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How to Make Crypto Eco-Friendly & Sustainable

by Kamil S


After accepting Bitcoin payments for his Tesla cars, Elon Musk stepped away from this, wanting to reveal an important aspect of crypto. Elon made it clear that the switch was based on the environmental concerns of Bitcoin, saying he still believes crypto is moving forward and will accept BTC again when the environmental issue is solved. Fortunately, some of the roadblocks are already being addressed.

For now, the environmental cost, however, much like with mining for metal ores and diamonds, is consistent. But this is changing.

What Is Crypto and How It Is Evolving

In order to understand more about crypto and blockchain sustainability, let’s have an in-depth look at what the technology really is. For a lot of people, this information is well understood. But others still seem to have a hard time understanding the nature of decentralized finance. Crypto seems to be on par with the idea of using the metaverse for education and work. Few people understand it in its entirety, but a lot are excited about it.

Cryptocurrencies are stored in blockchains. So when someone says they have 5 tokens or coins, this means that their password can claim 5 tokens or coins on the blockchain. Unlike dollars and other currencies, crypto is purely digital. An important aspect is this – instead of being introduced into the economy by governments or central banks, they’re introduced through technological processes by volunteers around the world.

While you may be able to hold up a twenty dollar bill to the light to check its authenticity, it takes this decentralized system of users around the world using cryptography to verify transactions and maintain records.

Unlike traditional currencies which are regulated by sets of laws and practices, cryptocurrencies are largely unregulated. But this is changing and Coinmetro is actively working with regulators and governmental bodies across the world for a better legislative framework.

Right now, governments are taking note and are looking into regulating crypto and adopting the digital currency like El Salvador or the Central African Republic.

The speed and cost of making transactions using crypto is also much faster than using traditional currencies, taking a matter of minutes and a fraction of the cost instead of days.

Many cryptocurrencies also have a limited supply which is determined by an algorithm – this limit is 21 million tokens for Bitcoin. Traditional currencies are technically unlimited since governments can just keep printing more money to deal with fluctuations in the economy. This causes the governmental currencies to lose value and creates inflation.

Why does Crypto require so much energy? 

A single Bitcoin transaction requires roughly 1544 kWh from the computational network. For context, boiling 2 liters of water in an electric kettle uses on average 0.225 kw/h. So you could use your kettle 6862 times with that same amount of energy.

Why so much just for a single transaction? Because all of the computers connected to the blockchain have to verify each transfer so that the legitimacy of said transaction is ensured. This is what makes crypto so secure. It’s decentralized, so it’s extremely hard to hack, unlike a central banking system.

This isn’t even the main energy drain with crypto, however. The most energy intensive aspect is the primary method of mining coins. This is known as Proof-of-Work. In order to mine for coins or tokens, “miners” use computational power to solve complex puzzles of individual blockchains.

This is supposedly what makes Bitcoin so democratic – the fact that anyone with the right equipment can take part in mining and compete with others for the cryptocurrencies. However, you have to be able to afford the equipment in the first place to be able to take part in this aspect of crypto.

Miners need to find the block’s matching “key” – a code written by an algorithm. They then match their guesses to the block until they find the correct code line. This is really intensive work requiring hyper-efficient processing units. A lot of these processors have short lifespans and leave e-waste when they stop working – often after about 1.5 years.

So not only is the process energy-intensive, but the equipment used for it doesn’t last long either. And several miners are competing with each other for the same crypto tokens, so they’re each expending a lot of energy but only one gets each token.

Lowering the Carbon Footprint of Crypto

Simply put, crypto needs to become more eco-friendly. Going green is also one of the top sales enablement tools in the current climate – people are waking up and want to support eco-friendly initiatives.

There are a few ideas undergoing test case preparation and execution that we will cover here. Let’s start with the heavy hitter – Proof-of-Stake.


One option that is currently being embraced by more and more crypto institutions is the Proof-of-Stake method, which is much less energy-intensive than Proof-of-Work. PoW is what we call the verification process involving all of those computers around the world. PoS, on the other hand, offers security through a node system, making it a more environmentally friendly and sustainable choice, much like the Quant's PoS protocol.

With PoS, the users involved in verifying blockchains must create a node which can be run by a team or an individual. The node proves it is trustworthy by storing a particular number of crypto tokens, which are the same type generated by the blockchain being verified. It’s like putting money into a security bond. This is what is meant by ‘staking’.

For each group of transactions to be verified, one node is selected to do this by an algorithm which both rewards those with more tokens staked and prevents one node from getting too much control over the process. After that, the other nodes get to make sure that everything looks correct. If there is a mistake, the offending node is punished by having some or all of their staked tokens destroyed. If everything looks normal, then that node is rewarded with more tokens. This is how PoS offers security and motivates participation.

PoS is much more energy efficient than PoW. The whole process uses marginally more energy than a single computer – so potentially more than 99% more energy-efficient than proof of work. It can also be conducted from a laptop and the nodes are virtual spaces rather than physical equipment.

In theory, this means that a lot more people can participate in the process, making it even more democratic. This is one of the main aims of crypto – decentralized finance. The recent Ethereum Merge is a big step forward in this direction.


Proof-of-Authority works in a similar way to PoS. The difference between them is that validators are approved to validate transactions on the basis of their reputation in the market rather than by how many coins or tokens they possess. Also, they are not allowed to verify consecutive blocks. It’s a bit more of a meritocratic system than PoS and also much less energy-intensive than PoW.


Proof-of-Space allows the crypto mining to be conducted using smaller and more efficient hard drives instead of the huge processors used for PoW. You may have heard about the shortage in laptops and phones recently – this is one of the reasons behind it. A surge in demand for these hard disks for crypto meant there were much fewer to go around for other parts of the market.

Which cryptocurrencies are adopting these practices? Several cryptocurrencies have decided to adopt this, Ethereum being one of the most influential. Another one –  Stellar – is a crypto currency that purports to have a shorter and faster authentication cycle than most others.

Tron is a not-for-profit organization and public blockchain which supports most programming languages. It is decentralized, with a two-tier model of Super Representatives and Super Representative Partners (block producers in the TRON network), which every account holder can apply to become. As a peer-to-peer (P2P) network for transferring apps, it uses very little energy. It also uses pre-mining, which is more ecofriendly than regular mining.

Avalanche also uses PoS, along with Tezoz which has the ability to perform PoS. In fact, between 2020 and 2021, Tezoz purportedly managed to reduce their energy consumption per transaction by 30%.

Algorand is a blockchain and cryptocurrency that was designed not to involve mining in order to create a carbon-negative network and improve sustainability. Algorand manages to offset its small carbon footprint in partnership with ClimateTrade (a company offering emissions offsetting services).

The real work for a greener, eco-friendly crypto space only now truly begins. We have a long way to go, and perhaps EU crypto regulations will help. We can say that with the recent Ethereum Merge a new era in blockchain and crypto is taking shape and other actors in the space will follow suit. Crypto is here to stay and with the right, sustainable framework it will truly scale to serve everybody, everywhere.

Grace Lau – Director of Growth Content, Dialpad

Grace Lauis the Director of Growth Content atDialpad, an AI-powered cloud communication platform for better and easier team collaboration. She has over 10 years of experience in content writing and strategy. Currently, she is responsible for leading branded and editorial content strategies, partnering with SEO and Ops teams to build and nurture content. Grace Lau also published articles for domains such asUpCityandSoundstripe.


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