Eco-Friendliness of Currencies and Cryptocurrency
In a recent blog post published on Ripple’s official website, David Schwartz discussed the relationship between environment and cryptocurrencies, especially minable ones such as Bitcoin (BTC), Ethereum (ETH), and non-minable ones, such as XRP.
In the blog post, Schwartz stressed the state of energy consumption and production on earth, stating that the cryptocurrency industry leaders have to devise the means to reduce the rate of energy consumption in the ecosystem, in order to protect the environment for incoming generations.
XRP Is Inherently Green Currency unlike Bitcoin and Ethereum
In the blog post titled “The Environmental Impact: Cryptocurrency Mining vs. Consensus”, Ripple CTO compared Proof-of-Work and Consensus, two of the most notable mechanisms in the cryptocurrency space.
Both Bitcoin (BTC) and Ethereum (ETH) use the Proof-of-Work mechanism for mining digital tokens and transaction confirmation. On the other hand, the Ripple’s digital currency XRP cannot be mined like BTC and ETH, so, it uses Consensus mechanism to validate transactions on the XRP Ledger.
David Schwartz brought up a common discussion about the energy consumption of Bitcoin (BTC) and Ethereum (ETH), which says that Proof-of-Work (PoW) needs a huge amount of energy to allow miners to solve cryptographic puzzles that will generate new blocks and get rewarded in the form of the crypto they mined.
As shared by Ripple CTO in the blog post, Consensus is all about the establishment of super-majority agreement that allows the verification of XRP transactions, which also helps in preventing double-spending issues, with small quantity of electricity.
For the same reason that has been widely discussed within the crypto community, David Schwartz concluded that XRP is an inherently green currency since its total supply was created without mining, unlike Bitcoin (BTC) and Ethereum (ETH).