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Is Terra Luna Environmentally Friendly (Explained)?

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This article was written before the Luna Crash.

The Terra blockchain supports a decentralized finance ecosystem that generates algorithmic stablecoins linked to real-world assets such as the U.S. dollar.

Terra Luna is an innovative crypto but how eco-friendly is it? You may wonder how you can measure the environmental impact of cryptocurrency. The truth is some coins require more energy to operate than others.

Read on to learn about the environmental impact of Terra and its token Luna.

Is Terra Luna Eco Friendly?

Terra uses a proof of stake model. That means validators verify transactions based on the number of coins they hold. This requires less energy than competing models, making it more eco-friendly.

Eco-friendly cryptocurrencies first came into vogue at the end of 2021. Elon Musk announced that due to Bitcoins detrimental environmental impact, Tesla would stop accepting payments in the cryptocurrency.

Mining cryptocurrencies takes tremendous power, and some investors now want to minimize the carbon footprint of their crypto applications.

For example, Wikimedia no longer accepts donations in cryptocurrencies that have detrimental impacts on the environment. Mozilla is reviewing its policy on crypto donations for the same reasons.

Not all cryptocurrencies have the same negative impact on the environment. In fact, many networks are trying to make more environmentally sound decisions.

So, what is a sustainable cryptocurrency? In the nutshell, a sustainable cryptocurrency has a minimal carbon footprint and transactions with low-energy consumption requirements.

Learn more about how Luna compares to Solana, another highly prominent coin in the market.

What Is The Impact Of Luna On The Environment?

Luna has a smaller impact on the environment than Bitcoin and other cryptocurrencies that use proof of work (PoW) versus proof of staking (PoS).

In proof of work models, bundled crypto transactions run through supercomputers. These computers solve complicated algorithms to convert the bundle into a block and add it to the blockchain.

This isn’t very eco-friendly because it requires more energy than staking.

PoS systems, such as Terra Luna, don’t use mining to create new coins or verify transactions. Instead, proof of stake uses voting or staking to perform this function.

As a result, PoS tokens avoid energy-intensive cryptographic calculations that burn out machines and harm the environment.

Validators stake some of their crypto to back blocks they want to add to the blockchain. Cryptocurrency holders vote to approve or deny legitimate transactions, receiving compounding cryptocurrency as a reward.

PoS networks such as Terra Luna can save you money on the constant churn of new equipment and soaring electrical costs. Ultimately, that’s also good for the environment.

What Makes Terra Luna Special?

Terra Luna is a Layer-1 blockchain with many benefits thanks to its permissionless, decentralized model. It offers a solid infrastructure for stable coin development and it’s a secure way to make programmable payments or create blockchain contracts.

Terra is an independent PoS blockchain. Investors need the LUNA token to participate in the network consensus. Luna has a max supply of 1 billion tokens and is a staking token, arguably more environmentally friendly than dependent cryptocurrencies like Chainlink.

Staking coins brings the same rewards as trading or mining them. All you have to do is buy and hold coins to gain admission to the mining pool.

Luna is currently ranked among the top cryptocurrencies near Cardano and Solana.

Is Terra Luna A Good Eco-Friendly Alternative To Bitcoin?

Yes! Terra Luna provides a less intensive way to verify transactions, leading to a smaller energy footprint than Bitcoin, which uses PoW to verify transactions. However, many detractors claim that PoS tokens such as Luna lack the highly secure nature of PoW calculations and algorithms.

Is Terra Luna More Eco-Friendly Than Chainlink?

Yes, Terra Luna is more ecofriendly than Chainlink. Chainlink is based on the Ethereum network, which isn’t known for eco-friendliness.

Ethereum uses mining, which is much more energy intensive than staking, the verification method used by Terra Luna.

Mining incentivizes users to dedicate powerful machines to mining coins.

See also Is Chainlink Environmentally Friendly?

Is Terra Luna A Web 3?

In the early 90s, Web 1 brought digital content that you could read and share. However, it didn’t have the read/write capability that came with the Web 2 innovations such as forums, social media and marketplaces that allow users to interact with much more freedom.

Web 3 has read/write/own characteristics. For example, cryptocurrency and other protocols allow users to participate in the governance and operation of digital assets.

Terra Luna and other tokens use a decentralized network that provides users with anonymity and freedom via secure blockchains.

Is Luna A Good Crypto?

LUNA ended strong in 2021 and continues to grow in popularity. Terra has added a $1bn (£747m) USDT reserve to boost confidence in the cryptocurrency and its stability.

It grew by 13,800% it 2021 and is among the top cryptocurrencies available.

Final Thoughts

More and more people are turning to Terra Luna for stability in the blockchain. Environmentally conscious investors like that Luna uses of proof of staking versus proof of work. This method of verification doesn’t require the intense computational algorithms for proof of work transactions.

Therefore, if you are concerned about the eco friendliness of your crypto, consider investing in Terra Luna for this and many other benefits.