The Future of Crypto is Green
Elon Musk drove yet another polarizing conversation about Crypto when he tweeted about the damaging effects of crypto mining on the environment. Other cryptocurrency industry leaders jumped in to counter his argument. The Winklevoss Twins, co-founders of the cryptocurrency exchange Gemini, fired back saying “bitcoin mining is actually pushing the renewable energy industry forward… Bitcoin mining is a massive subsidy for renewable energy.” Barstool founder David Portnoy called Musk out, saying he “flip-flops every second about Bitcoin.”
Cryptocurrencies are becoming greener
The cryptocurrency and blockchain industry is evolving at a rapid rate - blockchain’s environmental impact is already changing. Like the evolution from full diesel to hybrid to electric in the automobile industry, crypto is making a similar evolution and at a faster pace.
When we wrote about NFTs in February 2021, we mentioned how creating “a single NFT’s carbon footprint overall, is on average equivalent to an American’s total electric power consumption for nearly two weeks.” While this may be true for Ethereum, the most popularly used coin for trading NFTs, there are many other cryptocurrencies that are using the blockchain in new ways to reduce environmental impact.
Chia is leading the way for Green Crypto
One company leading the way in “green crypto” is Chia, an Andreessen Horowitz backed cryptocurrency founded by the inventor of torrenting, Bram Cohen. Chia is the energy-saving rival to Bitcoin. Chia launched its first coin, $XCH, on May 3rd, 2021. Momentum for Chia has already surged from an MFactor score of 1 in mid-April 2021 to a score of 19 on May 10th, 2021.
Chia Cryptocurrency MFactor. MFactor is a proprietary tool that measures cultural momentum through topic modeling and sentiment analysis.
Why is Chia surging in momentum?
It is flipping the industry on its head -- challenging previous methods and changing the perceptions of the industry to make crypto more green and sustainable.
What makes Chia different from Bitcoin?
Chia uses a less energy-intensive method for mining new coins called Proof-of-Space-and-Time (PoST), as opposed to Bitcoin’s Proof-of-Work (PoW). Both methods have a similar objective and outcome: confirm transactions and produce new blocks with the blockchain. The separate methods is the reason why Chia stands out as a leader in green crypto.
PoW is the original algorithm within the blockchain network, where miners compete against one another to solve complex mathematical problems to validate transactions on the blockchain network. A consistent criticism of PoW is that it is not productive. Miners that compete but lose a transaction waste energy. This contributes to a greater environmental impact from Bitcoin.
Proof-of-Space-and-Time (PoST) involves miners proving first that they can allocate unused hard drive space to store a transaction (Proof of Space), and are efficiently completing transactions which increases the security of the blockchain (Proof of Time). By instead focusing on security and opportunity, rather than creating competition for coins, PoST drastically reduces energy costs in comparison to PoW.