Top 5 eco-friendly cryptocurrencies

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21 Dec, 2021

9 min read

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As a conscious investor, you might want to consider one of these cryptocurrency investment options, if cryptocurrency is an asset class that you are keen on

If you care about where your paper trail leads and are concerned about the kind of businesses that your money is supporting you are part of a rapidly growing chunk of conscious investors. It is only fair after all. Money is empowerment, as most of us discovered when we moved from our allowance to our first salary. The conscious investor is very cognizant of the fact that his capital - in whatever small way - empowers a business. If he invests in a company that manufactures arms and ammunition, the conscious investor is concerned that he or she is supporting war and violence, for example.

On the other hand, by purposefully choosing causes that he or she wants to support, conscious investors feel like their capital - to whatever little capacity - empowers the said cause.

Enter eco-conscious investors. This type of conscious investor is especially concerned with how his or her investments impact the health of our planet. They choose stocks of companies that are eco-friendly; will choose mutual funds that focus on sustainability and yes, eco friendly cryptocurrencies.

If you are new to cryptocurrency, also known as crypto, but are keen to invest, and do so in an environmentally conscious manner, here's what you need to know about cryptocurrency:

(This section will also answer any questions you might have about "why the big fuss about crypto and eco-friendliness?" Or "why should I worry about eco friendly cryptocurrencies?")

  • Cryptocurrency is ALL data as there is no physical currency or coin to be owned. No currency or coin backs cryptocurrency and it cannot be converted into any physical coins unless converted to another currency.
    For example, if you have Rs 50,000 in your bank account, it can be withdrawn as a physical Rs 50,000 that you can touch and feel. However, if you have 5000 bitcoin coins, you will need to convert them to Rupees or US Dollars or Yen or Euro if you want to hold it physically.
  • Instead, data is stored in a virtual database and this database is tremendously secure. Security is ensured by top level cryptography (which is a means of securing communication). The virtual database is decentralised to give it a higher level of security.
  • The virtual database controls the creation of additional coins, tracks coin transfer and is able to verify coin ownership. A database like that - as you can imagine - needs a behemoth of an electrical network.
  • Because of the way cryptocurrencies function, they are incredibly energy-hungry and leave a tremendous carbon footprint in their wake. But not all cryptocurrency uses the same methodology of transfer and therefore some guzzle far less energy and are more eco-friendly than others.
 

Nano

This is said to be one of the most eco friendly cryptocurrencies. Nano does not use the same technique that most other cryptocurrencies use to mine data and confirm transactions. In fact, Nano does not use the energy-guzzling blockchain method used by other currencies.

Nano instead uses an open representative voting method where users can vote on each transaction.

This does not affect the speed at which Nano transactions occur. For the user, it simply means that instead of data mining, captcha puzzles must be solved in order for tokens to be earned.

Key details: 

  • The Nano price stands at USD 5.91 at the time of writing this post
  • Its 24 hour high has been USD 6.07, while its low has been USD 5.84
  • About a year ago its price stood at USD 0.75

Iota

Iota is often named as the most eco-friendly cryptocurrency out there. A very frequently quoted comparison is this: it takes 741kWh for 100,000 Iota transactions versus 11kWh for 1 Bitcoin transaction.

Like Nano, Iota brings an entirely different ledger process to the table that uses devices that consume far less power. Additionally, although it does require data mining, it uses an alternative data mining method, which results in it using far less energy.

Key details: 

  • The Iota price stands at USD 1.42 at the time of writing this post
  • Its 24 hour high has been USD 1.43, while its low has been USD 1.37
  • About a year ago its price stood at USD 0.25

Cardano

This eco-friendly cryptocurrency uses 0.5479kWh per 1000 transactions and is therefore definitely a consideration for investors seeking sustainable cryptocurrencies.

One of the ways in which Cardano is able to conserve energy is by its PoS (Proof of Stake) model, in which users need to buy tokens to join the network.

Somewhat like Iota, Cardano is a peer-reviewed cryptocurrency.

Key details: 

  • The Cardano price stands at USD 2.35 at the time of writing this post
  • It's 24 hour high has been USD 2.38, while its low has been USD 2.03
  • About a year ago its price stood at USD 0.11

Bitgreen

Well, this cryptocurrency certainly makes its focus and target audience known by its very name.

This cryptocurrency can be earned by living a sustainable lifestyle, proven by financial transactions linked to eco-friendly spending, for example, you can earn Bitgreen coins by using a pool taxi service rather than travelling standalone or by purchasing sustainable products.

Key details: 

  • The Bit Green price stands at USD 0.0667 at the time of writing this post
  • Its 24 hour high has been USD 0.1008 while its low has been USD 0.05781
  • About a year ago its price stood at USD 0.088 and it saw a dramatic peak and dip about six months ago.

Chia

Chia uses about 0.023kWh per transaction.

This cryptocurrency uses a consensus model that requires users to maintain some amount of space on their hard discs. Instead of proof of stake, it uses a proof of time and pace consensus for verification.

The user requires space on the hard disc in order to create 'plots' that use drive space as a resource rather than actual energy. The plots allow the user to partake in the consensus process.

 Key details: 

  • The Chia price stands at USD 180 at the time of writing this post
  • Its 24 hour high has been USD 194.57, while its low has been USD 176.43
  • About a year ago its price stood at USD 600 approx, and it hit a peak of about USD 1600 nearly a year ago.

Conclusion: 

There are various cryptocurrency options out there that use different data mining approaches and that also come at various price points. Do your research and make an informed choice. Remember that trading in cryptocurrency comes with the same sort of volatility risk as trading in the stock market.

 

Disclaimer: Angel One Limited does not endorse investment and trade in crypto currencies. This article is only for education and information purposes. Discuss with your investment advisor before making such risky calls.

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