(Last Updated On: September 5, 2023)
As the world becomes increasingly aware of the urgent need for environmental sustainability, social responsibility, and good governance practices, the realm of cryptocurrencies is also stepping up to the challenge. In recent years, a new wave of cryptocurrencies with a strong focus on Environmental, Social, and Governance (ESG) principles has emerged. These cryptocurrencies aim to leverage the transformative potential of blockchain technology while prioritizing sustainability, ethical practices, and positive impact.
In this article, we will explore the top 10 ESG cryptocurrencies that are paving the way for a more sustainable and socially responsible digital future. From projects tackling climate change and renewable energy to those fostering financial inclusivity and transparency, these cryptocurrencies demonstrate the growing importance of ESG considerations in the crypto space.
The energy consumption tied to mining coins and processing transactions is estimated to be on par with Argentina’s annual energy consumption, according to Columbia University’s Columbia Climate School. By mid-2023, U.S. bitcoin miners alone could increase energy demand by up to six gigawatts, equivalent to the energy used by Houston, as noted by the Electric Reliability Council of Texas. Finding sustainable solutions to reduce crypto’s energy usage is crucial as its popularity grows.
Let’s dive into the exciting world of ESG cryptocurrencies and discover the innovative solutions they bring to the table.
Ripple, the blockchain technology behind the cryptocurrency XRP, is known for its speed in settling transactions within three to five seconds. XRP is the native cryptocurrency of Ripple, and all coins have already been mined. Notably, Ripple has set a goal to achieve carbon neutrality by 2030, as stated on its website.
Unlike other cryptocurrencies, Nano does not rely on mining for transaction validation. Instead, individual users running the software on their computers function as interconnected blocks. This unique approach significantly reduces energy consumption compared to proof-of-work networks like bitcoin.
Nano utilizes block lattice technology for energy-efficient transactions. It creates an account-chain for each user on the network, going beyond traditional blockchain. The platform employs Open Representative Voting (ORV) where account holders vote for their chosen representative to confirm secure transaction blocks. Unlike Bitcoin, Nano allows asynchronous updates of user accounts, eliminating the need for the entire linear blockchain. With just the sender and receiver account-chains involved, Nano can handle up to 125 transactions per second, without competition and delays.
TRX is the native cryptocurrency of Tron blockchain, which has a mission to decentralize the web. A notable advantage of the Tron network is its acquisition of BitTorrent in 2018, which brought in 100 million active daily users for scalability testing, as reported by Inc.
The P2P platform enables creators to directly share applications on the blockchain, resulting in enhanced energy efficiency throughout the process.
Unlike traditional cryptocurrencies, IOTA does not rely on a blockchain. Instead, it utilizes a unique verification method called Directed Acyclic Graph (DAG). This cryptography-based approach enables real-time transaction verification while consuming minimal energy resources. DAG technology sets IOTA apart by offering a more efficient and environmentally friendly solution for digital transactions.
Tezos is a collaborative and decentralized network that operates without an official core team or employees. It is an open-source project where anyone can contribute code to improve the blockchain. This unique self-amendment capacity eliminates the need for disruptive forks during major upgrades, leading to easier coordination and lower costs. Additionally, Tezos allows stakeholders, known as Bakers, who stake 8,000 tez, to vote on proposed amendments and upgrades. The use of programming languages like 0Caml and Michelson ensures high security and makes Tezos attractive to industries such as aerospace, nuclear, and semiconductors.
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