Cryptocurrencies and the environmental challenges
Bitcoin lovers and detractors have been fiercely arguing whether Bitcoin, the No. 1 cryptocurrency in terms of market capitalization, is good for the environment or not. Bitcoin evangelists say that “the government-controlled currency and the entire financial infrastructure that supports it ruin the climate.”
However, critics of Bitcoin argue that “the process of mining new coins is a huge waste of energy that benefits only a few people at a huge cost to the planet.” In short, the cryptocurrency manufacturing process itself is an “energy-eating hippopotamus.”
Bitcoin, however, is far from being the only environmental villain in crypto space. In addition, many tokens rely on proof-of-work consensus algorithms that absorb energy to verify transactions and mint new coins. Proof of work refers to an agreement algorithm that proves that it has completed the task of adding a new block to the blockchain.
Most experts say Proof of Stake (PoS) can provide a dramatically greener future for the cryptocurrency sector. ‘Proof of equity’ refers to an agreement algorithm that gives decision-making authority in proportion to the percentage of shares held in cryptocurrency.
Even Ethereum Network plans to switch from Proof of Work (PoW) to a more efficient Proof of Equity (PoS) system at the end of 2021. Currently, Bitcoin and Ethereum together account for almost 90% of all proof-of-work coins’ annual electricity use, so the rest have a small share.
The market-leading coins using consensus mechanisms(POS) that rely on more prominent coin owners to validate blockchain transactions are Binance Coin,