Energy consumption during the crypto mining process has come under scrutiny in recent years for not being energy efficient. As electricity consumption rose, so did the concern for a more sustainable method – enter eco-friendly crypto.

These options aim to mitigate carbon emissions to lower the carbon footprint of blockchain technology. These cryptos use various methods to reach an environmentally-friendly status.

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What Makes a Cryptocurrency Eco-Friendly?

What Makes a Cryptocurrency Eco-Friendly?

In older blockchain consensuses such as Ethereum‘s original version, they utilized the proof-of-work (PoW) consensus protocol, which requires computational resources and energy usage to generate a new block on the blockchain.

Now, Ethereum and many other blockchains have evolved into a proof-of-stake (PoS) blockchain consensus, that requires individuals to stake crypto to add a new block to the chain and randomly chooses validators to confirm transactions. The process is more streamlined and faster than PoW.

Blockchain sustainability impacts the eco-friendliness of the native coin and the projects within it. Blockchain projects continuously look for ways to limit their environmental impact and shrink their carbon footprint.

The energy source used to validate crypto transactions can also make a cryptocurrency more energy efficient. For example, options that rely on renewable energy sources are considered more environmentally friendly.

Just like many retail companies, cryptocurrencies can also take advantage of carbon credits or carbon offsets.


  • Consensus mechanism
  • Energy efficiency and conservation
  • Carbon offsetting
  • Energy source

Benefits of Investing in Eco-friendly Cryptocurrencies

Benefits of Investing in Eco-friendly Cryptocurrencies

Aside from the obvious advantage of limiting the environmental impact, what other benefits do environmentally-friendly cryptocurrencies bring?

  1. It provides the opportunity for carbon-neutral innovation
  2. The perfect option for ESG-oriented investors to get into the crypto space
  3. Mitigate greenhouse gas emissions and other harmful pollutants
  4. Provides a positive brand image for investors and companies
  5. Certain environmentally-friendly cryptocurrencies have lower to no transaction fees
  6. Many of these cryptocurrency blockchains are highly scalable

There are plenty of benefits pertaining to eco-friendly crypto, and regulatory and legal factors that could make adoption easier. These include:

  1. Government environmental regulations
  2. Taxation incentives
  3. Legal status that embraces more eco-friendly crypto
  4. Higher market demand from users for sustainable crypto

10 Best Eco-Friendly Cryptocurrency to Invest in

10 Best Eco-Friendly Cryptocurrency to Invest in

Polkadot (DOT)

Polkadot also brings another type of consensus to the industry known as NPoS (Nominated Proof-of-Stake). With this, we see the token holders have control over who to nominate for the validation process. From this pool of validators, a few are selected according to various criteria including community reputation and the number of $DOT they hold.

Polkadot aims to be eco-friendly, and sustainable and promotes cross-chain interoperability.

Algorand (ALGO)

Founded by Silvio Micali, Algorand blockchain, with the native token ALGO, is among one of the most eco-friendly cryptocurrency options. Not only is the blockchain PoS, but it is PPoS, or Pure Proof of Stake, which means it guarantees that each transaction only consumes 0.0000004 kg of CO2.

When calculated annually, this puts ALGO’s energy consumption at about the same amount as under 10 households, whereas a PoW blockchain’s annual energy usage roughly equals the country of Sweden.

Cardano (ADA)

Cardano is another reputable green chain with ADA as its eco-friendly crypto. It remains one of the largest PoS chains and Charles Hoskinson, the founder of Cardano, aims to utilize the platform to work towards solving global issues and to take steps to become carbon negative.

Notably, Cardano has taken efforts to use renewable energy sources and launch initiatives to offset carbon emissions.

Hedera (HBAR)

Hedera, or crypto HBAR, uses “hashgraph” a method for consensus that is more energy efficient and sustainable. As for data centers, Hedera uses Google Cloud, which completely relies on renewable energy.

The network also happens to be carbon neutral thanks to the carbon offsets the team commits to.All of this and using an acyclic graph (DAG) to maintain its consensus protocol is what makes Hedera a green crypto.

Tezos (XTZ)

The Tezos network as a whole already has impressively low energy consumption, equating to just under 20 people in average households annually. Furthermore, we see XTZ use LPoS, or Liquid Proof-of-Stake for blockchain validation. LPoS is much more eco-friendly compared to traditional PoW chains.

Chia (XCH)

We have seen PPos, and LPos, how many more versions and renditions of PoS consensus algorithms are there? Well, Chia has another one under the name PoST (Proof of Space and Time). This unique protocol uses hard drive space and time for validation rather than computational power.

What’s important in Chia’s case is an individual’s hard drive space and time committed rather than power usage. Another reason why PoST makes Chia green is its consensus algorithm makes it possible to recycle and reuse extra hard drive space. The company is also a member of the SDG Data Alliance, further committing to an eco-friendly brand.

Nano (XNO)

Nano is a little different than regular blockchains. Instead of a chain, it is made up of individual blocks that create an interconnected grid. The energy requirements to run transactions on each block can be sustained by a regular computer.

Solarcoin (SLR)

Say hello to a chain focused on solar technology. With more and more of the global population embracing the benefits of solar power, Solarcoin has dedicated itself to boosting this cause. The purpose behind this ambitious project is to make solar power free for those who invest.

When users install solar panels, the energy created will be rewarded with $SLR. When the value of the coin becomes higher than the cost, then the goal of the project is realized.

Stellar (XLM)

The Stellar Consensus Protocol (SCP) does not require much computational power. It works by having the nodes in its ecosystem rely on each other for validation. This greatly reduces the amount of energy needed to process transactions and reach consensus.

XLM also optimizes cross-border payments to make them faster and without the high fees. Stellar Development Foundation promotes sustainability within the blockchain industry, making XLM one of the most eco-friendly cryptocurrencies.


IOTA has a blockchain algorithm referred to as “Tangle”. The consensus is highly scalable, eco-friendly, and sustainable – the perfect option for IoT (Internet of Things) devices. With no mining and no transaction fees for devices that operate with low energy, the IOTA platform is definitely classified as “green”.


As you can see, there are quite a few environmentally-friendly cryptocurrency options for crypto investors all with energy-efficient consensus algorithms. Many of these chains have investment opportunities that extend beyond just the technology and aim to help solve real-world issues concerning the environment. As crypto evolves, we can expect blockchains to take more steps to become less energy intensive.

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