Cryptocurrencies are part of a new world for companies and are actively involved in increasing online security. Many people now are familiar with what cryptocurrencies are and how they work, but what far fewer people are aware of are green cryptocurrencies.
In the age of daily evolution, digital is always at the forefront. Companies continually seek alternatives and improvements in their systems, wanting to make the most out of the benefits on offer – and that’s why cryptocurrencies and especially green cryptocurrencies are rising in popularity.
Cryptocurrencies are digital assets that use cryptographic encryption to ensure the security of transactions is maintained. They have significantly impacted many industries, and particularly ones like gambling, where online transactions need to flow seamlessly and with maximum security.
A great number of online casinos now have implemented cryptocurrency as a payment option, allowing patrons to opt for secure and anonymous transactions. Cryptocurrency is appealing for many reasons, and players have been quick to adopt this new approach – meaning that you can make the most of cryptocurrency while enjoying real money online casinos in Canada, the US, or another part of the world. Players can make deposits and withdrawals with cryptocurrencies without providing personal information or bank details, increasing their confidence and their desire to play!
Cryptocurrencies do have tons of advantages, but there are some drawbacks too – and one is that many consume enormous amounts of energy due to the levels of computation required. In order to improve the industry’s impact on the environment, cryptocurrencies that support sustainability have been created.
What are green cryptocurrencies?
Alternative models with a lower environmental impact have been developed to minimize the carbon footprint associated with digital currencies. Green cryptocurrencies were designed to be more environmentally friendly, using less energy to mine and process transactions, thus reducing their carbon footprint.
For green cryptocurrencies to be equally effective, achieving an efficient cryptographic mechanism and analyzing and inspecting their process of creating and maintaining blocks of information is essential. Almost all digital currencies are produced through “mining.” This process is the one that the new green version wants to rethink to reduce its energy consumption.
To get a better grasp of the amount of energy consumed by the usual cryptocurrencies, a study by the University of Cambridge tells us that Bitcoin mining consumes about 121 terawatt-hours of electricity per year, equivalent to the annual electricity consumption of the Republic of Ireland.
Bitcoin energy consumption
It is estimated that the Bitcoin business alone has an annual electricity consumption of more than 198 terawatt-hours (TWh), comparable to that of entire countries such as Thailand. An electro-intensive use translates into almost 95 million tons of CO2 per year, similar to the emissions of nations like Nigeria, according to Digiconomist’s Bitcoin Energy Consumption Index. These rising data are ratified by other studies, such as that of the Judge Business School of the University of Cambridge, and they were the focus of media attention by Tesla CEO Elon Musk, who announced in May 2021 that his electric car company would no longer accept Bitcoin as payment.
Why does Bitcoin have such a high energy consumption? The leading cause is an inefficient mining system or consensus mechanism known as Proof-of-Work (PoW). To verify transactions within its decentralized structure, Bitcoin requires computers dedicated to mining cryptocurrencies to solve increasingly complex mathematical problems. Many miners compete simultaneously to see who can certify a transaction first and, as a reward, get paid in the form of Bitcoins.
As more people compete to solve these mathematical problems, they automatically become more complex, resulting in miners needing to pour in more significant amounts of electrical and computational energy to obtain the reward. This energy is completely wasted in the case of the hundreds of thousands of computers that fail to come first in the competition.
A different kind of “mining”
The control of digital currencies works through the famous blockchain, a decentralized database. The operation of this database consists of accumulating information in multiple connected terminals, which distribute it in real-time.
Computers control the transactions of each block and use a validation protocol called data mining. This system allows data to be recorded and interlinked, facilitating retrieval and validation.
This mining consumes a lot of electricity due to the high-powered computers used for it, in addition to the use of energy from non-renewable sources such as coal, which produce harmful emissions.
In order to achieve less harmful effects on the planet, green cryptocurrencies are looking for a new opportunity to continue in the market by innovating the mining process.
Here are three green cryptocurrencies
Cardano consumes significantly less energy than other cryptocurrencies thanks to its PoS consensus algorithm, Ouroboros, which randomly selects validators.
This digital token does not require mining like other cryptocurrencies; it employs an architecture called open representative voting (ORV) to vote for proxies that confirm blockchain transactions on behalf of other users. This approach results in minimal power consumption.
Of the most energy-efficient in its approach, it employs a consensus algorithm called Proof of History (PoH), which timestamps transactions before they are added to the blockchain. This process reduces energy consumption and provides a more sustainable alternative to traditional mining.