A cryptocurrency is a virtual currency which is ‘mined’ by coders and computers using a complex algorithm or the blockchain technology.
What works in their favor is that they are not regulated by a bank or a central authority like the government, thereby leaving no trail of a transaction.
Cryptocurrencies have been gaining a lot of traction over the past few months due to the meteoric rise in their values.
Chances are that you have read Bitcoin making headlines almost on a daily basis and why not? The cryptocurrency has been making waves with its huge surge in its value over the last couple of years. Currently, trading in the vicinity of US$9,000, bitcoins are fast being accepted as alternate modes of payments.
The value of a cryptocurrency is determined by how much people want it. A bitcoin is processed after a ‘miner’ solves a complex mathematical problem and coming up with a 64-digit solution.
The miner is rewarded with a bitcoin, which is later exchanged with money from investors.
On the flip side, the mining process of cryptocurrencies is an energy-intensive procedure, which reportedly uses as much electricity as an American household uses up to a week.
Here’s the math: For each bitcoin transaction, miners use 215 kilowatt-hours of energy, and there are about 3,00,000 bitcoins being transacted every day.
As an average American household uses around 901 KWh of electricity per month, each Bitcoin transaction uses up enough energy to fulfill the house’s needs for almost a week.
Since 2015, the energy consumption per bitcoin transaction has been very high as the value of a Bitcoin is directly proportional to the amount of electricity consumed by each transfer.
And because of the rising profits, miners use more computing power to mine cryptocurrencies.
In the wake of energy concerns, miners have pitched the idea of green cryptocurrencies as a sustainable tool for investment.
These cryptocurrencies cash in on renewable sources of energy like solar energy, wind energy, and hydropower to harness transactions.
What’s more that these can be mined or transacted by using the existing space in a laptop or computer’s hard disc.
The process of mining goes on in the background and does not interfere with the user’s workflow.
Here’s a list of a few popular green cryptocurrencies:
Burst: Secured by military-grade cryptography, a Burst coin hardly uses any more energy than is required to keep a computer on. With its Proof-of-Capacity algorithm, one can easily mine cryptocurrency without using energy-guzzling CPUs. The more space miners allocate for mining a Burst coin, the more rewarding the process.
EverGreen coin: This cryptocurrency’s website claims that the EverGreen coin draws from its ancestor, the Bitcoin, and provides a more energy-efficient platform for cryptocurrency transfers. Using the proof-of-stake concept, an EverGreen coin guarantees a 7% annual return on the cryptocurrency’s value.
EnergyCoin: Created in 2014, EnergyCoin was conceived along the lines of PeerCoin, world’s first cryptocurrency using the proof-of-stake algorithm. The green cryptocurrency was mainly designed for individuals and companies dealing with energy applications. It seeks to introduce a trend of energy transition, wherein, cryptocurrency transfers move from fossil fuels to renewable sources.
GenerCoin: The best thing about this cryptocurrency is that it uses energy units bought from generators of renewable energy. The energy output is then sold to wholesalers and end users. It is backed by Arterran Renewables.
The popularity of green cryptocurrencies has also led to the creation of trading platforms specifically designed for energy-efficient virtual transactions.
WePower: WePower is a perfect example of how the blockchain technology can be used to not only benefit industries but also the environment.
WePower enables people to purchase renewable energy at below-market prices directly from manufacturers by using Ethereum-based contract tokens. It enables producers to raise capital from cryptocurrency investors by issuing their own Ethereum-based tokens.
Launched in 2004, WePower’s co-founder Nikolaj Martyniuk said the platform was conceived to find solutions which could bridge the gap between existing energy systems and digital technologies.
MoonLite Project: The MoonLite Project is a unique initiative in the sphere of crypt-mining by using a customized ‘smart-mining’ solution.
These solutions would be devised using tools like automation and artificial intelligence. To be launched in August 2018, the initiative would primarily deal in cryptocurrencies like Bitcoin, Bitcoin Cash, and Litecoin.
The company plans to launch data centres in politically-stable countries where it can get clean and low-cost electricity on a contractual basis.
Also, MoonLite Project’s first data center would be established in Iceland and the average tariff for an industrial connection would be around $0.045 each KWh.
Even as you read this article, innovations in green cryptocurrencies are being conceived every minute. Experts have pointed out that 2018 would be the year of green cryptocurrencies.
The trend is expected to draw strength from an amalgamation of more environmental data and digital technologies like blockchain and smart contracts, apart from a burgeoning corporate interest in financing renewable energy projects.
Disclaimer: Trading in cryptocurrencies is risky. Information provided on this website does not constitute investment advice. There is no guarantee of profits and we will not be responsible for any losses incurred or decisions made based on the information provided here. Past performance is not an indicator of future returns. Consult a registered investment advisor before investing.