What Makes ADA “Green?
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ADA has been hailed as a solution to the problems with Bitcoin, but what does a “green” cryptocurrency even entail?

Despite Bitcoin’s exploding value, there remain very real concerns surrounding its environmental impact. The outlook has improved since China’s mining crackdown forced miners abroad to locations with renewable energy, but problems remain. 

One cryptocurrency that has been held up as a potential solution to this challenge is Cardano (ADA). The real question is: Just how green is ADA? 

Proof of Stake Removes the Need for Miners

The key to Cardano’s green credentials is Proof of Stake (PoS). This consensus mechanism can replace the main source of Bitcoin’s environmental impact: the miners. Instead of using a computer to solve complicated puzzles, users can “lock” a portion of their cryptocurrency to process transactions or smart contracts. 

Using PoS has two important outcomes. First, it provides a new way to secure the network and prevent double-spending. Second, it gives users a new way to generate income without selling their cryptocurrency, potentially improving ADA’s price stability in the long term. 

The problem with Proof of Stake lies in the fact that it is untested. There is no other major project that has fully implemented Proof of Stake to date. The handful of smaller projects that have already tried this experiment have been plagued by bugs. 

To get around this issue, the Cardano team has put a significant amount of effort into ensuring that their project is academically sound. So far, the ADA team is the only one that has taken the time to publish in-depth explanations of exactly how their Proof of Stake system will work and has submitted those explanations for peer review. 

This transparency means that the Cardano blockchain is likely to be more secure than previous attempts at a Proof of Stake platform. 

What Impact Will Cardano Have on the Crypto Market?

Cardano’s impact could be large, but likely not as seismic as some media pundits are predicting. It is possible that the coin may ride this “green hype” to take some market share from Bitcoin. If ADA can deliver on its promises, this could lead to moderate-to-strong success. The main challenge for Cardano will be that it isn’t the only player in the space. 

The much larger Ethereum project has been slowly transitioning towards Proof of Stake for the past year or so, and its much-anticipated 2.0 update will end Proof of Work for the platform. 

However, this doesn’t necessarily mean the end for Cardano. There is no guarantee that Ethereum’s roll-out will be smooth and Cardano has the advantage that it is a new project that has been built for Proof of Stake from day one. 

In any case, Cardano’s Proof of Stake experiment could be enough to encourage more projects to finally abandon Proof of Work. If so, we could see one of the main concerns surrounding cryptocurrency — its environmental impact — melt away overnight, like a good Hollywood ending.

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