rypto investors across the world are holding their breath as one of the biggest digital currencies, Ethereum, begins its weeks-long transition to a proof-of-stake coin.
The transformation of the $200 billion-market-cap cryptocurrency promises to deliver huge energy efficiencies, making Ethereum much more cost-effective to use compared to the market’s most popular coin, Bitcoin. But the scale and complexity of the project means one wrong move could prove disastrous for the future of the coin and spark shockwaves across the wider crypto market.
Dr Anna Becker, CEO of algorithmic crypto investing platform EndoTech, told the Standard: “If it happens and everything goes smoothly, we move into a new era and it’s extremely exciting for the whole industry. But as with many other projects it can happen that we will hit some stumbling blocks and it will not go as smooth as we hope.
“Ethereum is the infrastructure for many companies to manage their blockchains, so if something goes wrong we have the halt of the industry… it will be quite troublesome for the industry to survive this period.”
The price of Ethereum has risen 5% over the past five days, as investors pinned their hopes on the ability of the coin’s efficiency gains to make it a more widely-accepted means of payment.
Last year, Tesla boss Elon Musk said the carmaker would stop accepting Bitcoin as a means of payment for its vehicles, citing concerns over the amount of fossil-fuel generated electricity used to mine the coin.
Bitcoin mining has consumed over 380 terawatt-hours of electricity over the past year according to estimates from Cambridge University, representing more electricity than that consumed in the UK over the same period.
“Ethereum is the new hope of the market, so we expect that it becomes a leading index and a leading coin with the market,” Becker said.
“Cryptocurrency can become the currency that is used for everyday use and then it will become extremely widespread.”