Which Cryptocurrency is the Most Environmentally Friendly?

The past decade has seen cryptocurrencies rise from relatively unknown fringe currencies to headline-hitting digital assets capable of shaking up the financial industry.

These currencies have recently become one of the most valuable assets on the planet, and experts predict that coming years could continue to see their usage surge. But while this is great news for investors, the rise of cryptocurrency isn’t completely without its downsides. 

One of the key problems of cryptocurrencies lies in the environmental impact that digital transactions have. The process of mining for bitcoin is particularly energy-intensive, due to the complex mathematical calculations that must be completed to create each and every new bitcoin.

Consider this on a global scale, and you might be surprised to hear that the amount of power needed to deal in cryptocurrencies is similar to that of a small country

With concern over the environmental impact of cryptocurrencies growing, increasing numbers of investors are looking for new ways to enjoy the benefits of digital currencies in more eco-friendly ways.

Of course, no two cryptocurrencies are the same – and this extends to the environmental impact of the currencies too. 

Here we have looked at the most environmentally-friendly cryptocurrencies available today, focusing on what experts are doing to limit the ecological damage that they might cause. 

What is a cryptocurrency?

The term cryptocurrency was relatively unheard of 10 years ago, but it’s since become widely recognised. It refers to forms of digital or virtual currencies which are based in the art of cryptography, using highly complex encryption algorithms.

They are designed to be incredibly secure, with virtually no chance of counterfeiting, these digital assets are resistant to inflation and easily portable. 

Bitcoin is perhaps the most famous form of cryptocurrency. The first decentralized cryptocurrency, Bitcoin was launched in 2009. The developer behind it is known as Satoshi Nakamoto, but this is a pseudonym. In fact, the real identity of its creator remains somewhat of a mystery, with several high profile scientists and engineers claiming that they were behind the world-famous digital currency. 

The difference between cryptocurrency and blockchain

Terms like cryptocurrency and blockchain are often used interchangeably, but they actually have quite different meanings. Blockchain is the very technology that cryptocurrencies rely on. It forms the basis of some of the best-known digital currencies in the world, such as Bitcoin. 

Bitcoin isn’t the only currency that uses blockchain technology, of course. Many virtual assets rely on this digital ledger. Using cryptography, blockchain links a huge list of records, which have since become known as blocks.

The information in each block can never be altered, because every block is linked through the data held within it. It’s this incredibly robust level of security which has led to blockchain-based currencies becoming so popular.

The growing popularity of cryptocurrencies

As cryptocurrencies have become more widely known, they have begun to be recognised by more organisations across the world. And this recognition has led to spiralling interest in the digital currencies, and a rapid rise in their value. 

Tesla CEO and Chairman Elon Musk recently announced that the company’s electric cars could be bought using Bitcoin, and that this Bitcoin would then be held by the company, rather than being immediately converted into a traditional currency. The announcement caused a huge surge in interest, and a significant rise in the value of the currency itself. 

Interest in cryptocurrencies remains high. Experts are predicting a steady rise for many of the best-known currencies over the coming months and years.

But the real question is, will cryptocurrencies transform the entire financial system in the future? These digital assets have been positioned to do exactly that, and many feel that such a feat is entirely possible. 

Why are cryptocurrencies typically bad for the environment? 

At first glance, digital currencies may not appear to pose much of a threat to the environment. But the real impact of dealing in cryptocurrencies is now emerging, and it paints a stark picture. 

Digital assets such as Bitcoin have a considerable environmental footprint, due to the amount of energy required to power the algorithms behind them. While this could theoretically be done using renewable energy, in reality it usually isn’t. China is a leading player in mining for Bitcoin, and 60% of the energy it uses to do so is powered by coal. 

Think about the enormous scale of cryptocurrencies, and the growing demand for Bitcoin mining, and you can see the problem. Currently, blockchain-based currencies are using as much energy as many small countries, yet their popularity continues to grow. And as demand increases, so too will the energy requirements of this industry. 

What is the Most Energy-Efficient Cryptocurrency?

While cryptocurrencies on the whole tend to be fairly damaging to the environment, some types of digital currency are known for having less of an impact than others.

Research compiled by TRG Datacenters, based in Houston, Texas has highlighted the most eco-friendly options, ranking them by the amount of energy required to power each transaction:


Kilowatt hour (KWh) consumed per transaction*













Bitcoin Cash






New eco-friendly cryptocurrencies on the horizon 

New cryptocurrencies continue to emerge, but there’s one trend that’s starting to cause a shift in the creation of digital assets: sustainability. 

A new wave of eco-friendly cryptocurrencies are gaining popularity. Ones that seek to limit the impact of transactions. Chia and IOTA (mentioned in the table above) are prime examples of this. The farming process for Chia doesn’t rely on the heavy processing power of mining and thus consumes less energy than other popular currencies (~ 0.023 KWh per transaction).

Similarly, IOTA uses an alternative to blockchain called the ‘Tangle’ which essentially removes the need for miners. Instead, the network is maintained by smaller devices and uses calculations that require less power and thus consume less energy per transaction (~0.00011 KWh). 

Another example is Nano, a digital currency network which shuns traditional mining practices in favour of a more eco-friendly solution. Nano seeks to eliminate the waste that’s usually associated with cryptocurrency transactions, using a more lightweight consensus protocol. Known as Open Representative Voting (ORV), the protocol promises minimal energy consumption and maximum efficiency. 

The next step for cryptocurrencies

With concern growing over the ecological impact of blockchain-based currencies, developers are increasingly turning their attention towards these newer ways of offering all the benefits of digital currencies, without the hefty carbon footprint.

As awareness of the power-hungry nature of many of the world’s best-known cryptocurrencies continues to grow, we can expect to see some big changes in both the practices of existing currency providers and the development and creation of new blockchain-based currencies. Keep an eye out for more eco-friendly digital currencies on the horizon – ones created with sustainability in mind.

Get Cryptocurrency Advice from TRG Datacenters

TRG believes in building towards a more sustainable future, that’s why we’re introducing a new way of thinking about data center design. Moving from grid-supported, to grid-suporting. As Chris Hinkle, CTO of TRG Datacenters, explains “Utilizing different generation methodologies allows for us to change how we think about our relationship with the grid.

Instead of designing data centers to be supported by the grid, we are now designing data centers to have a place supporting the grid – thereby cementing the role of compute as part of the grid as an ancillary service provider and contributor to the stability of the local community.”

Find out more here.


The data presented is approximate figures taken from external sources.

Any currencies that had conflicting KWh published in different sources were extensively cross referenced with the goal of seeing which number repeated itself the most in order to present accurate data. 

Some smaller currencies do not have as much information published around them, so the consumption per transaction was calculated using the data available (e.g. yearly consumption per transaction x and transaction number per day).

Any currencies that had no information published around their energy consumption were not included in the data set.