Much of bitcoin's particularly noxious environmental impact stems from the intensive proof-of-work method described above. It's antiquated, and given the vast and decentralized existing investments in bitcoin mining hardware and software, it's unlikely that bitcoin mining will move away from the proof-of-work method anytime soon.
As such, the best way to make bitcoin more environmentally friendly is to power bitcoin mining with more renewable energy. In this respect, bitcoin's decarbonization going forward will mirror the global transition away from fossil fuels.
But other cryptocurrencies, especially newer ones, might ditch proof-of-work. Ethereum, the cryptocurrency with the second-biggest market, is transitioning toward a proof-of-stake validation method, which differs from the proof-of-work method in that it doesn't require computational power to solve any puzzles to verify transactions. Instead, proof-of-stake validation is granted based on the amount of cryptocurrency a validator has agreed to "stake" or not sell.
Practically speaking, proof-of-stake is like a digital lottery. To be considered to win coins, validators must stake Ethereum coins in blocks of 32 Ethereum, with each block worth nearly $100,000 at current prices. These coins are locked up in a smart contract, a bit of computer code that runs on the blockchain. The more coins a miner stakes, the more likely they are to be randomly selected by the system as the rightful validator.
Just as the proof-of-work system's design ensures security, the proof-of-stake system is made secure by the fact that if validators cheat or accept false transactions in the currency's network, they both lose their stake and are banned from the network. Rising prices of the underlying currency increase network security, but prices don't affect demand for the energy needed to mine coins.
Most importantly, proof-of-stake requires a lot less energy. Ethereum is on the verge of transitioning its network from proof-of-work to proof-of-stake in an event termed "The Merge," which may lower the network's energy footprint by 99% while allowing the network to scale up to 100,000 transactions per second. The Merge has been deemed imminent for many years but has suffered from delays given the complexity of building the model.