5 Bitcoin alternatives that are more environmentally friendly

Environmentally friendly Bitcoin alternative cryptocurrencies
(Image credit: Shutterstock)
Editor's note

The information on this page should not be used as investment advice. Tom's Guide can not tell you whether you should invest in a particular cryptocurrency, or in the market as a whole. Crypto prices can go down as well as up and you could get back less than you put in.

Tesla CEO Elon Musk surprised a lot of people last week when he tweeted that the electric car company would no longer accept Bitcoin (BTC) as payment, due to the environmental impact of cryptocurrency mining. 

It was surprising, in part, because Musk is seen as a crypto enthusiast and the firm just began accepting BTC in February, but also because Bitcoin’s massive energy demands are well established. 

According to Digiconomist, the entire Bitcoin mining industry has a carbon footprint comparable to Singapore, due to the immense energy consumption of powerful rigs that solve the complex equations needed to produce new blocks. Some backers, such as Twitter CEO Jack Dorsey, suggest that Bitcoin mining “incentivizes renewable energy” — and Musk previously agreed.

Now, however, Musk says that Tesla is “concerned about rapidly increasing use of fossil fuels” for mining. According to his tweet, the company is looking at alternative cryptocurrencies that use much less power than Bitcoin’s network. Bitcoin’s price dropped more than 13% in the wake of the news.

The Biden administration is said to be investigating ways to regulate cryptocurrency, and one problem it wants to solve is the vast amounts of energy that cryptocurrency mining consumes.

But not every cryptocurrency uses the same kind of resource-intensive model for producing blocks and validating transactions. Plus, some are actively working to become greener — for instance Ethereum 2.0 will reportedly be 99.95% more environmentally friendly than the current version.

Here’s a look at five other popular cryptocurrencies that take a more eco-friendly approach than Bitcoin.

Nano (NANO)


(Image credit: Shutterstock)

Explicitly billed as an eco-friendly currency, Nano (NANO) has no “mining, minting, or printing” and uses a lightweight proof-of-work model, which reportedly takes just seconds to process a transaction on a typical consumer PC. 

Without the need for heavy-duty mining rigs and top-end GPUs, Nano is billed as a cleaner alternative to the likes of Bitcoin and Ethereum. The price of NANO nearly doubled in the wake of Tesla’s announcement, but like many other cryptos it has since declined and is now back to where it was at the end of April.

Chia (XCH)

Chia cryptocurrency and hard drive

(Image credit: Shutterstock)

The newly-launched Chia, created by BitTorrent inventor Bram Cohen, puts a spin on the familiar proof-of-work formula. Its “proof of space and time” model uses storage space on your computer to establish “plots” of cryptographic numbers and “farm” them as the network runs. 

It’s one of the hottest new coins to mine, given that you don’t need an expensive, high-powered GPU to participate, but watch out: farming Chia could burn through some entry-level consumer SSDs in a matter of weeks

Cardano (ADA)

Best cryptocurrency listed — Cardano

(Image credit: Shutterstock)

Created by Ethereum co-founder Charles Hoskinson, Cardano has skyrocketed in value in 2021, rising more than 10 times in price since the start of the year and reaching a new all-time high last week (May 16) of $2.44. It is currently the 6th most valuable cryptocurrency, according to CoinMarketCap, ranked by total market cap.

The blockchain network is based on peer-reviewed research and relies on a proof-of-stake consensus model, in which participants hold the ADA coin within the network and receive rewards as a result. Hoskinson claims that the entire network uses just 6 GWh of power annually, a tiny fraction of what Bitcoin consumes. Cardano is now actively courting Tesla to adopt ADA over BTC.

Polkadot (DOT)

Best cryptocurrency listed — Polkadot

(Image credit: Shutterstock)

 Like Cardano, Polkadot hails from another Ethereum co-founder (Gavin Wood), who decided to try a different approach. Polkadot has also surged in value so far this year, up more than 200% price since the start of 2021, and is one of the top 10 cryptocurrency performers by market cap. 

Polkadot is designed as a multi-chain network that can bridge the gap between different blockchains, and is based on a nominated proof-of-stake (NPoS) model that is based on holding coins within the network, rather than energy-intensive mining. 

Stellar (XLM)

Stellar cryptocurrency

(Image credit: Shutterstock)

Stellar Lumens (XLM) is another long-established cryptocurrency that has benefitted from 2021’s market-wide gains, rising nearly 300% in value since the start of the year. 

XLM’s unique consensus model for validating transactions is energy-efficient, requiring only a small number of distributed nodes to confirm each. As such, XLM doesn’t have the enormous energy demands of some blockchain networks, which might be why it’s being tapped for big projects — for example, Ukraine plans to build its national digital currency on XLM tech. 


Andrew Hayward is a writer and editor based in Chicago. His work covering tech, crypto, games, and esports has appeared in more than 100 publications around the world, including Polygon, Rolling Stone, Decrypt, and Stuff. He has covered cryptocurrency extensively since 2019, including coins, crypto games, and NFTs, and interviewed many creators and prominent figures in the space. He has also personally invested in several coins and currently holds less than 1 BTC, 2 ETH, and 700 ADA, along with smaller amounts of other coins. View all articles by Andrew here.

Andrew Hayward

Andrew Hayward is a freelance writer for Tom’s Guide who contributes laptop and other hardware reviews. He’s also the Culture Editor at crypto publication Decrypt covering the world of Web3. Andrew’s writing on games and tech has been published in more than 100 publications since 2006, including Rolling Stone, Vice, Polygon, Playboy, Stuff, and GamesRadar.