Alternative of Bitcoins that could provide green solutions
According to a recent estimate provided by the University of Cambridge, the digital currency named Bitcoin absorbs more electricity a year than the whole of Argentina. The reason for this occurrence is the process called mining that is conducted to mine bitcoin. To mine bitcoin, powerful computers work day and night finding a solution for complex mathematical problems.
The electricity consumed for mining bitcoin in these computers is unusually exorbitant. In a recent Police raid, due to unusually high power consumption, cops suspected that someone was growing marijuana indoors. After raiding the place, they found out that it was a bitcoin mining setup.
Similar to the case, there are thousands of bitcoin mining setups, and over 70% of them are based in China. These setups are consuming enormous amounts of electricity every day and continue to do so for the production of bitcoins. This unusually high power consumption has given rise to environmental concerns. In May 2021, Elon Musk had tweeted that Tesla would stop taking Bitcoin as payment because it would lead the vehicles to have poor green credentials.
Therefore, investors are looking into various other cryptocurrencies that could replace bitcoin’s position and are far more greener in terms of power consumption. These digital coins are collectively known as “altcoins’. Many of these altcoins are less harmful than bitcoin production and less likely to cause harm to the environment.
The alternative altcoins
Out of thousands of existing altcoins available in the market, Cardano, ethereum, solarcoin and litecoin have substantiated to be less harmful to the environment and could potentially replace bitcoin. Let us look into some of them in more detail.
Litecoin: Litecoins are very similar to bitcoins, but in comparison to bitcoin, they only take a quarter of the time to produce. At the same time, for solving complex problems, bitcoin mining requires powerful hardware in addition to huge electricity, but on the other hand, litecoin mining requires standard computer hardware and far less electricity consumption.
Solarcoin: Solarcoin encourages the use of solar energy. One solar coin is given to the person who is generating one megawatt-hour solar energy. This coin aims to encourage real-world green behaviours.
Ethereum: Ethereum, after its recent updates, have adapted to the ‘proof-of-stake system, and it is also the world’s second-largest cryptocurrency after bitcoin. There is no competition between miners in this new proof-of-stake system, and this protocol has been adapted to address environmental concerns. The elimination of competition will significantly reduce power consumption making mining more environmentally friendly.
With the increasing environmental concerns, it is highly likely that Ethreum’s proof of stake system will be later on adapted by new altcoins coming into the market. Investors are also looking for a green solution when it comes to converting bitcoins into other alternate cryptocurrencies.