The current global heat wave has sparked all kinds of talk about a climate emergency. This is potentially big news not only for industries that have been directly linked to climate change – like the oil and gas industry – but also for industries that are only tangentially linked, like crypto. After all, crypto is increasingly scrutinized by regulators for its power consumption habits. Therefore, it is time to think about climate-proofing your crypto portfolio.
The best place to start is with a green and environmentally friendly cryptocurrency like gimbal (ADA -6.02%), which also happens to be one of the top 10 cryptocurrencies in the world by market cap. Even before the latest climate debate started, it was proud of its environmentally friendly blockchain and commitment to sustainability. As a result, Cardano is uniquely positioned to weather a climate emergency.
A new type of regulatory risk
The crypto industry has always operated with a high degree of regulatory risk. But now he faces a new one. For example, what happens if regulators and other government agencies start issuing climate-related executive orders to regulate, restrict or restrict certain industries? In mid-July, for example, the European Central Bank (ECB) warned that it could ban Bitcoin (BTC -3.78%) mining as part of a wider effort against fossil fuels. It could also introduce carbon taxes on crypto transactions. The ECB has compared Bitcoin to a “fossil fuel car”, based primarily on Bitcoin’s well-known energy consumption problem.
As a result, the race is now on to prove its green credentials and avoid the wrath of government bureaucracy. Bitcoin miners, for example, are now struggling to prove that they are not dependent on fossil fuels for their energy. They certainly don’t want regulators to think that Bitcoin mining has anything to do with traditional coal mining! And some cryptocurrencies are now making “green blockchain” a central part of their marketing efforts. Algorandfor example, now claims to have a carbon-negative blockchain.
Cardano is environmentally responsible
By almost every criteria, Cardano is one of the most environmentally friendly and sustainable cryptocurrencies out there. Unlike Bitcoin, which uses proof-of-work to solve complex mathematical problems and receive new coins, Cardano is proof-of-stake, where users pledge their coins for the right to complete transactions and earn more coins. And that makes all the difference. Because Cardano does not rely on energy-intensive mining that uses thousands of powerful computers, it immediately reduces its carbon footprint. In fact, some Cardano supporters say it is now 37,500 times more energy efficient than Bitcoin.
As the ECB acknowledged when they talked about banning Bitcoin, pure proof-of-stake blockchains like Cardano are the “electric vehicles” of the crypto world. The same governments that want you to buy electric cars also want you to buy green cryptocurrencies. This argument is going to do a lot for cryptocurrencies like Cardano that can prove their green credentials.
Cardano against the public regulator
Finally, one of Cardano’s co-founders, Charles Hoskinson, is one of the most well-known voices advocating for the crypto industry in Washington, DC right now. He knows exactly how the regulatory game plays out, which could prove crucial if the climate emergency narrative escalates and the Biden White House begins passing a series of executive orders. This summer, the media praised Hoskinson after his testimony before Congress, where he eloquently argued for a more streamlined approach to crypto regulation. This is the type of person you want to defend against over-regulation.
Cardano and the future of green crypto
Overall, Cardano is one of the best bets if you want to weatherproof your crypto portfolio. Its blockchain is pure proof of stake and very energy efficient, and therefore very green. Other smaller cryptos may play their credentials green, but Cardano is one of the largest tier-1 blockchains, with a combined market capitalization of over $16 billion, making it an important part of the future of green crypto.