Ethereum can become the largest cryptocurrency by appealing to people who are most concerned about sustainability. An Ethereum trader could benefit from this if the growing demand for Ethereum due to its greener nature drives the price up.
Bitcoin is plagued with environmental concerns
Two themes have been prominent in the market in recent years, particularly among investors and younger speculators. They are cryptocurrencies and the growth of investments with ESG criteria. In recent months, however, a schism has emerged that pits bitcoin, the king of cryptocurrencies, against environmental concerns. This sparked further discussion about the environmental impacts of Ethereum and other cryptocurrencies.
This puts Ethereum and other cryptocurrencies in serious danger. It had a significant impact on Ethereum's price. Due to the immense amount of energy required for Ethereum mining, it is very polluting. This is because there is so much computing power used to crack and mine Ethereum on the network that entire countries have had to consume more energy.
Argentina is the country with the most recent case reported this year. Bitcoin has consumed more energy in recent months than any other South American country. As the digital currency grows in popularity, Ethereum also consumes more energy than bitcoin.
The University of Cambridge collected data showing that the energy consumption of the bitcoin network reached 148 Terawatts per hour on May 10. This is an all-time record for cryptocurrency and more than the 120 Terawatts consumed in Argentina. While we don't yet have all the information on using Ethereum, it is clearly on the rise.
It is clear that eco-friendly cryptocurrencies are needed. Fortunately, the future is greener than the present.
Musk offers a solution
Elon Musk has been a prominent figure in business and is a key player in the ethereum fever. On February 8, Tesla founder and business tycoon Elon Musk released a statement in support of the cryptocurrency. He announced that Tesla would accept digital currencies for payment.
The CEO of the company had invested some of his company's money in cryptocurrency a few months before the end of the final quarter of 2020. This somewhat tied the automaker's share price to the price of bitcoin. It bought $ 1,5 billion worth of bitcoins for about $ 32.000 per unit, sold 10% in mid-March for double the price, and made about $ 100 million from the deal.
It seems Musk didn't know about the impact of cryptocurrency on the environment at the time or was trying to ignore it. It was May 10, when Tesla's CEO declared that he would no longer accept cryptocurrencies as payment.
The tycoon's announcement had an immediate effect on quotation bitcoin, which fell 5% in the first five minutes. The cryptocurrency has since experienced a rapid decline, losing 31% against the US dollar in the first 5 minutes. While the impact on Ethereum is not that severe, it has raised concerns about the ecological nature of the alternative cryptocurrency.