Greenest Cryptocurrencies to Invest In – Beginner’s Guide for 2022

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Although Bitcoin’s colossal energy consumption has tainted some people’s view of the crypto market, many new projects have sprung up in recent years that look to limit their carbon footprint. These so-called ‘green cryptos’ use different consensus mechanisms to restrict their energy requirements, making them more appealing to environmentally-conscious investors.

This guide discusses ten of the greenest cryptocurrency projects available right now, covering what they are, how they work, and why green cryptos are so crucial in today’s world.

The 10 Greenest Cryptocurrencies to Buy in 2022

Although Bitcoin is still considered one of the best Proof-of-Work coins, its energy requirements have been found to equate to those of a small country. However, the ten green cryptos listed below take a different approach to Bitcoin, enabling them to actively reduce their contribution to global warming. 

  1. Chia (XCH)The Most Green Cryptocurrency of 2022
  2. Solana (SOL)Greenest Crypto with Low Energy Requirement
  3. Ethereum (ETH)Best Green Cryptocurrency for dApp Developers
  4. Tezos (XTZ) – The Most Green Cryptocurrency with Minimal Carbon Footprint
  5. Avalanche (AVAX) – Eco-Friendly Blockchain Offering High Throughput
  6. Algorand (ALGO) – One of the Greenest Crypto Projects in the Blockchain Sector
  7. Flow (FLOW) – Low-Energy Blockchain for NFT Creators
  8. Polkadot (DOT) – Environmentally-Friendly Blockchain Focused on Interoperability
  9. Polygon (MATIC) – Popular Carbon-Negative Layer-2 Blockchain
  10. Cardano (ADA) – Leading Blockchain with Dedicated Sustainability Director

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An In-Depth Examination of the Most Green Cryptos to Invest In

Many of the projects listed above are thought of as the cryptos with the most potential since their low energy requirements make them appealing to ethical investors with a focus on longevity. Let’s take a closer look at these green energy crypto projects, exploring the technology that makes them so eco-friendly:

1. Chia (XCH) – The Most Green Cryptocurrency of 2022

Through extensive research and testing, we’ve found the greenest cryptocurrency of 2022 to be Chia. This blockchain network has a clear focus on its environmental impact, aiming to offer a more eco-friendly alternative to the likes of Bitcoin and Ethereum. Chia does this through an innovative ‘Proof-of-Space-and-Time’ mechanism.

This green crypto mining alternative utilizes free space on network participants’ hard drives, writing 10GB ‘plots’ on them. These plots are then used to validate new blocks on the network, albeit in a low-energy manner. According to Chia’s website, this approach means that Chia consumes up to 500 times less power than the Bitcoin network.

Due to this, Chia is considered one of the best long-term crypto projects, with the network’s native token, XCH, experiencing multiple bull runs. For example, Chia’s price surged over 110% in June 2022 after generating immense publicity through social media.

Looking ahead, this environmentally green cryptocurrency project looks likely to continue gathering momentum – mainly due to the ‘Green Paper’ authored by creator Bram Cohen. This academic journal presents in-depth information on how Chia’s network will continue to expend low amounts of energy over the long term, making it the greenest cryptocurrency on our list.

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2. Solana (SOL) – Greenest Crypto with Low Energy Requirement

Another of the greenest cryptocurrencies to be aware of is Solana. Solana emerged as one of the top trending cryptos in 2021 due to the network’s high level of scalability. This is evidenced by the fact that Solana can theoretically handle 65,000 transactions per second (TPS) – far higher than Bitcoin and Ethereum. 

Solana achieves this by using a hybrid consensus model, employing ‘Proof-of-Stake’ (PoS) and ‘Proof-of-History’ (PoH) mechanisms simultaneously. The latter was introduced in 2017 by Solana’s founder, Anatoly Yakovenko, to significantly increase transaction times.

As an added benefit, this approach to scalability has arguably made Solana the most green crypto in the blockchain space. According to a recent energy use report from Solana, an average transaction on the network uses just 2,707 Joules – which is less energy than three Google searches. 

This green crypto cryptocurrency is also fully transparent, as everyone can see the network’s energy usage on its website, with data verified by an independent energy and climate advisor. Solana is even funding refrigerant destruction in conjunction with Watershed Climate, which has been shown as one of the best ways to offset CO2 emissions.

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3. Ethereum (ETH) – Best Green Cryptocurrency for dApp Developers

Ethereum needs no introduction, as this green cryptocurrency remains the go-to for decentralized application (dApp) developers worldwide. As a smart contract-enabled blockchain, developers can create applications operating in various niches, such as decentralized finance (DeFi) and NFTs. 

ETH also emerged as one of the best metaverse coins in 2021, as this sector exploded in popularity. However, the network’s PoW consensus mechanism has hindered its growth, prompting other blockchains to pick up the slack. 

This trend looks to have reversed following ‘the Merge’, which has seen Ethereum transition to a PoS consensus mechanism. This removes the need for energy-intensive crypto mining, significantly reducing Ethereum’s carbon footprint. According to Ethereum’s website, the network will now expend only around 0.01 TWh per year – considerably less than before. 

In addition, this transition also makes becoming a validator more accessible since it doesn’t require advanced computing hardware. Due to this, Ethereum can now be referred to as an environmentally green cryptocurrency – paving the way for others to follow suit.

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4. Tezos (XTZ) – The Most Green Cryptocurrency with Minimal Carbon Footprint

Tezos is a green energy crypto blockchain similar to Ethereum in that it supports smart contracts and can be used to mint NFTs. However, Tezos differentiates itself by being as decentralized as possible, allowing XTZ holders to make proposals and vote on potential upgrades.

Tezos isn’t a new cryptocurrency, having been around since 2017 when it raised over $230 million through its initial coin offering (ICO). The developers opted to use a ‘liquid Proof-of-Stake’ protocol, which means that anyone with at least 8,000 XTZ tokens can become a validator.

However, those with less than 8,000 XTZ can still become a ‘delegator’, meaning they can receive a share of the staking rewards from the associated validator – also known as a ‘baker’. According to the Tezos website, this approach means the network has an annual carbon footprint of only 17 global citizens.

What’s more, Tezos also has ‘scalable efficiency’, meaning that as on-chain activity increases, the network’s energy consumption actually decreases. Finally, this green cryptocurrency ensures the validity of all energy use data by employing PricewaterhouseCoopers Advisory to analyze the network’s carbon footprint.

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5. Avalanche (AVAX) – Eco-Friendly Blockchain Offering High Throughput

Those looking for the best crypto to buy for long-term potential may wish to consider Avalanche. Avalanche is an innovative blockchain network that uses multiple chains to increase scalability. Due to this multi-chain approach, Avalanche can handle an impressive 4,500 TPS.

Avalanche also has near-instant transaction finality, which means the network is ideal for dApp developers operating in high-growth niches. Interestingly, Avalanche even has a feature called the ‘Avalanche Bridge’, which allows developers to port their creations to Avalanche if they wish.

In addition, Avalanche is also one of the greenest cryptos on the market, as a recent report by the Crypto Carbon Ratings Institute (CCRI) found that it uses only 0.0005% of the energy that Bitcoin does. This equates to an annual energy consumption of just 46 US households.

In addition, the leading crypto analytics firm, Messari Crypto, also found that Avalanche’s annual energy consumption is actually less than many other green crypto mining alternatives, such as Solana and Cardano. Thus, although the AVAX token has taken a dip in recent months, Avalanche is still an appealing prospect for environmentally-conscious investors.

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6. Algorand (ALGO) – One of the Greenest Crypto Projects in the Blockchain Sector

Algorand has long been considered one of the best Proof-of-Stake coins on the market, thanks to the network’s advanced technology. However, Algorand’s consensus mechanism is actually defined as ‘Pure Proof-of-Stake’, which bases a validator’s influence on the number of ALGO tokens they have staked. 

However, those with a lower stake can still be chosen, meaning that the network’s security level is based on all participants rather than just those with the most ALGO. Algorand’s team believes this approach is superior to all other consensus mechanisms and has backed this claim with a well-researched whitepaper.

This approach makes Algorand one of the greenest cryptocurrency projects on our list since the network is entirely carbon neutral. In a recent press release, Algorand’s team also announced a partnership with ClimateTrade to ensure that emissions data is as accurate and transparent as possible. 

What’s more, Algorand has actively promoted its blockchain to eco-friendly organizations, with PlanetWatch and Global Carbon Holding just two of the many enterprises to leverage the power of the network. Given founder Silvio Micali’s clear desire to minimize Algorand’s carbon footprint, this green crypto cryptocurrency is a viable option for ESG-focused investors. 

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7. Flow (FLOW) – Low-Energy Blockchain for NFT Creators

One of the greenest cryptocurrencies to emerge over the past year is Flow. The Flow blockchain was created by the founders of CryptoKitties – one of the first-ever blockchain games. Thanks to Flow’s super-fast PoS consensus mechanism, the network has been able to partner with leading entities like the NBA, UFC, NFL, and LaLiga. 

More than 8,000 developers have now hosted their creations on Flow, with a total of 14 million active wallet accounts. Flow’s popularity has skyrocketed recently due to the ‘Flow Ecosystem Fund’, which offers $725 million in grants to support growth and innovation on the blockchain.

Flow is also one of the greenest cryptos on our list, with the network using just 0.18 GWh of energy each year. Furthermore, Flow’s energy use has been independently verified by Deloitte, ensuring accuracy and transparency.

Those looking to get started with NFTs can also use Flow to mint their creations with super-low energy expenditure. To put this in perspective, minting one NFT on the Flow blockchain uses less energy than posting on Instagram – making the network more energy-efficient than Solana and Polygon.

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8. Polkadot (DOT) – Environmentally-Friendly Blockchain Focused on Interoperability

Polkadot is an open-source blockchain platform that occupies a unique place in the sector. Instead of focusing solely on the network’s growth, Polkadot’s developers have placed great emphasis on interoperability, allowing different chains to interact and share information.

Polkadot does this by offering ‘parachains’ which connect to a central ‘relay chain’. These parachains operate like individual blockchains, yet their transactions are processed on the relay chain. In turn, this means developers do not need to focus on the validation aspect and can place more attention on dApp creation.

Interestingly, a recent article from Bloomberg highlighted that Polkadot has the lowest total electricity consumption and carbon emissions of the six leading PoS chains. Although Solana was found to use the least energy per transaction, Polkadot was deemed to have the lowest carbon footprint. 

Finally, DOT holders are the ones who vote on governance proposals, meaning there’s every chance that further upgrades could be implemented that make Polkadot even more eco-friendly. Therefore, those looking for the greenest cryptocurrency from a carbon footprint perspective will likely find Polkadot an appealing prospect.

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9. Polygon (MATIC) – Popular Carbon-Negative Layer-2 Blockchain

Polygon emerged as one of the best altcoins of 2021 due to the scalability services it offers the Ethereum network. As a ‘Layer-2 blockchain’, Polygon works in tandem with Ethereum to improve transaction speeds and lower network fees.

Through Polygon’s PoS consensus mechanism, dApps hosted on Ethereum’s blockchain could process their transactions through the Polygon network. Since Polygon can process around 65,000 TPS, this approach became much more popular after the explosion in popularity of NFTs.

Polygon is also making waves regarding its positive environmental impact, with a recent blog post noting that the network aims to go carbon-negative in 2022. In addition, Polygon’s team is freeing up $20 million in funding, which will be given to various initiatives that use technology to combat climate change.

Polygon has even pledged to buy $400,000 worth of carbon credits, aiming to gradually retire these to effectively ‘remove’ CO2 from the atmosphere. Finally, these moves are coming directly from Polygon’s co-founders, highlighting how important sustainability is to Polygon’s team.

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10. Cardano (ADA) – Leading Blockchain with Dedicated Sustainability Director

Concluding our list of the most green cryptocurrency projects is Cardano. Cardano is a smart contract-enabled blockchain network that bases all of its technology on peer-reviewed research.

Cardano uses a PoS protocol called ‘Ouroboros’, which selects validators based on the number of ADA tokens they have staked. The more tokens stakes, the more likely a network participant will be chosen and given validation rewards.

This network also aims to become the most green cryptocurrency on the market, as it targets net zero emissions whilst still providing solid returns for investors. Moreover, Cardano’s website also notes that any investments made by the management team are thoroughly vetted to ensure they make a positive real-world impact. 

Interestingly, sustainability is so essential to Cardano that the network even has a dedicated ‘Group Head of Sustainability’ who works with climate-change academics to ensure Cardano is as green as possible. Combine this with Cardano’s low energy requirements, and it’s clear why the network is considered one of the greenest cryptos on the market.

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Overview of Green Cryptocurrency

Now that we’ve listed the most green crypto projects of 2022, let’s focus on what green cryptocurrency actually is. In essence, green cryptocurrencies tend to be blockchain projects that limit their energy use. Although blockchains offer numerous benefits, such as transparency and anonymity, they do require considerable resources to run.

A famous example is Bitcoin, which uses a PoW consensus mechanism. This mechanism requires ‘miners’ to solve complex mathematical problems to validate transactions on the network. As expected, this uses vast amounts of electricity, which has harmed Bitcoin’s reputation from an eco-friendly perspective.

To put this into context, a report from the University of Cambridge found that the Bitcoin network consumes around 97.11 TWh of electricity per year – more than the entire country of Argentina. Once this revelation began filtering throughout the community, blockchain developers worldwide began altering how their networks run.

This is where green crypto comes in, which tends to refer to blockchains that use an alternative to the PoW mechanism that Bitcoin employs. The most common option is ‘Proof-of-Stake’ (PoS), which completely removes the mining process in favour of staking. This drastically reduces the energy requirements needed to operate the blockchain.

However, many blockchain technology innovations have occurred over the past year that aim to improve energy efficiency even further. For example, the previously-mentioned ‘Proof-of-Space-and-Time’ mechanism employed on the Chia network utilizes unused disk space for validation. In addition, Solana’s ‘Proof-of-History’ protocol helps reduce electricity consumption while remaining scalable.

Aside from technology, many green cryptos are also identifiable by their partnerships with climate change enterprises. Cardano and Polygon are two prominent blockchains that make targeted investments to reduce the effects of climate change, making them popular with environmentally-conscious investors.

Why is Green Crypto So Popular?

Green cryptocurrency projects have had a dramatic uptick in popularity over the past year – but why is this? To answer this question, detailed below are four reasons why investors have gravitated toward these projects: 

Has a Lower Carbon Footprint

Needless to say, green cryptos have a much lower carbon footprint than their non-green counterparts. This is because the reduced electricity consumption directly leads to less carbon dioxide being pumped into the atmosphere. In turn, this means green cryptos have less of an impact on global warming.

Following ‘the Merge’, Ethereum 2.0 now has a much lower carbon footprint than it did when using the PoW consensus protocol. According to reports, Ethereum’s carbon emissions are now 99% lower than they were previously. 

Encourages Eco-Friendly Investing

Green crypto is also popular because it encourages investors to include an asset’s environmental impact in their decision-making. Although a considerable percentage of investors still focus solely on financial gain, the growth of green crypto has helped change many people’s minds on what is really important.

As green cryptos become more prominent, the non-green cryptos will naturally become less popular. As they fall by the wayside, so too will their negative impact on the environment. 

Promotes Technological Innovation

According to an article by the New York Times, climate change continues to accelerate, bringing the world ever closer to irreversible effects. Due to this, the technological innovations brought about by green cryptos have become more critical than ever. 

The crypto market is an inherently competitive space, which is seen as a good thing for the environment. As crypto projects attempt to outdo each other, the technological upgrades will naturally make them more sustainable – leading to lowered carbon footprints across the board and more sustainable cryptos to invest in.

Changes People’s Perception of Crypto

Finally, the growth of green crypto is also essential in terms of changing people’s perceptions of the market. Bitcoin’s colossal energy use has undoubtedly soured people’s views on crypto, yet the emergence of green projects like Chia has begun to change these views.

If this trend towards sustainable technology continues, there’s no doubt that people will begin looking at cryptocurrency in a more positive light. Especially the most energy efficient cryptocurrencies. Not only will this benefit green cryptos directly, but it will also benefit the market as a whole.

Top Strategies to Find the Greenest Cryptocurrencies

There’s no doubting the positive impact of green cryptocurrencies on the environment. Yet, investors looking to gain exposure to these projects must conduct additional research to ensure they are as eco-friendly as they claim. Listed below are three strategies investors can employ to identify these green cryptos:

Be Aware of Current Affairs

One of the best ways to identify green cryptocurrencies is to be aware of the pressing issues in today’s world. By being aware of the hot topics, investors can identify which crypto projects are looking to offer solutions. 

For example, reforestation has become a widely-discussed topic in eco-friendly circles, leading Cardano’s developers to partner with the leading sustainability firm, veritree. Through this partnership, Cardano has created its own ‘Cardano Forest’, with the overarching goal being to plant one million trees.

Review a Project’s Whitepaper

Green cryptos can also be uncovered by thoroughly reviewing the project’s whitepaper. The whitepaper is an excellent resource for investors as it discusses the technology underpinning the project and its roadmap for the future.

The latter is crucial for eco-conscious investors, as any sustainability plans and goals should be noted here. If a project doesn’t mention anything related to sustainability or the environment, chances are that these elements are not important to the developers. 

Look for Eco-Friendly Partnerships

Finally, investors can find green cryptos by keeping an eye out for partnerships that look to foster improvements in the environment. When crypto projects partner with other enterprises, it allows them to put their resources to good use and helps increase awareness of the project.

For example, Chia announced a partnership with cryptography firm Supranational back in October 2021 to help secure the network even further whilst keeping energy expenditure low. This partnership has helped Chia surge into the limelight thanks to its upgraded technology, benefitting investors and the environment as a whole.

Greenest Cryptocurrencies to Invest In – Conclusion

In conclusion, this article has taken an in-depth look at the greenest cryptocurrency projects on the market, covering what they are, how their technology works, and why they are so important in today’s world. 

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FAQs

Are any cryptocurrencies green?

Yes – more cryptocurrencies than ever are employing cutting-edge technology to reduce their carbon footprint. This tends to come in the form of a ‘Proof-of-Stake’ (PoS) consensus mechanism, which removes the need for mining – thereby reducing energy requirements.

Which crypto is the greenest in 2022?

Our pick for the most green crypto in 2022 is Chia. This blockchain network uses a unique ‘Proof-of-Space-and-Time’ consensus mechanism that utilizes unused disk space. Due to this, the Chia network uses up to 500 times less energy than the Bitcoin network.