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Crypto investors around the world are holding their breath as one of the largest digital currencies, Ethereum, begins its weeks-long transition to a proof-of-stake coin.
The transformation of the cryptocurrency with a market cap of $200 billion promises to offer great energy efficiencies, making Ethereum much more cost-effective to use compared to the most popular currency on the market, Bitcoin. But the scale and complexity of the project means that one wrong move could prove disastrous for the coin’s future and send shockwaves throughout the wider crypto market.
Dr Anna Becker, CEO of crypto-algorithmic investment platform EndoTech, told the Standard: “If it happens and everything goes well, we’re entering a new era and it’s extremely exciting for the whole industry. But, As with many other projects, it may happen that we encounter some obstacles and it does not turn out as well as we hope.
“Ethereum is the infrastructure for many companies to manage their blockchains, so if something goes wrong, we have the industry shutdown… it will be quite problematic 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 currency’s efficiency gains to make it a more widely accepted means of payment.
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Last year, Tesla boss Elon Musk said the carmaker would stop accepting Bitcoin as a means of payment for its vehicles, citing concerns about the amount of fossil fuel-generated electricity being used to extract the coin.
Bitcoin mining has consumed more than 380 terawatt-hours of electricity over the past year, according to Cambridge University estimates, which is more electricity than the UK consumed during the same period.
“Ethereum is the new hope of the market, so we expect it to become 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 widespread.”