cointelegraph.com
In 2022, as more and more industrial companies focus on sustainable development to reduce carbon emissions, green cryptocurrency projects continue to rise. A number of underlying forces are driving the paradigm shift, including user demand for faster and more energy-efficient blockchains, growing investor awareness of climate change, and growing government concerns about energy consumption in the cryptocurrency industry.
One of the most notable green crypto developments in 2022 is the transition of the Ethereum blockchain from Proof of Work (PoW) to a Proof of Stake (PoS) consensus layer. The merger was completed in September, joining ethereum's original execution layer and a new PoS consensus layer, the beacon chain. It allows the use of Ether Stack (ETH) to secure the network, eliminating the need for energy-intensive mining. The switch instantly reduced the power consumption of the Ethereum network by 99.9%. Ethereum's position as a leader in programmable blockchain marks an industry-wide step towards low-carbon solutions.
Mohammed Al Kaf Al Hashimi, co-founder of an Islamic digital currency, spoke to Cointelegraph about how the industry is changing to meet new demands.
"In 2022, green projects follow three main trends: the first is to reduce energy consumption and emissions, such as Ethereum, which reduces consumption by 99.9%, and Polygon, which is considered carbon neutral of carbon The second is ReFi — a new trend of regenerative finance that experiments with financial incentives to draw down carbon emissions.”
AlHashmi mentioned that his network had adopted a new emission-reduction model to achieve its eco-friendly objectives: “In the case of Haqq [the blockchain that issues Islamic Coin], the protocol automatically deposits 10% of the issued amount into a special Evergreen DAO, a nonprofit virtual foundation focused on long-term sustainability and community impact.”
Dimitry Mihaylov, chief scientific officer at blockchain gaming metaverse Farcana, told Cointelegraph that lowering emissions and on-chain transaction costs was good for the industry in the long term, as it would attract users, investors, and governments.
“Today, a regular banking transaction consumes an order of magnitude less electricity than a blockchain-based transaction, but we are betting on the development of more energy-efficient mining equipment and faster blockchain protocols. If successful, ‘green’ crypto projects are likely to receive strong support from both governments and potential users.”
That said, 2022 saw the rise of some unique, innovative, eco-friendly cryptocurrency projects contributing to a greener world.
Chia Network
Chia Network takes a unique approach to lower carbon emissions by using a proof-of-space-and-time protocol that differs greatly from early energy-intensive crypto-mining mechanisms that require powerful GPUs and processors. The network performs efficient transaction validations, also known as farming, and allocates users’ empty computer storage space into plots.
The process works through a decentralized network of nodes that act as clients and servers and communicate with their peers. Low processing power requirements allow anyone with a computer with good specs to grow Chia chips (XCH).
The network relies on farmers to provide storage space, and then allocates mining rights to each miner based on a randomly generated number assigned to each space. Deposits whose deposit numbers closely match those generated by the network earn mining rights.
This mathematical formula rewards more random numbers to be assigned to farmers who accumulate more, creating more chances to win.
XCH can be farmed using a variety of infrastructures, including cloud computing and data storage platforms such as Amazon Web Services. Use cases for the Chia network include support for decentralized financial projects, asset tokenization platforms, and decentralized exchanges.
In terms of energy, the Chia Network claims to use about 0.12% of the Bitcoin network's annual energy. Although the concept is brilliant, it has its drawbacks. Demand for hard drives and solid state drives has increased in countries like China, as XCH mining consumes drives in up to 40 days.
Despite this disadvantage, the Web has provided revenue opportunities for manufacturers of data storage devices with unused space and for companies with worn but functional data storage devices that are no longer in active use.
Algorand
The Algorand blockchain network is built with a focus on the environment and has made great strides to become carbon negative over the past two years.
In 2021, Algorand partnered with ClimateTrade, a company that uses blockchain technology to help companies offset their carbon footprint, allowing them to track their emissions to meet broad sustainability goals.
The partnership allowed a portion of Algorand's transaction fees to be set aside to purchase carbon credits needed to offset the network's carbon footprint. Algorand is a proof-of-stake blockchain, which makes it more energy efficient than Bitcoin's (BTC) proof-of-work consensus mechanism.
For perspective, one Bitcoin transaction consumes about 1206.52 kilowatt-hours of electricity, while Algorand claims that one transaction only consumes about 0.000008 kWh of energy.
Solana
Solana is a blockchain platform designed to host decentralized applications. It uses the PoS consensus mechanism to confirm transactions and embodies the principles behind the creation of green tokens. The platform can theoretically process more than 60,000 transactions per second. This includes the Bitcoin network, which processes seven transactions per second.
On-chain transactions are settled using SOL (SOL), the platform's native cryptocurrency. Since its inception, the network has been striving to achieve carbon neutrality, and it first reached the milestone in 2021 by joining the carbon offset program.
Solana received a favorable carbon rating from the Crypto Carbon Ratings Institute (CCRI) earlier this year for consuming the least amount of energy at 0.166 watt hours per event.
While many blockchain networks use the energy-efficient PoS consensus mechanism, Solana's efficiency is enhanced by another new mechanism called Proof of History (PoH). With PoH, a timestamp creates a historical record that proves an event occurred at a specific time. With a smart and revolutionary solution, the network can focus on validating current events without having to refer to past time requirements of nodes.
This allows consistency because nodes must follow the order specified by the events. The process allows the protocol to be fast and energy efficient.
Avalanche
Avalanche is a blockchain platform that aims to solve the blockchain trinity of scalability, efficiency and security using its unique consensus mechanism. The platform uses the original AVAX token (AVAX) to facilitate transactions and share system benefits.
Avalanche was recognized as one of the most energy-efficient chains in 2022. According to a CCRI study, Avalanche's public blockchain consumed about 0.0005% of the energy used by the Bitcoin network, which is quite impressive.
These and other high efficiency features have made the Avalanche the most environmentally friendly platform.
The Future of Eco-Friendly Cryptocurrency Projects
Eco-Friendly Cryptocurrency Projects are here to stay. They are designed to be more environmentally friendly and are becoming increasingly popular among users due to their scaling capabilities and lower gas bills.
The benefits they offer are likely to lead to the development of greener blockchains while encouraging improvements to existing ones. However, the year 2022 will be the dawn of a new era when green crypto projects will become more common.
Read More : The Next 1000x Crypto
Source: cointelegraph
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