Can define sustainable cryptocurrencies as those that do not generate or generate the least possible impact on the environment to be created and maintained.
To better understand this concept of green digital currencies, as they are also often called, it is necessary to talk a little about the cryptocurrency mining process.
Bitcoin and Ether (Ethereum), for example, use a method called proof of work (PoW), which means proof of work — here, a supplement is worth mentioning: as most of the existing cryptocurrencies use the protocols of these two networks as a basis for creation, they end up following the same mining medium.
In proof of work, miners need to contribute their computational power to solve mathematical problems and, with that, be able to validate existing transactions in each block of the blockchain – the same process generates new units of these cryptos.
It demands a high electrical energy consumption since the computers used for this need to be quite powerful and robust and are “running” all the time.
Precisely for this reason, companies and environmentalists have so much criticism about the steps needed to generate digital currencies.
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Are There Sustainable Cryptocurrencies Already?
As the world of digital assets is not limited to the currency created by Satoshi Nakamoto. Many of them are already born green — and those that are not are looking for ways to become.
Cardano (ADA) and Ether (ETH) are two good examples of sustainable cryptocurrencies.
System crash! Hadn’t we said that the digital asset of the Ethereum network follows the same mining process as Bitcoin. That is, nothing green? How is she now a friend of nature? Keep reading, and you will understand!
Cardano (ADA) will consider sustainable crypto because its mining will do the proof of stake (PoS) consensus in Portuguese.
The idea is basically the same: to validate the information contained in the blocks of the network. But, for this, it is unnecessary to have so much computational power. Which ends up not generating impacts resulting from energy expenditure and, therefore, enters the concept of sustainability.
In short, instead of relying on powerful computers. The participants in the process, called validators, must provide a minimum amount of cryptocurrencies to enter this process.
Ethereum 2.0, an updated version of the Ethereum network,.Puts Ether on the same level as Cardano and many other sustainable cryptocurrencies already available in this market.
The change in ETH mining will also do consensus- proof of stake- among the improvements foreseen with the update of its protocol.
Why Are Green Cryptocurrencies So Important?
The answer to this inquiry can be pretty straightforward. Green digital currencies are less harmful to the environment and help preserve nature. As we said, mining processes tend to hurt the world ecosystem due to the high consumption. Of electrical energy and everything that derives from it.
Because of this, sustainable cryptocurrencies are being increasingly sought and demand. And let’s consider that there will be more and more use of digital assets in the future. Finding processes compatible with the sustainability expected of people and companies is essential.
How Do We Make Cryptocurrencies Sustainable?
And now, how to turn this into reality? Well, it is necessary to remember a point we said at the beginning of this article, which is that most cryptocurrencies follow the original protocol of another network.
For example, many will base on Bitcoin codes. So if it follows the proof of work consensus, all assets derived from it will too.
Considering this principle, it is possible to think that Ethereum 2.0 will be responsible for more green digital currencies after implementing its new mining mode.
We mean that to make cryptocurrencies sustainable. It is essential to adopt alternative mining methods, such as proof of stake. Measures like this can change the way these assets will see and affect their supply and demand, influencing their valuation.
Understand better other factors that influence the price of cryptocurrencies in this article here on the blog
Because of this, more and more people and companies are demanding so-called green digital currencies. wwhich generate the least possible impact on nature.
To give you an idea, failure to meet this current requirement can lead to the devaluation of cryptos due to the reduction in demand and use.
The reason was the high carbon emission generat. So it is possible to mine these digital assets. Musk says his electric vehicle company will only return to accepting and using Bitcoin when the grid uses more sustainable energy.
This announcement caused the value of BTC to drop 10% within 24 hours of the tweet will post. Not seeking ways to create and generate sustainable cryptocurrencies can seriously affect this market.
But how is this possible? What protocols need to will adope and modified for the world of digital currencies to gain sustainability and become a “friend of nature”?
That’s pardon we’ll talk about in this article. So, if you also think about the planet’s future, but don’t give up on using technological solutions, read on and check out what can will do for the benefit of all.
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