Is XRO bad for the environment? That’s one concern that worries people amidst the rapid adoption of digital currency.
Whereas cryptocurrencies have a long list of benefits, one thing waters them down. That’s the energy-intensive nature of their mining.
For example, the energy it takes to mine Bitcoin annually is equivalent to what the whole of Argentina uses. The same applies to Ethereum, and that’s bad news since they are the two leading digital coins.
Due to their huge energy demand, there are concerns about their environmental impact. As a matter of fact, their sustainability is questionable.
However, some alternatives are moving away from this mode of crypto acquisition. An excellent example is XRP, but how good is it for the environment?
What Is XRP?
Before discussing its environmental impact, it is vital to define XRP. That’s because it is often mistaken for Ripple despite the two terms meaning different things.
However, the two share a relationship which explains the confusion.
For instance, Ripple is a fintech firm operating an international payments system. However, it is a major entity of the ecosystem of the XRP ledger.
On the other hand, XRP is the cryptocurrency associated with the XRP Ledger. So, they are both parts of this ledger, but they play different roles.
So, Is XRP Bad for the Environment?
As much as XRP is better than its other popular counterparts, it is important to point out that it still uses energy. One transaction consumes 0.0079 kWh, which is substantial given the many transactions that occur daily, monthly, and annually.
However, that’s quite small compared to the energy consumption of a cryptocurrency such as Bitcoin of 707 kWh per transaction. In other words, a single XRP transaction consumes only 0.00112% of what its Bitcoin counterpart uses.
That’s equivalent to over 8 million transactions of XRP consuming the energy than a single Bitcoin transaction requires. Annually, XRP consumes around 474,000 kWh.
That’s worlds apart from the annual energy consumption of Bitcoin and Ethereum. The former uses over 57 billion kWh, whereas the latter uses over 2 billion kWh.
Going by these statistics, one can say that XRP is a better alternative compared to other popular cryptocurrencies. So, fair enough, XRP isn’t that bad for the environment.
Reasons XRP is Environmentally Friendly
Now that XRP isn’t bad for the environment, let’s understand why that’s the case.
It uses the Consensus Mechanism
Cryptocurrency is acquired in different ways depending on various blockchains and companies. Most popular cryptocurrencies use the Proof of Stake technique.
Unfortunately, this mechanism consumes a substantial amount of energy. However, that’s not the case for XRP, which helps it consume less energy and favor the environment.
It uses the consensus mechanism to achieve environmental friendliness. Only a few institutions and individuals will validate the XRP transactions in this case.
The chosen parties decide on the XRP Ledger’s correct version. They must agree, and that’s why it is a consensus mechanism.
Besides being energy efficient, the method also consumes less time. Consequently, an XRP Ledger transaction takes between 3 and 5 seconds to complete.
One must admit that that’s quite fast compared to other cryptocurrencies. For example, Bitcoin updates its ledger after ten minutes which is undeniably a long wait.
Equally important, XRP Ledger doesn’t promote competition for incentives. That’s yet another exercise that leads to massive energy consumption and, above all, wastage.
One can say that XRP Ledger uses negligible energy to confirm a transaction. The same applies to the computers that validate these transactions.
Since mining consumes a lot of energy, the consensus approach contributes significantly to XRP’s environmental friendliness.
Did you know that no new tokens of XRP are currently being created? Yes, and that has been the case since 2012.
That’s because the organization created all its token supply before its launch in 2012. Consequently, there is no need to mint any new XRP coin.
Under such circumstances, no computers are creating new coins. Similarly, its validators don’t compete for new coins in the name of incentives.
This arrangement contributes significantly to the environmental friendliness of this digital currency. After all, validators and new coin production consume considerable energy.
Various Uses of XRP
Despite being energy efficient, XRP isn’t any less than other cryptocurrencies. It has several uses, including the following;
- Investment; for anyone planning to invest, XRP is a long-term method of storing its value for as long as you wish to conserve the investment.
- Trading; Traders and investors can trade using various digital assets, and XRP is no exception. That’s thanks to their room for speculation and availability among the trading assets on different cryptocurrency exchanges.
- Transferring value; If one wants to transfer any value from one party to another, XRP Ledger is an ideal option. It involves transferring the asset from one wallet to another, and these transactions are fast.
Is XRP bad for the environment? As far as energy consumption is concerned, digital currency uses a considerable amount.
However, it ranks among the most environmentally friendly digital assets. That’s because the energy it consumes is equivalent to a small fraction of what other cryptocurrencies, such as Ethereum and Bitcoin, use.
Therefore, XRP is good for the environment to a great extent. It has features that promote its environmental friendliness significantly.
On one side, it uses a consensus mechanism that doesn’t require much energy to facilitate transactions. Their completion also requires less time, thus reducing power consumption per transaction, daily, monthly, annually, etc.
It has several uses and is thus a great option among traders and investors. Since one can use them to transfer value, XRP digital coins are common among typical individuals.
So, if you need a digital currency friendly to the environment, XRP should be on top of the list. Besides, it is also cost-effective and scalable.
The fast transactions also save you time which is also worth appreciating. So, whereas cryptocurrencies have a long way to go regarding energy efficiency, XPR is a step closer, which is commendable.