Much has been made of the Bitcoin network’s colossal energy consumption over the past few years, as its ‘Proof-of-Work’ protocol has become outdated in today’s world. To remedy this, other innovative projects have begun appearing in the crypto market, looking to offer a ‘greener’ solution.

This guide provides an overview of the most energy-efficient cryptocurrency projects, discussing what they are and how they’re helping the environment before presenting several reasons why energy-efficient cryptos are so important. 

The 8 Most Energy-Efficient Cryptocurrency Projects in 2022

Many of today’s top trending cryptos highlight their energy consumption, as this has become a hot topic in the market. Below are eight of the lowest energy crypto projects to be aware of – each of which will be discussed in the following section.

  1. Ethereum (ETH)Overall Most Energy Efficient Cryptocurrency for 2022
  2. Hedera (HBAR)Best Energy Efficient Cryptocurrency Alternative to Blockchain
  3. Ripple (XRP)Lowest Energy Cryptocurrency in the Decentralized Payments Niche
  4. Chia (XCH) – New Blockchain Project with Low Cryptocurrency Energy Consumption
  5. Algorand (ALGO) – Carbon Negative Layer-1 Blockchain Network
  6. EOS (EOS) – Lowest Energy Crypto with High Throughput
  7. Cardano (ADA) – Best Crypto by Energy Consumption for dApp Developers
  8. IOTA (MIOTA) – Scalable Network with New and Exciting Energy-Efficient Partnerships

Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.

A Closer Look at the Most Energy Efficient Cryptos to Invest in

Producing electricity for crypto projects with a high energy expenditure results in vast amounts of greenhouse gases being emitted into the atmosphere. This process contributes to the ever-growing problem of global warming – which is why crypto with low energy consumption has become increasingly popular in today’s market.

With that in mind, let’s dive in and explore the eight energy-efficient cryptocurrency projects listed above, discussing how they positively impact the environment.

1. Ethereum (ETH) – Overall Most Energy Efficient Cryptocurrency for 2022

ETH logoThose who invest in cryptocurrency regularly will need no introduction to Ethereum, as it looks to transition to a low crypto energy consumption approach. At the time of writing, Ethereum still relies on a ‘Proof-of-Work’ (PoW) protocol, which is very energy intensive, yet is in the process of switching to ‘Proof-of-Stake’ (PoS).

This switch, dubbed ‘the Merge’, will drastically reduce Ethereum’s energy consumption. According to Ethereum.org, the network’s energy use will drop by an incredible 99.95% once it transitions to a PoS consensus protocol.

Ethereum energy

This will ensure Ethereum becomes an environmentally energy-efficient cryptocurrency since it will no longer rely on ‘mining’ to validate transactions. In turn, this removes the need for power-hungry mining equipment, drastically reducing Ethereum’s contribution to CO2 emissions.

Furthermore, this transition to an energy-efficient energy crypto will enable validators to verify transactions using everyday devices like laptops and PCs. Due to this, Ethereum is likely to be one of the best proof-of-stake coins over the long term.

Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.

2. Hedera (HBAR) – Best Energy Efficient Cryptocurrency Alternative to Blockchain

HBAR logoHedera was one of the best emerging cryptocurrency projects of 2021, as it occupies a unique position within the crypto market. The vast majority of cryptocurrencies rely on blockchain architecture to verify transactions – yet Hedera takes an entirely different approach.

This safe energy crypto still offers a publicly-viewable ledger, yet instead of ‘blocks’, Hedera uses a ‘hashgraph’ to verify transactions. This technology was created by co-founder Leemon Baird, meaning Hedera is the only network in the entire market that operates this way.

Hedera energy stats

Hedera aims to be the crypto that uses the least energy through this approach since it does away with the concept of mining that the best proof-of-work coins rely on. What’s more, Hedera has also committed to carbon-negative network operations by regularly buying carbon offsets. The network’s team even makes the related certificates available to view, ensuring a great deal of transparency.

Removing crypto mining energy consumption and actively purchasing carbon offsets makes Hedera one of the most energy-efficient crypto projects on our list. Combine this with the network’s ability to handle 10,000 transactions per second (TPS), and it’s clear why Hedera is attracting so much attention.

Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.

3. Ripple (XRP) – Lowest Energy Cryptocurrency in the Decentralized Payments Niche

XRP logoRipple was considered one of the most promising cryptocurrencies in the mid-2010s due to its revolutionary take on payment processing. As most will be aware, traditional bank payments can sometimes take up to five business days to settle and tend to be costly. Ripple offers a solution that enables payments to be completed in seconds.

Moreover, Ripple’s fee for facilitating these transactions works out at less than a fraction of a cent. Transactions are verified through a unique consensus protocol, whereby most validators must okay a transaction before it can be added to the ledger.

Ripple energy stats

Through this process, Ripple has emerged as a cryptocurrency that uses less energy than most. The XRP Ledger website also notes that this move to digital cash removes all of the negative aspects of physical money, such as eutrophication, photochemical ozone creation, and greenhouse gas emissions.

To highlight that it is one of the top energy-efficient cryptos, Ripple also has a dedicated ‘Carbon calculator’ on its website that showcases the network’s energy consumption relative to Bitcoin and Ethereum. For example, ETH consumes 2.57 billion kWh of energy annually, while Ripple only consumes 474,000.

Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.

4. Chia (XCH) – New Blockchain Project with Low Cryptocurrency Energy Consumption

Chia logoOne of the most eco-friendly crypto projects to emerge over the past year is Chia. Chia is a blockchain network that uses an energy-efficient crypto mining alternative called ‘Proof-of-Space-and-Time’ to verify transactions.

This consensus protocol utilizes unused space on network participants’ HDDs and SDDs to secure the network. Owners of these devices, called ‘farmers’, write 100GB ‘plots’ on them, which are filled with hashes. Then, when a new block is added to the network, the user with the closest hash match ‘wins’ the associated validation reward.

Chia blockchain

Through this process, Chia drastically reduces its energy consumption compared to Bitcoin’s. What’s more, Chia has also become part of the Circular Drive Initiative (CDI) which aims to enable and promote the secure reuse of storage hardware.

These characteristics made Chia one of the best energy-efficient crypto networks for those looking to make cross-border payments while remaining anonymous. Investors can buy XCH tokens from many of the best altcoin exchanges to gain exposure to the network’s growth.

Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.

5. Algorand (ALGO) – Carbon Negative Layer-1 Blockchain Network

ALGO logoAlgorand looks to become the most energy-efficient cryptocurrency on the market through its pledge to remain carbon negative. For those unaware, carbon negative means that the network emits less than zero CO2 – meaning it effectively ‘removes’ carbon dioxide from the atmosphere.

Algorand achieves this by partnering with companies like ClimateTrade, which helps the network offset CO2 emissions. What’s more, ClimateTrade also enables Algorand to sponsor climate change projects worldwide.

Algorand climate change partnerships

These projects include The Southern Cardamom REDD+ project and the Oaxaca Wind Project by ACCIONA – two initiatives that are actively involved in reducing global warming. Furthermore, since Algorand is a ‘Pure Proof-of-Stake’ chain, it removes the adverse effects of crypto mining energy consumption.

Environmentally-conscious investors who typically invest in Bitcoin may wish to consider Algorand since the network can handle 6,000 TPS, whereas Bitcoin can only facilitate five. Algorand also has immediate transaction finality, making it one of the most efficient blockchains.

Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.

6. EOS (EOS) – Lowest Energy Crypto with High Throughput

EOS logoAnother crypto with low energy consumption to be aware of is EOS. EOS was one of the best ICO cryptos of 2018, raising a staggering $4 billion for the project. The network’s main feature is its ‘feeless’ transactions, a unique proposition within the market.

EOS’s network, called EOSIO, also offers smart contract functionality and can handle around 4,000 TPS. Interestingly, EOS also uses the C++ language for its smart contracts, meaning programmers and developers can use their existing knowledge to create dApps.

EOS energy expenditure

The development team prides itself on being the world’s first major carbon-neutral blockchain, thanks to its Delegated Proof-of-Stake (DPoS) consensus algorithm. This energy-efficient crypto mining alternative means that EOS’s CO2 emissions are less than 0.01% of Bitcoin’s.

EOS also works with ClimateCare to calculate the network’s CO2 emissions. The network’s team selects CO2 offset projects to make EOS ‘green’. As such, this energy-efficient crypto cryptocurrency offers a viable alternative the power-hungry networks like Bitcoin.

Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.

7. Cardano (ADA) – Best Crypto by Energy Consumption for dApp Developers

ADA logoAnother of the top energy-efficient cryptocurrency projects to consider is Cardano. Cardano is a smart contract blockchain that enables developers to create dApps. Due to its reliance on peer-reviewed literature, Cardano has become one of the most respected networks in the space.

But what makes this an energy-efficient energy crypto? Like many other projects on our list, Cardano uses a PoS mechanism to achieve consensus. As we’ve highlighted, this removes the need for mining and reduces electricity consumption.

Cardano eco-friendly

However, Cardano takes things one step further by releasing its annual sustainability report to the public. This presents the network’s commitments to targeting net zero emissions, its sustainable investing approach, and the plans for the future to ensure Cardano remains sustainable.

Moreover, Cardano incorporates ESG risks and opportunities into all of the team’s investment propositions, ensuring that all the projects invested in do not contribute to global warming. This approach ensures Cardano remains an environmentally energy-efficient cryptocurrency over the long term.

Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.

8. IOTA (MIOTA) – Scalable Network with New and Exciting Energy-Efficient Partnerships

IOTA logoRounding off our discussion of energy-efficient cryptocurrencies is IOTA. As its name suggests, IOTA is inherently involved in the ‘Internet of Things’ (IoT), which refers to the communication between all devices connected to the internet.

IOTA looks to solve the scalability issues inherent in this area, which requires a network that can handle millions of transactions simultaneously. The network does this through ‘The Tangle’ – which doesn’t require any mining activity.

IOTA blockchain

Although it’s not a new cryptocurrency project, IOTA has attracted attention due to its recent partnerships. These include the link with ClimateCHECK, which helps streamline the digitization of data related to climate actions. Through this and other collaborations, IOTA remains one of the leading projects actively attempting to help the environment.

Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.

What Makes a Cryptocurrency Energy Efficient?

Sustainable projects often make the best long-term crypto investments since their positive impact on the environment will likely be extremely valuable in the years ahead. Buy what actually makes a cryptocurrency ‘energy efficient’?

To understand how crypto can become energy efficient, it’s crucial to provide some context. Most of the discussion surrounding crypto’s impact on the environment is related to Bitcoin and its vast energy expenditure. This is slightly unfair, as it disregards the positive impact made by hundreds of other cryptocurrencies.

Bitcoin energy stats

Having said that, Bitcoin’s energy expenditure is undoubtedly a big problem. According to Forbes, Bitcoin consumes electricity at an annualized rate of 127 terawatt-hours (TWh). This exceeds the annual electricity consumption of the entire country of Norway.

However, the crypto with the least energy consumption looks to remedy this by taking a different approach than Bitcoin. The most common change is using an alternative to the PoW consensus mechanism. Although PoS is the most-used alternative, some networks use unique techniques – such as ‘Proof-of-Space-and-Time’ and ‘Proof-of-History’.

PoS blockchain

By taking this approach, many of the best cryptos to trade can reduce their energy expenditure since they don’t need to rely on mining to validate transactions. This removes the need for extensive computing hardware, which consumes enormous amounts of electricity annually.

In addition, networks that use an alternative to the PoW mechanism are much more accessible to the masses from a validation perspective. With Bitcoin, validators must own expensive pieces of hardware to participate in the mining process. However, networks that use other consensus mechanisms allow validators to use ‘normal’ pieces of hardware, such as laptops or PCs. 

Why Energy Efficient Crypto is Important

Those wondering how to invest in blockchain will likely be primarily concerned with capital gains. However, energy-efficient crypto projects can often provide these capital gains whilst also giving back to the environment. With that in mind, let’s take a look at some reasons why this area of the crypto market is so important:

Helps Reduce Carbon Dioxide Emissions

Naturally, the main reason that energy-efficient cryptocurrencies are essential is that they reduce the amount of CO2 being pumped into the atmosphere. This is a direct contributor to global warming, leading to many dire consequences – such as melting the polar ice caps.

CO2 emissions data

If more and more crypto projects focus on ‘green’ technology, we’ll likely see a shift away from energy-intensive approaches like PoW. As a result, these ‘green’ networks will naturally become more valuable – providing a financial incentive for their teams to remain sustainable.

Provides an Option for ESG-focused Investors

ESG-focused traders wondering how to invest $5,000 (or any amount) in the crypto market have historically been constrained to a select few projects. This has begun to change as more energy-efficient crypto projects are launched that offer a viable option for this demographic.

The cryptocurrency that uses less energy than most is an attractive investment prospect since these projects are likely to be long-lasting. This makes them appealing to ESG-focused investors with a long-term investment horizon.

Brings Corporations and Individuals Together

Finally, these crypto projects help unite individuals and corporations to meet a common goal. Traditionally, both of these groups rarely interact in a meaningful way – mainly because corporations are inherently focused on their bottom line.

However, it doesn’t have to be this way. Exciting new projects, such as the one aim to foster collaboration between individuals and businesses for the good of the world. Algorand is a leader in this regard, as its partnership with ClimateTrade looks to offset the network’s carbon emissions.    

Improves the Reputation of the Crypto Market

Energy-efficient cryptos are crucial to improving the reputation of the broader crypto market. Those who buy cryptocurrency regularly will understand that many mainstream media outlets take any chance they can get to persecute the crypto market.

The narrative recently by some outlets is that ‘all’ crypto projects are harmful to the environment, so the public should avoid them if they can. However, this narrative can be shifted if energy-efficient cryptos become ‘the norm’, improving the market’s reputation overall. 

How to Find Energy Efficient Cryptocurrencies

Identifying the crypto that uses the least energy can be challenging – especially given how saturated the cryptocurrency market is. To help with this, detailed below are some top strategies that investors can utilize to uncover these cryptos:

Look for Partnerships and Collaborations

Many energy-efficient cryptos will partner with leading organizations to combat climate change. This is a tell-tale sign that the crypto project aims to be sustainable, as the team will be actively using its resources for the good of the environment.

What’s more, these partnerships often benefit both parties, since they raise awareness of their missions. Due to this, high-profile collaboration announcements tend to be a great way to identify energy-efficient cryptos. 

Check Out the Project’s Roadmap

The project’s roadmap is also a great way to identify whether it can be considered energy efficient or not. For those unaware, crypto projects will usually present their roadmaps on their website, detailing the plans they have for the future.

Many leading networks, such as Algorand and Cardano, emphasize being sustainable and becoming carbon neutral (or carbon negative). Thus, by seeking out similar projects, investors can be sure that they’re investing in projects that positively affect the environment. 

Research the Underlying Technology

Crypto news sites are constantly discussing the latest technological advanced in the crypto market – most of which are focused on increasing throughput and boosting security. However, more focus is now being placed on innovations that offer these two benefits whilst also helping the environment.

As previously discussed, PoS chains are perhaps the most high-profile innovation in this regard. However, other technologies, such as the ‘hashgraph’ innovation from Hedera, have also emerged as viable alternatives to the standard approach.

Use Social Media

Twitter logo

Finally, many of the best Twitter crypto accounts regularly present updates on new and exciting innovations within the market. Although these updates focus on cryptocurrencies experiencing substantial value increases, they can often highlight sustainable projects for investors to consider.

This is also the case with the best TikTok crypto accounts, which provide crypto-based information to the masses. By using these two resources, investors can identify which projects are actively trying to reduce their CO2 emissions and which aren’t.

Most Energy-Efficient Cryptocurrency – Conclusion

In conclusion, this guide has discussed the most energy-efficient cryptocurrency projects on the market right now, highlighting what they are and how they are making a positive impact on the environment.

Investors looking to gain exposure to the most energy-efficient cryptocurrency projects can do so using eToro. Many of these projects, such as Ethereum, Cardano, and Algorand, can be invested in from just $10 per position. What’s more, eToro charges a simple 1% fee on all buy and sell orders (plus the market spread), making all costs full transparent.

eToro logo

Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.

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Disclaimer

It is vital to always invest responsibly in awareness of all risks involved. Markets can be extremely volatile, so you should conduct extensive research before investing. Our site provides regular updates and diligently verifies all platforms it recommends, but you should form your own opinion and invest only what you can afford to lose. There is never any guarantee of a return on investment.