is a proof-of-stake blockchain. That is, it works more energy efficient than proof-of-work consensus mechanism. Bitcoin transaction consumes approximately 1,206.52 kilowatt-hours of electricity. Algorand claims that a process consumes only about 0.000008 kWh of energy.
Another eco-friendly altcoin on the list: Solana (SOL)
Solana is a blockchain platform designed to host decentralized applications. It uses the PoS consensus mechanism to validate transactions. It also embodies the principles of green token generation. The platform theoretically processes more than 60,000 transactions per second. This dwarfs the Bitcoin network, which processes seven transactions per second. On-chain transactions are resolved using SOL, the platform’s native altcoin project. Since its inception, the network has been working towards achieving carbon neutrality. It also reached an important milestone by joining a carbon offset program for the first time in 2021.
Many blockchain networks use the energy-efficient PoS consensus mechanism. Solana’s efficiency is boosted by another new mechanism called proof of history (PoH). PoH creates a historical record to prove that an event occurred at a particular time. Thus, it allows the network to focus on validating current transactions without having to resort to temporal temporal requests from nodes. This ensures consistency as nodes must follow the set transaction order. The process ensures that the protocol is fast and energy efficient.
Last eco-friendly altcoin on the list: Avalanche (AVAX)
Avalanche uses the unique proof-of-stake consensus mechanism. Thus, it is a blockchain platform that aims to address the triad of scalability, efficiency and security. The platform uses AVAX tokens to facilitate transactions and distribute system rewards. Experts cited Avalanche as one of the most energy efficient chains of 2022.
Also, its public blockchain consumed about 0.0005% of the amount of energy used by the Bitcoin network. This data is quite impressive. Moreover, all these features have made Avalanche the platform of choice for projects with environmental concerns.
