2022 saw continued progress in green crypto projects as more industry companies focused on sustainability to reduce carbon emissions. User demand for faster and more energy efficient blockchains, growing awareness of climate change among investors, growing government concerns over energy consumption in the cryptocurrency sector, and other forces are driving a paradigm shift. was promoted.
One of the most notable green crypto developments of 2022 is the Ethereum blockchain’s move from Proof of Work (PoW) to Proof of Stake (PoS) consensus layer. The merge, completed in September, added a new PoS consensus layer, BeaconChain, to Ethereum’s original execution layer. Eliminated the need for energy-intensive mining by allowing the network to be secured using Stake Ether (ETH). This conversion instantly reduced the energy consumption of the Ethereum network by he 99.9%. Ethereum’s position as the leading programmable blockchain marks an industry-wide progress toward low-carbon emission solutions.
Mohamed Alkaf Alhashmi, co-founder of cryptocurrency Islamiccoin, told Cointelegraph how the sector is evolving to meet new demand.
“In 2022, green projects will follow three main vectors. The first is to reduce energy consumption and emissions. The second is ReFi, a new trend in regenerative finance testing financial incentives to reduce carbon emissions.”
AlHashmi said his network has adopted a new emission reduction model to meet its green targets. [the blockchain that issues Islamic Coin], the protocol will automatically deposit 10% of the amount issued into a special Evergreen DAO, a non-profit virtual foundation focused on long-term sustainability and community impact. ”
Dimitri Mikhailov, Chief Scientific Officer of Farukana, a blockchain game metaverse, told Cointelegraph that reducing emissions and on-chain transaction costs will attract users, investors and governments in the long run. said it was good for the industry.
“Today, regular banking transactions consume orders of magnitude less power than blockchain-based transactions, but we are betting on developing more energy-efficient mining equipment and faster blockchain protocols. For example, “green” crypto projects are likely to receive strong support from both governments and potential users. ”
That said, 2022 has seen the rise of some unique, innovative and green cryptocurrency projects that will contribute to a greener world.
Chia Network takes a unique approach to reducing its carbon footprint by using a space and time proof protocol that differs significantly from earlier energy-intensive crypto-mining mechanisms that require powerful GPUs and processors. I’m here. The network performs efficient transaction validation, also known as farming, and allocates the user’s empty computer storage his space for plotting.
This process works through a distributed network of nodes acting as clients and servers that connect with peers. Due to the low processing power requirement, anyone with a decent spec computer can farm Chia (XCH) tokens.
Related: How to Farm Chia: A Guide to XCH Token Farming Using Hard Drives
The network asks farmers for storage space and assigns mining privileges to each miner based on a randomly generated number assigned to each space. Storage spaces whose stored numbers exactly match those generated by the network gain mining privileges.
This algorithmic formula assigns more random numbers to farmers with the most storage space, creating more chances of winning.
XCH can be farmed using a variety of infrastructures, including cloud computing and data storage platforms such as Amazon Web Services. Chia Network’s use cases include supporting decentralized financial projects, asset tokenization platforms, and decentralized exchanges.
On the energy front, Chia Network claims: use About 0.12% of the annual energy used by the Bitcoin network. The concept is ingenious, but it has its flaws. Mining XCH wears out a drive in just 40 days, creating additional demand for hard disks and solid state drives in countries such as China.
Despite this shortcoming, the network has created a revenue-generating opportunity for data storage providers with unused space and companies operating unused and worn out data storage hardware.
Algorand’s blockchain network is built with an environmental focus and has made significant strides towards being carbon negative over the past two years.
In 2021, Algorand partnered with ClimateTrade, which uses blockchain technology to help companies offset their carbon footprint and track emissions in pursuit of a wide range of sustainability goals. make it possible.
Related: What is the Algorand blockchain and how does it work?
This partnership allowed us to set aside a portion of Algorand’s transaction fees to purchase the carbon credits needed to offset the network’s carbon footprint. Algorand is a proof-of-stake blockchain that is more energy efficient than Bitcoin’s (BTC) proof-of-work consensus mechanism.
As an overview, one Bitcoin transaction consumes about 1,206.52 kilowatt-hours of power, while Algorand consumes only one transaction. Consume About 0.000008 kWh of energy.
Solana is a blockchain platform designed to host decentralized applications. It uses the PoS consensus mechanism to validate transactions and embody the principles of green token generation. The platform can theoretically handle over 60,000 transactions per second. This surpasses the Bitcoin network, which processes 7 transactions per second.
On-chain transactions are settled using the platform’s native cryptocurrency, SOL (SOL). The network has been working to achieve carbon neutrality since its inception, and achieved its first milestone in 2021 by participating in the carbon offset program.
Earlier this year, Solana received a favorable carbon rating from the Crypto Carbon Ratings Institute (CCRI) for consuming the lowest energy at a rate of 0.166 Watt-hours per transaction.
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). In PoH, timestamps create a historical record, proving that an event occurred at a specific time. A nifty pioneering solution allows the network to focus on validating current transactions without having to refer to past temporal claims by nodes.
This ensures consistency, as nodes must follow the transaction order that is set. This process allows the protocol to be fast and energy efficient.
Avalanche is a blockchain platform aimed at addressing the blockchain trilemma of scalability, efficiency, and security using a unique proof-of-stake consensus mechanism. The platform will use native he AVAX (AVAX) tokens to facilitate transactions and distribute system rewards.
Related: What is the Avalanche Network (AVAX) and how does it work?
Avalanche has been hailed as one of the most energy efficient chains in 2022. According to a research study by CCRI, the Avalanche public blockchain consumed approximately 0.0005% of the amount of energy used by the Bitcoin network. This is very impressive.
These and other high efficiency characteristics make Avalanche the perfect platform for environmentally friendly projects.
The Future of Green Crypto Projects
Green cryptocurrency projects are taking hold. They are designed to be more environmentally sustainable, and their scaling capabilities and low gas rates have made them increasingly popular among users.
The benefits they provide could lead to the development of greener blockchains while facilitating the enhancement of existing blockchains. That said, 2022 marks the cusp of a new era of greener crypto projects becoming more prevalent.