Most blockchain networks are built on energy-efficient block-validating mechanisms and consume extremely low power
There is one thing that can be said about the future of the finances, which is that they are going to be decentralized and more energy efficient than the present mechanisms in use
Here we are listing out some of the most eco-friendly blockchain projects that are working toward decentralizing finances without leaving humongous carbon footprints
Blockchain technology is based on the concept of decentralizing financial transactions validated by completely anonymous and independent computers. Back in 2009, when Bitcoin was created by Satoshi Nakamoto, nobody ever thought that one day, it will challenge the hegemony of the US dollar. But today, Bitcoin is considered the gold standard of cryptocurrencies, a legal tender in some countries, and a legalized currency in many.
However, when it comes to power consumed in validation cryptocurrency transactions, Bitcoin tops the chart. With time, cryptocurrencies started consuming a sizeable amount of power and developers started working on more eco-friendly ones. Today, most blockchain networks are built on energy-efficient block-validating mechanisms and consume extremely low power even while transacting sizeable value.
Today, we are listing out some of the most eco-friendly blockchain projects that are working toward decentralizing finances without leaving humongous carbon footprints.
Chia network has been developed to solve the problems of high energy consumption in blockchain networks. Chia network uses proof-of-space and proof-of-time as validation mechanisms while allotting the computer storage to provide the node with the authority to validate the transaction.
Chia network allocates the space in the system of the validator as a plot in the process called farming. This substitute the high energy demanding puzzle solving in the proof-of-work validation mechanism. The blockchain favors the validators with higher plot storage and rewards them for validating the transactions. XCH, the native token of the Chia network, can be mined using cloud computing and Amazon web services.
Solana is the most energy-efficient proof-of-stake blockchain network in terms of energy consumed per transaction. Solana is designed to solve the scalability trilemma of the Ethereum mainnet and host decentralized applications. The effectiveness of this blockchain can be evaluated by the fact that it can process over 60,000 transactions per second, compared to the 7 transactions per second of Bitcoin.
Solana has also received a citation from the Crypto Carbon Ratings Institute (CCRI) for consuming the lowest energy of all the blockchain networks at a rate of 0.166 watt-hours per transaction. Since its arrival, Solana is considered at par with the Ethereum network, however, it is yet to match the popularity that ETH has earned over time.
Algorand is one of those blockchain projects that are actively working towards being carbon negative. Claiming to be the world’s most powerful and scalable blockchain network, Algorand consumes only 0.000008 kWh of energy per transaction.
Algorand has also partnered with ClimateTrade, a company that enables organizations to reduce their carbon footprints and achieve their sustainability goals. Algorand is a blockchain network and a crypto token that uses a proof-of-stake mechanism for validating transactions. The wide userbase and highly effective validating mechanism make it one of the most eco-friendly cryptocurrencies in the world.
Cryptocurrencies are the future of finance and to survive in a world that has a dire lack of energy resources, cryptos will have to adapt themselves. The good thing about cryptocurrencies is that they are completely open and anyone from around the world can contribute to making them more efficient in their operations.
The blockchain that we have discussed here is only a handful of the projects and tons of other blockchain use cases are also there, working towards reducing the carbon footprints of our finances.
There is one thing that can be said about the future of the finances, which is that they are going to be decentralized and more energy efficient than the present mechanisms in use. Cryptocurrencies and blockchain tech have the potential to make it possible and it is high time that we keep focusing more on building effective solutions.
To read more such interesting topics on cryptocurrencies, keep following CoinGabbar.