In order to best reconcile investment in crypto and respect for climate issues, zoom in on 5 energy-efficient crypto projects!
The Carbon Impact: A Major Issue For Blockchains
If Bitcoin is today the spearhead of the blockchain sector, the mining protocol around BTC still raises a lot of questions. Because it requires more and more powerful machines and more and more energy resources, this system based on the Proof of Work (proof of work) is more and more questioned. If Ethereum has already begun its transformation towards a consensus of Proof of Stake, infinitely less energy-consuming, the second crypto in the world still offers a rather energy-intensive protocol.
Recently, Europe has also wanted to legislate on the case of Proof of Work protocols. Via MiCA, there was initially a question of restricting these protocols. The proposal then caused an outcry and the rapporteur of the text had to backtrack. On March 14, MEPs finally voted against banning PoW.
Be that as it may, many other blockchains, often presented as “Ethereum killers” have developed on the shortcomings of Bitcoin or Ethereum. And among these shortcomings, the volume of transactions per second but also the transaction validation protocol. On this point, Solana, Cardano or even Tezos remain infinitely less energy-intensive today.
1 – XRP (XRP)Ripple is a network that facilitates transactions between financial institutions. A solution that has earned this project the nickname of “banking crypto”. Unlike other cryptos that are part of the break, XRP wants to be a bridge between the world of cryptos and the world of traditional finance. If most crypto projects arise as an alternative to the banking system, Ripple is more part of a logic of accompanying it.
In the grip of difficulties with the SEC (Securities and Exchange Commission), the American financial policeman, the XRP project could find a favorable legal outcome. In any case, this is the analysis made by many observers and lawyers trained in the issues of digital assets.
Current Price: $0.8456
Marketcap: $40.7 billion
2 – Solana (SOL)The Solana blockchain was one of the hits of 2021. Going from the gates of the top 100 to a place among the top 10 projects, Solana is today often presented as one of the most important “Ethereum killers”. credible in the market. And it would seem that the ecosystem is developing at high speed. Just look at the many NFT projects that are turning to Solana at the expense of Ethereum.
To guarantee a low-energy protocol, the Solana blockchain uses the principle of Proof of History. A protocol that allows network nodes to validate transactions without using computing power. In addition, this protocol allows Solana to develop great scalability and to offer a competitive solution in terms of the number of transactions processed per second. According to Bank of America, the Solana blockchain could become the VISA of cryptocurrencies.
Current price: $91.68
Marketcap: $29.4 billion
3 – Tezos (XTZ)
Tezos built its solution on the principle of scalability . Among the main arguments for using this blockchain, project leaders emphasize low energy consumption.
According to information from project leaders, the blockchain would be extremely resource-efficient. Thus, Tezos estimates that the energy consumption would correspond to 0.00006 TWh/year. That is the equivalent of the annual energy consumption of 15 French households. These figures make Tezos one of the most energy-efficient blockchains on the market. Far from the annual 130 TWh of Bitcoin and the 26 TWh of the Ethereum blockchain. For the adoption of the Tezos blockchain, this low energy consumption is a real differentiator.
Current price: $3.38
Marketcap: $2.9 billion
4 – Polygon (MATIC)
Built as a second layer solution running alongside Ethereum, Polygon primarily aims to unclog the Ethereum network which can only support a limited number of transactions. A component that is exploding the fees for each transaction on the ETH network, although the fees have been steadily falling for several weeks. This second layer chain allows the creation of protocols and blockchain applications compatible with the Ethereum network. Like many other less energy-intensive blockchains, the Polygon blockchain operates on the principle of Proof of Stake.
In terms of energy consumption, the Polygon blockchain also shows remarkable performance: 0.00079 TWh per year, or the equivalent of the consumption of 200 French households. At the time of writing these lines, the project appears to be one of the 20 most important in the world in terms of marketcap.
Current price: $1.52
Marketcap: $11.7 billion
5 – Algorand (ALGO)
Less known than the other protocols detailed above, Algorand uses the principle of “ Pure Proof of Stake” (PPOS) in order to offer a low-energy blockchain. Algorand’s operating principle is extremely simple: network users can be randomly selected to validate blocks of transactions. At the level of their participations in the Algorand ecosystem.
To provide the means for its ambitions, the Algorand blockchain has partnered with ClimateTrade, an organization that connects companies wishing to offset their carbon footprint to environmental projects. Today, Algorand is in the thirtieth position of the most important crypto projects in terms of marketcap. For many analysts, the ecosystem around Algorand could develop greatly in the months and years to come.
Current Price: $0.8405
Marketcap: $5.6 billion