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POST-MERGE ETHEREUM HAS NOW DETACHED ITSELF FROM THE “CRYPTO MINING IS BAD FOR THE ENVIRONMENT”

POST-MERGE ETHEREUM HAS NOW DETACHED ITSELF FROM THE “CRYPTO MINING IS BAD FOR THE ENVIRONMENT”

Ether (ETH) is expected to "flow into the institutional world" after Ethereum's energy-intensive proof-of-work (PoW) system is removed, according to a number of fund managers and co-founders.


On September 15, Ethereum officially switched to a proof-of-stake (PoS) consensus mechanism, which is expected to reduce the energy consumption used by the network by 99.95%, according to the Ethereum Foundation.


The upgrade effectively ended the need for the Ethereum network to rely on miners and energy-intensive mining hardware to validate transactions and build new blocks, as these functions are now replaced by validators who "stake" their ETH.



Charlie Karaboga, CEO and co-founder of Australian fintech company Block Earner, said in a statement to Cointelegraph that the network's transition to PoS will "drive the future of money to be more Internet-based."


He said Ethereum will become "a settlement layer that everyone will accept and trust — especially as the spotlight shines brighter than ever on the issue of sustainability in cryptocurrency mining."


Markus Thielen, chief investment officer at digital asset manager IDEG, said he had been in talks with sovereign wealth funds and central banks to help build their digital asset portfolios, but direct investment was often "rejected due to energy concerns".


But now that the Ethereum network has switched to PoS, the issue is much less of a concern, he said:


“While demand was strong, the missing link was the zero-emission financial infrastructure. With Ethereum moving to PoS, it clearly addresses this last pillar of concern.”

Henrik Andersson of Apollo Capital told Cointelegraph that ESG has become a "big factor" in institutional investment decision-making over the past few years.


Andersson said he believes a 99.95% reduction in energy consumption on Ethereum would dramatically improve ETH's ESG score, "making it more attractive to institutional investors" in the long run.


Blockworks co-founder Jason Yanowitz told his 92,900 followers on September 15 that "Green ETH" will be the "best story" in cryptocurrency history, with cryptocurrency mining and PoW long plaguing the industry.



Yanowitz noted that until now the "Bitcoin is bad for the environment" story has been "so compelling," adding that it "has spread like wildfire" and "probably had the most negative impact on the asset's performance."


"Most large institutions now have ESG mandates," Yanowitz said.


"Fidelity, BlackRock, Goldman, etc... whether they like it or not, they now have to consider the environmental impact of their portfolios."

But that's old news for Ethereum now, with Yanowitz adding that the most important takeaway from the Merge is that "Ethereum is going green," making it very attractive to large corporations that have ESG mandates to adhere to:


“It will be the best narrative crypto and ETH has ever seen. It will flow into the institutional world where investors will buy ETH because it will satisfy their ESG mandate.”

Source: cointelegraph


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