Before we decide on our verdict we have to understand what Litecoin is, what is it used for, what eco-friendly means, and after gathering enough information we can decide whether Litecoin is eco-friendly or not.
What is Litecoin and what is it used for?
Just like bitcoin, Litecoin is a form of digital money that can be used to transfer funds directly between individuals and businesses utilizing a technology called the blockchain. As opposed to bitcoin, Litecoin was designed to be used for cheaper transactions, which makes it more efficient for everyday use. Additionally, the mining process is shorter relative to bitcoin which in turn leads to faster and cheaper transactions.
In regards to cryptocurrency, what does eco-friendly mean?
Well, this is a bit more complex, it depends on the consensus mechanism used,
“proof of work” (PoW) or “proof of stake” (PoS). If the coin you have uses staking to achieve verification for new transactions, and add them to the blockchain, then it is eco-friendly. But if your digital coin requires mining to achieve replicated outcomes, then it is not eco-friendly regarding the environment. The mining process for cryptocurrency requires powerful processing machines that, in some cases, utilize an enormous amount of electricity. According to Cambridge Bitcoin Electricity Consumption Index, the amount of electrical energy consumed by Bitcoin could be used to boil enough water for all of the cups of tea, consumed in 30 years, in the entire UK.
So, is Litecoin eco-friendly?
After understanding what Litecoin is, what it is used for, and what eco-friendly stands for, we can further analyze the ecological impact Litecoin is having on the environment. Just like bitcoin, Litecoin is using “proof of work” (PoW) as a consensus algorithm. Therefore, the answer to our famous question is no, Litecoin is not eco-friendly. Litecoin is indeed more eco-friendly than Bitcoin, but it still negatively affects the environment by consuming a relatively large amount of electricity which is most often produced using non-renewable resources such as coal and fossil fuels which contribute to greenhouse effects, negatively affecting the environment.