Created in 2009, Bitcoin is one of the pioneering cryptocurrencies, having led to the creation of thousands more.
Over the past three years, blockchain and cryptocurrencies have grown exponentially. Indeed, the number of projects, companies or even funds using or having bet on this technology, testify to its growing importance.
However, it is clear that in parallel to this growth, a major energy problem has been created.
The index established by the British University of Cambridge is clear: cryptos are particularly ecocidal, and Bitcoin in particular. For all of 2021, the Cambridge Bitcoin Consumption Index estimates that the most popular cryptocurrency required 14,145 TWh of electricity to record all of its transactions and also had 33.37 kilotons of electronic waste (including the processors for cryptographic calculations).
Faced with this technology, which is added to all the existing industry and which seems to exist for decades to come thanks to its numerous use cases, it is essential to find concrete solutions to solve the issue of its carbon footprint.
But then, what alternative? There are cryptocurrencies that consume much less energy to operate because they use a different form of transaction validation.
Relatively well-known and created in 2017, the Cardano blockchain (with its token ADA) uses Proof of Stake as its consensus to function. The result: it reportedly needs “only” 6 GWh of electrical energy per year, according to a study conducted by TRG Datacenters. This is roughly equivalent to the annual consumption of 600 American homes.
In terms of operation, this blockchain can be compared to Ethereum since it follows the same objective of allowing the execution of smart contracts but also the deployment of decentralized applications (dApps). Not surprising when you consider that its founder is Charles Hoskinson, one of the co-founders of Ethereum. Moreover, thanks to the very large number of tokens (some 30 billion are in circulation out of a maximum of 45 billion), this makes it a relatively accessible blockchain. This is especially true now with the “crypto winter” that has brought down all cryptos. But Cardano has already started its rebound.
2-Iota : MIOTA
Here’s a cryptocurrency that stands out from the crowd. It is the first open-source distributed ledger designed to ensure the future of what is commonly known as the “Internet of things”. The goal here is to create an environment in which machines exchange resources and services with each other. To do this, Iiota does not use a blockchain, but an alternative called the Tangle. This network structure is thus an open-source registry without the blockchain system.
Its principle is based on an acyclic directed graph (AGG), i.e. it does not use a circuit but rather a hierarchy. Thus, the information passed between two points cannot be passed again, like a city composed only of one-way streets. The criticism that can be levelled at this system, however, is that it is not yet fully decentralized: there is still a “coordinator” in Iota, which acts as a central control body. However, this system, which requires very little data transfer, is currently the one with the lowest carbon impact. Iota currently consumes just over 3.5 GWh per year.
SolarCoin is a currency based on an eponymous blockchain that aims to support the production of solar electricity in the world. While its operation is similar to other crypto-assets in that SolarCoin can be used as a payment method, its main purpose is primarily to incentivize clean energy production.
Created in 2014 by Nick Gogerty, it is unique in that it also allows you to be paid in tokens if you become a solar energy producer yourself by installing photovoltaic panels at home. This crypto was thus imagined with a very specific goal in mind: to find a way for people who want to participate in the energy transition by investing in solar energy to be paid.