The last time we touched on the environmental consequences of cryptocurrencies, we briefly presented two opposing points of views and queried whether Bitcoin is really an “environmental catastrophe”.
While you and I can agree that opinions will differ, the debate has really caught on in the mainstream, bringing broader scrutiny to the commitment of companies to a greener future.
One excellent example was Tesla, which invested $1.5bn in Bitcoin, a move that was finally reversed by the company’s CEO Elon Musk just days ago.
Musk acknowledged that if the car maker wants to explore cryptocurrencies, it should find greener ways to do so. It’s in this context that we ask whether digital assets would seek to become greener as a rule of thumb.
All evidence seems to support the claim, although Musk’s comments suggesting that Tesla could divest its Bitcoin holdings contributed to one of the most painful crypto market routs we have seen since the present bullish run began in late-2020/early-2021.
Ethereum moving towards greener future
It’s one thing to talk about it, but it’s different altogether to fight for a greener future. Ethereum though seems to be doing its part. A report published earlier this week, and confirmed by one of Ethereum’s staffers, argued that the foundation is exploring options to ditch its proof-of-work (PoW) concept sooner rather than later.
PoW will be replaced with a proof-of-stake (PoS) concept that should reduce the present energy usage for the network from around 5.13 gigawatts of power right now to 2.62 megawatts, an almost two-fold decrease in energy demand.
Many of the recent issues that Ethereum has experienced, including rising gas costs, is a reflection of this underpinning ambition to create a network that will resolve problems that have not been addressed so broadly and therefore gain a competitive edge.
It’s what the market needs
Perhaps the most compelling argument comes from the market itself. Eco-minded consumers will simply boycott purchasing goods, be that a Tesla car or something else, if they feel the fundamental principle of staying green is not met.
Tesla’s recent decision to part ways with Bitcoin reflects on this core idea that consumers, however negligent as individuals, can have a real impact on dictating corporate policies as a group. If corporations start using cryptocurrencies in a way that helps the environment, consumers are likely to respond much more appreciatively.
Not only that, but Ethereum is making the case that cryptocurrencies have a real opportunity and can transition to greener solutions if they try hard enough. However, not everyone will want to go down the same winding road that the Ethereum Foundation has been down.
In the company’s own words, it has taken years to get through to a PoS concept, but Ethereum was dealing with many challenges at the same time. Now, other currencies and start-ups can have a good example of what a greener blockchain solution could look like and while Bitcoin will surely dominate the market cap for many years to come, the future belongs to the most energy efficient cryptocurrencies, plain and simple.