A new revolution is on the horizon within the crypto space: the introduction of sustainable initiatives, Green coins crypto. Many different aspects constitute this change, as it involves not only the consensus mechanisms but also the use cases and underlying hardware that is being leveraged. To understand what makes an initiative a green coin initiative, we will break it down into several components and provide you with examples of such coins.
Green coins crypto, from hardware to use cases
Sustainable initiatives can be a way to persuade investors and users to start with a specific cryptocurrency. We should be careful with falling for such initiatives, as it is hard to determine if it is truly a sustainable initiative. We will break it down into logical components starting from hardware and moving to software (e.g., consensus), and the use cases that can run on that software.
The hardware being used is a logical start. With many coins claiming they are sustainable, there is only very little that does a check on the hardware being used. Typical questions are: is the hardware efficient for the task at hand? What is the lifespan of this hardware? You can even go one step further: request the network participants to prove that they are using sustainable energy. A good example of such an initiative is GRN coin, which does both a validation on hardware and electricity sources.
Once the hardware is considered sustainable, you can move to the software. Traditional crypto networks use Proof of Work, which refers to the use of computations to solve a cryptographic challenge to validate transactions. The result? Massive amounts of energy are needed, let alone the hardware involved to do so. With innovations such as Proof of Stake, the energy consumption is significantly less. In those scenarios, the participants are randomly selected through advanced algorithms based on their stake in the network. This ensures a secure network without the need for lots of energy.
Once the hardware and software are in place, it is time to look at the use cases of the network. Simply conducting transactions such as Bitcoin is not enough to be considered a green coin crypto. There are specific initiatives that focus on the electricity grid. For example, if you have solar panels you can sell your surplus energy to other users. Less sun today? You can purchase energy from other users when you need more. This is a good example of sustainable trade without the need for an intermediary.