In this last post for the week, we will be looking at various greener cryptocurrencies that have emerged in light of the negative backlash of the carbon-intensive Bitcoin.
Aside from the larger cryptocurrencies like Bitcoin and Ethereum, there are several hundred other cryptocurrencies that have emerged in the market, some of which serve as viable green alternatives of digital currencies.
SolarCoin is a cryptocurrency that was launched in 2014 by Nick Gogerty and Joseph Zitoli as a way to transfer value between people that want to use solar energy (Johnson et al., 2015). The blockchain operates in a way by rewarding SolarCoin users with more coins when they prove that they have generated solar energy via documentation or authorised electricity metering, which incentivises other individuals to use solar energy as well. Furthermore, as SolarCoin engages in using a proof-of-stake (POS) distribution instead of a proof-of-work (POW) distribution like bitcoin, making it less energy intensive. Instead of consuming a tremendous ton of energy for the searching process in the POW distribution where an individual with a greater computational power is awarded, a leader will be selected based on its stakes (their contribution to the blockchain network) to perform mining process and add a new block to the chain (Nguyen et al., 2019).
Additonally, according to Johnson et al., (2015), SolarCoin has a block consensus (a procedure where all the peers in the blockchain reach a common agreement on the existing state of the ledger) time of 1 minute compared to Bitcoin’s block consensus time of 10 minutes, rendering efficiency increases for the amount of blocks that can be transacted every day.
However, despite its greener appeal, the worth of the SolarCoin is minute compared to the colossal value of Bitcoin in the cryptocurrency market. In fact, there are many other cryptocurrencies such as Cardano and Algorand that make use of the greener POS network (La Monica, 2021), but the dominance of the Bitcoin in the market is still highly evident and extremely worrying.
References
Johnson, L.P., Isam, A., Gogerty, N. & Zitoli, J. (2015) Connecting the Blockchain to the Sun to Save the Planet, Japan: SolCrypto.
La Monica, P.R. (2021) ‘Beyond bitcoin: These altcoins are super popular’, CNN. Available at: https://www.cnn.com/2021/06/16/investing/altcoins-cryptocurrencies/index.html (accessed March 2022).
Nguyen, C.T., Hoang, D.T., Nguyen, D.N., Niyato, D., Nguyen, H.T. & Dutkiewicz, E. (2019) ‘Proof-of-Stake Consensus Mechanisms for Future Blockchain Networks: Fundamentals, Applications and Opportunities’, IEEE Access, 7, 85727–85745.