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With the demise of Ethereum’s energy-intensive proof-of-work (PoW) system, Ether (ETH) is expected to “flow into the institutional world,” according to many fund managers and co-founders.
According to the Ethereum Foundation, on September 15, Ethereum officially transitioned to a Proof of Stake (PoS) consensus mechanism.
This upgrade removes the need for the Ethereum network to rely on miners and energy-intensive mining hardware to validate transactions and build new blocks. These features have been replaced by validators that stake ETH.
“This merger will reduce global electricity consumption by 0.2%” – @drakefjustin
vitalik.eth (@VitalikButerin) September 15, 2022
In a statement to Cointelegraph, Charlie Caraboga, CEO and co-founder of Australian fintech firm Brock Earner, said the network’s move to PoS would “make the future of money more internet-based. I will do it, he said.
He said Ethereum will become the payment layer that everyone embraces and trusts, especially when the spotlight on the sustainability issue of cryptocurrency mining shines brighter than ever. .
Markus Thielen, chief investment officer at digital asset management firm IDEG, has discussed helping sovereign wealth funds and central banks build digital asset portfolios, but said direct investment is often “due to energy concerns”. said to have been rejected.
But now that the Ethereum network has moved to PoS, the issue is less of a concern, he said.
Despite strong demand, the underlying zero-emission financial infrastructure is the missing link. Ethereums move to PoS clearly addresses this last concern.
Apollo Capitals Henrik Anderson told Cointelegraph that ESG has become a big factor behind institutional investors decision-making over the last few years.
Anderson believes that reducing Ethereum’s energy consumption by 99.95% will dramatically improve ETH’s ESG scores, making it “more attractive to institutional investors” in the long run. said.
Blockworks co-founder Jason Yanowitz wrote to his 92,900 followers on Sept. 15 that green ETH is a step in the history of cryptocurrencies, as crypto mining and PoW have long plagued the industry. said it would be “the best story”.
Related: How blockchain technology is being used to save the environment
Yanowitz says that the “bitcoin is bad for the environment” narrative so far has been “extremely influential” and spread like wildfire, “probably having the most negative impact on asset performance”. .
Most large financial institutions now have ESG mandates, says Yanowitz.
Fidelity, BlackRock, Goldman, etc Like it or not, you need to consider the environmental impact of your portfolio.
But that is now old news for Ethereum, and Yanowitz said the most important takeaway from the merge is that Ethereum will be greener, making it very attractive to large companies that adhere to their ESG mandates. is added.
This is the best narrative crypto and ETH has never been seen before. It flows into the institutional world and investors buy ETH because it meets their ESG mandates.
