- >The Top 5 Environmentally-Oriented Crypto Coins
The Top 5 Environmentally-Oriented Crypto Coins
With the advent of self-induced mass extinction upon us, it pays dividends to take a look at the top 5 environmentally oriented coins. The environment has been a hot topic in cryptocurrency ever since people started to measure the energy used by the Bitcoin network.
Are there any cryptocurrencies that have been engineered from the start to be environmentally friendly? There sure are, and there will likely be more to come. In this article, we’re going to take a look at a number of cryptocurrencies that don’t exist, as well as the hypothetical “Carbon Coin” proposed by Kim Stanley Robinson.
Keegan Francis | Mar 12, 2021
What is the Fictional Carbon Coin?
The idea behind the carbon coin that there can be a cryptocurrency attached to actions that keeps carbon in the ground. The key premise is that carbon dioxide is the leading cause of global warming. Getting off of fossil fuels reduced the rate at which we’re headed towards the runaway greenhouse gas effect. Carbon coin would make it so there is direct monetary incentive for people to change their eco-unfriendly behaviors. If only for personal gain, people may become self motivated to become environmentally conscious. If we know things about money, whether we like it or not, it is a great motivator.
At this point carbon coin is still just a idea but there are actually some real-world comparables that we’ll get to in a moment. Kim Stanley Robinson is an American science fiction writer with a particular focus on environmentally-oriented topics. So we were happy to see carbon coins covered in his new novel The Ministry for the Future.
EcoCoin is a coin that fits the above definition of carbon coin rather neatly. The project aims to reward action that improves the environment. The intention is to become a global digital currency. This is a wonderful idea on the surface, but I like to take a look at any new project form a perspective of pragmatism. One problem that EcoCoin will have to solve in order to make their project a success is the Oracle Problem (connecting the real-world to blockchains). This is not a problem that is unique to EcoCoin, many blockchain projects face this problem presented in different ways.
ChainLink is an Ethereum based project that aims to solve this problem by ensuring the truthfulness of data being used within blockchain based systems. If EcoCoin would like to mint new coins and give them to users performing good deeds, they need to know with 100% certainty that the eco-friendly event actually occurred. Otherwise clever hackers can game the system and ruin the currency. So is there a cryptocurrency that has oraclization built into it?
Cardano is a project that embodies many of the traits we would like to see in an environmentally friendly coin.
For starters, the main driver of Cardano is an algorithm called “Proof of Stake”. This is a method of reaching consensus throughout the network that is far less energy intensive than Bitcoin’s “Proof of Work”. Cardano is a token platform, like Ethereum, but without the bloat.
In theory, Cardano will be able to scale to meet the demand of a global population without jeopardizing speed or efficiency. To top it all off, big players such as Wolfram Alpha are planning on building avant-garde oracalization systems for Cardano.
Meet SolarCoin, a project that mints 1 Solarcoin for each Megawatt hour generated using solar technology. The reason why I like this project is because they’ve oracalized the creation of new tokens.
The oracalization process involves uploading paper documentation supporting the fact that you’ve generated this energy. Eventually, I can see integrated Internet of Things devices attached directly to the solar panels. The problem of people manipulating these devices still exists, but I am confident that innovations in oracalization can fix this problem in the future.
This project needs to be a reality. P2P energy trading. Taken directly from the PowerLedger website, Power Ledger is the operating system for new energy markets. The idea is that every individual is generating electricity in their homes and commercial properties.
If they generate an excess of electricity, they should be able to sell it immediately into the grid. This would require our electricity grids to be “smart” in the sense that they are self-balancing, and self-regulating. When I sell POWR into the market, a corresponding shift in physical reality needs to occur. This is next level oraclization, but I think that we will eventually live in a world where this is the reality.
What About Bitcoin?
The last coin on the list is actually Bitcoin. There is a ton of controversy over the massive energy requirements in order to run Bitcoin. My intention here is to lay out the arguments on both sides of why Bitcoin is, and is not environmentally friendly. The conclusion you will reach is either that Bitcoin is the biggest waste of energy ever, or that Bitcoin will actually lead to a green energy revolution the likes of which we’ve never seen.
1) Bitcoin is Bad for the Environment
Bitcoin requires ever more vast amounts of electricity to run. There is a correlation between the amount of energy used by the network, and the price of Bitcoin. It could be the case that as the price of Bitcoin continues to rise, so too does the amount of electricity required to run the network. Unless the price of Bitcoin falls, or we stop running Bitcoin altogether, we will continue to spend country-sized amounts of electricity running Bitcoin.
Bitcoin runs on a “winner takes all” algorithm that only rewards one computer every time a block is produced. This is the bane of the argument against the energy efficiency of Bitcoin’s Proof of Work consensus mechanism. What this means is that millions of computers are racing to mine a block (solve a difficult problem) every 10 minutes. Only 1 computer gets to actually claim the reward. The other computers in the network must then start from scratch in order to mine the next block. This creates a “no progress made” paradigm where the energy used in the previous block cannot be carried forward into the next block.
2) Bitcoin Will Lead to A Green Energy Revolution
It is useful to understand that the most profitable miners in the world are the ones that pay the least for energy. The lower the energy cost, the higher the profit for mining Bitcoin. It stands to reason that Bitcoin mining companies would seek out the cheapest sources of electricity in order to fuel their operations.
The cheapest form of energy typically comes in the form of energy that would otherwise be discharged into the ground. Electricity must overproduce in order to meet peak demand on electrical grids. The excess of electricity is sometimes cycled through the system, but typically discharged into the earth. This is energy that was harnessed, but not used. The producers of this energy will take an absolute loss on this unless they find a buyer. Bitcoin miners are ready to buy up this electricity, as long as they can place a Bitcoin mining operation next to the energy farm.
One of the deterrents for building green energy projects like hydroelectric dams, and solar or wind farms is the infrastructure. It costs a lot of money to get energy to its destination. Abundant green energy sources are not always located in proximity to cities. Bitcoin miners can help subsidize the costs of the project by making the green energy project immediately viable. As soon as the source is ready to be harnessed, the Bitcoin miners can be turned on. So as you can see, Bitcoin leads us to make use of otherwise wasted energy, as well as bring incentive to take on new green energy projects.
All Cryptocurrencies are Better than Cash
If we take a step back from cryptocurrencies for a moment, we will come to realize something jarring about cash. It is made from cotton, and ink. It requires us to run printing presses in order to produce, and cash needs to be replaced every 18 months due to wear and tear.
Cash is typically confined to only be valuable within the borders where it was produced. Lastly, cash — or more broadly USD — is the currency that is currently used in international trade. Those who hold cash largely influence the direction of our technology, and economies. If the global share of value shifts to being measured in Bitcoin (or some other green coin), a completely new class of wealthy individuals will arise and shape the future. One where money is borderless, and where money is invested in the future of the earth, rather than the present state of their bank accounts.