Energy Efficient Cryptocurrency — How To Invest In Crypto & Collect NFTs Without A Huge Carbon Footprint
Cryptocurrencies of various kinds have taken the world by storm, offering people a way to make global transactions and investments safely, cheaply, and anonymously.
Nothing comes without a cost though, especially in the first few generations of a new technology, when the bugs are still being worked out.
While the original cryptos have been a huge success, in many ways they’ve also been a huge problem.
While there’s been a certain amount of trouble with scams, bad actors, and lost investments, those can be avoided by paying attention to reputable crypto news sites.
What’s harder to avoid is the immense energy consumption that goes hand in hand with most cryptocurrencies.
How Much Is Too Much?
At a time when the entire world is striving to limit their energy usage, and switch everything they can to more efficient forms, this can be a tricky question.
Currently, it’s estimated that Bitcoin, just one crypto, uses about 110 terawatt-hours annually — that’s 0.55% of the world’s power, the equivalent of Malaysia or Sweden.
Whether that’s too much is really a subjective question, and will likely depend on how you view Bitcoin itself.
If you see it as an upstart technology that’s damaging the financial markets, you’ll almost certainly think it’s too much.
On the other hand, if Bitcoin is helping you to escape oppressive monetary controls or do business worldwide, it may seem like a small price to pay for a global system.
Where Is The Energy Going?
No matter how you view it ethically, that is a lot of energy.
Where is it all going, and why does a digital currency need so much of it?
The vast majority of the energy used in Bitcoin and many other cryptos is expended in the “mining” process.
Whenever a transaction is occurring or a new token is being minted, computers around the world compete to find the correct answers to mathematical problems.
Whoever’s computer finds the correct answer first mints the coin, or verifies the transaction, and receives a small amount of cryptocurrency in return.
The odds of being correct are incredibly small, so the only way to make steady returns is to have your computer doing these calculations constantly, trying to solve thousands, millions, or even billions of these math problems every second.
While that kind of computing is possible using specialized equipment and is necessary to the security of the blockchain, it requires a huge amount of energy.
Reducing The Waste
The problem isn’t really that the math requires too much energy overall, but that millions of computers are trying to produce the answer to each question, and only one can be correct.
That means all the energy used by the non-winning computers has essentially been wasted.
An innovative new way to cut down on that energy usage is being used by newer crypto’s, resulting in transactions and new-minted coins that require only 0.0002% of the overall energy.
That number is so much smaller, it’s hard to compare — like holding a candle next to a jet engine.
In this case, we want the candle, because it’s a heck of a lot cheaper to run than the jet, and gets us the same results.
How Does It Work?
It’s surprisingly simple, and cuts right to the heart of the problem.
Instead of having millions of computers waste their energy working towards a solution, these newer energy-efficient cryptocurrencies use a system called DPoS, or Delegated Proof Of Stake.
In this system, only a handful of users are working towards a solution, cutting out almost all of the energy usage in a single move.
The users who work towards a solution keep changing, based on a voting system that allows for a democratic distribution of the opportunity.
The Bottom Line
The long and short of it though, what you really need to know — is that there are better options out there than the first-generation cryptos.
Whether you’re looking to invest in some digital currency, make some global transactions, or purchase items you can only get with cryptos, such as NFTs, there are eco-friendly ways to go about it.
Just be sure to keep an eye on some reputable crypto news sites, particularly if you can find one that primarily reports on the crypto you’re interested in.
They’ll keep you up to date on any changes, opportunities, or breaking news that you need to know about, so you can stay ahead of the curve.
With a well-designed and eco-friendly digital currency, we can have our crypto, and a healthy planet too.
Disclaimer: The information provided on this page does not constitute investment advice, financial advice, trading advice, or any other sort of advice and it should not be treated as such. This content is the opinion of a third party and this site does not recommend that any specific cryptocurrency should be bought, sold, or held, or that any crypto investment should be made. The Crypto market is high risk, with high-risk and unproven projects. Readers should do their own research and consult a professional financial advisor before making any investment decisions.