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Eco Coin Index

Eco Coin Index

Investors and governments are growing increasingly concerned about the environmental impact of cryptocurrencies. For example, both China and Kazakhstan have banned crypto mining as a result of the huge amounts of electricity required, which is mostly generated by fossil fuels. As a result, investors are turning to more eco-friendly crypto coins which have skyrocketed in popularity and value over the past year.

But which low carbon coins performed the best in 2021? We’ve dived into the data to find out the eco coins with the highest value by market capitalisation as well as the most sustainable coins according to Co2 emissions and electricity consumption. We’ve also provided some tips on how to cut your crypto carbon footprint, without sacrificing the earth.

The highest valued eco coins

1. Cardano

Market cap: £29,013,619,221

Taking the top spot for the highest valued eco-friendly crypto is Cardano. Cardano functions mainly as a digital currency through its token ADA and had a market cap of £29,013,619,221 in 2021. The Cardano blockchain, like many other eco-friendly cryptocurrencies, operates on a proof-of-stake mechanism, a greener alternative to the power-hungry proof-of-work protocols used by Bitcoin and Ethereum.

2. Polkadot

Market cap: £22,755,198,469

In second place with a 2021 market cap of £22,755,198,469 is Polkadot. Like many other altcoins, it has a low carbon footprint thanks to its blockchain’s proof-of-stake protocol. Created in 2020 this project is a multi-channel network designed to bridge the gap between previously incompatible blockchains.

3. Ripple

Market cap: £19,065,606,183

The digital payment network and cryptocurrency Ripple takes third place with a market cap of £19,065,606,183 in 2021. Ripple is an eco-friendly alternative to Bitcoin as its total supply has already been mined and the company behind it is committed to being carbon neutral by 2030.

The coins with the lowest Co2 emissions

1. Fantom

Annual Co2 emissions: 7 tonnes

Taking the top spot for the cryptocurrency with the lowest Co2 emissions is Fantom, with only 7 tonnes produced annually. Thanks to its super-fast transaction times and energy-efficient software, Fantom’s carbon emissions are negligible compared to crypto giant Bitcoin’s whopping 114 megatonnes annually.

2. Terra

Annual Co2 emissions: 20 tonnes

Terra comes second for the least carbon emissions, with only 20 tonnes of Co2 released by the cryptocurrency every year. The cryptocurrency was created in 2018 as a solution that bridges the gap between fiat and cryptocurrencies, combining price stability and growth potential. Like many other eco-friendly coins, Terra avoids the energy-intensive calculations that can harm the environment and burn out machines, causing unnecessary e-waste.

3. Stellar

Annual Co2 emissions: 37 tonnes

In third place for the least polluting cryptocurrency is Stellar. This cryptocurrency network focuses on enabling payments and loans in developing countries without charging people for using it. The cryptocurrency only emits 37 tonnes of Co2 every year thanks to its consensus protocol, which only uses a small number of trusted nodes to approve transactions. This cuts down on energy use and speeds up transaction times.

The coins using the least energy annually

1. Cardano

Kilowatt-hours per year: 48,851

Taking the top spot in our ranking for the most eco-friendly coin according to electricity consumption is Cardano, which only uses 48,851 kilowatt-hours per year. Whilst crypto giants, Bitcoin and Ethereum use enough electricity to power a small country through their proof-of-work protocol, Cardano uses a proof-of-stake mechanism, making mining less competitive and more energy efficient.

2. Algorand

Kilowatt-hours per year: 70,237

In second place is a relatively new cryptocurrency launching in 2019. Algorand only uses 70,237 kilowatt-hours per year, thanks to the fact it cannot be mined. Instead, investors in Algorand earn passive rewards simply for holding the cryptocurrency. Algorand has also partnered with the organisation ClimateTrade in an effort to make its blockchain fully carbon neutral.

3. Avalanche

Kilowatt-hours per year: 113,249

Avalanche takes third place for cryptocurrencies with the smallest electricity consumption. Like the top two, Avalanche also uses proof-of-stake protocols making it energy-efficient.

Avalanche is also far more efficient than older cryptocurrencies as it can facilitate roughly 4,500 transactions a second, compared to Ethereum’s 14.

For Design: Energy Use Wh Per Transaction Data tab

The coins using the least energy per transaction

1. IOTA

Watt-hours per transaction: 0.0016

IOTA is the most energy-efficient cryptocurrency per transaction thanks to its innovative distributed ledger technology known as Tangle. Tangle does not rely on blockchain technology and instead of miners competing to verify transactions, all parties verify transactions simultaneously, drastically cutting the energy expenditure of the network.

2. MetaHash

Watt-hours per transaction: 0.0027

Taking second place is MetaHash. This proof-of-stake cryptocurrency can be mined with fairly low-grade hardware, using a lot less energy than traditional proof-of-work cryptocurrencies. This is made possible by multiple proof-of-stake mechanisms operating simultaneously, increasing its energy efficiency.

3. Tezos

Watt-hours per transaction: 0.028

Taking third is Tezos. Thanks to its flexible design and ability to evolve through its governance mechanisms, the energy efficiency of this cryptocurrency increased by 70% per transaction between 2020 and 2021. The estimated electricity requirement for transactions also decreased by 30% during this time.

How to cut your crypto carbon footprint

Many investors see cryptocurrency as a great way to protect against skyrocketing inflation when interest rates remain low. But with the exponential growth of ethical investing, some cryptocurrencies are increasingly coming under scrutiny for the amount of energy they use to operate. With this in mind here are some tips to cut your crypto carbon footprint without sacrificing profit.

If you are willing to move away from more established energy-intensive cryptocurrencies like Bitcoin, investing in newer eco-friendly alternatives is an increasingly viable option. These smaller projects often outperform Bitcoin in terms of growth. Cardano for example has a growth rate of 184.9%, marginally outperforming Ethereum’s 183.7% and over 100% more than the most popular and carbon-intensive currency, Bitcoin.

One way to shrink your environmental impact is to invest in blockchain companies that focus on clean energy goals. The blockchain company Efforce, for example, invests in energy-efficiency projects, tokenises the energy saved as the cryptocurrency WOZX and distributes a share of these tokens to investors.

Investing in cryptocurrencies that use proof-of-stake protocols can also cut down your carbon footprint. Proof-of-stake uses far less computing power than other protocols as there are fewer participants in the network, meaning less energy is used and less e-waste is generated to validate transactions.

You can also cut their carbon footprint by putting their money into carbon offset tokens. Connecting carbon offsetting to cryptocurrency tokens means you can buy carbon credits from companies in order to fund carbon recapture projects. These offsets for cryptocurrencies could drive up demand and prices, meaning more money for investors and carbon reduction initiatives.

Methodology

We wanted to find out the highest valued eco coins, beginning by compiling a list of the most sustainable cryptocurrencies from list articles. We then found the total value of these cryptocurrencies from their market caps in 2021 according to Coin Market Cap to find the highest valued eco coin.

As the information on electricity consumption and carbon emissions could not be found for all of the eco coins they were ranked separately on each factor. Total annual electricity consumption is measured in total kilowatt-hours per year according to the Crypto Carbon Ratings Institute and list articles. Energy use per transaction is measured in Watt-hours and was taken from the Crypto Carbon Ratings Institute and list articles.

CO2 emissions each coin produces annually in tonnes were sourced from Green Crypto Research.

Tips on reducing your crypto carbon footprint were taken from The PLOS.

Average growth rates, the average rise in value since 2014, according to Ycharts and correct as of 05/04/2022.

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