Ethereum founder Vitalik Buterin: Musk won't always have this kind of influence, Bitcoin's energy consumption issue is real

Ethereum founder Vitalik discussed the recent developments in cryptocurrency this Tuesday, stating that Tesla founder Elon Musk has been driving market frenzy, but he won't have this kind of influence forever. Additionally, Vitalik also acknowledged that the energy consumption issue of Bitcoin's PoW consensus mechanism is a real concern.

The Musk Factor

According to a report by CNN, whether it's Bitcoin, Ethereum, or other cryptocurrencies as an investment category, there are still issues. For example, their prices remain volatile and can be toyed with by some billionaires. Elon Musk's recent fickle attitude towards cryptocurrencies has had a huge impact on the overall market.

On May 12, Musk tweeted that due to concerns about Bitcoin's energy consumption, Tesla would stop accepting Bitcoin as a payment method. Since then, there has been a turning point in the cryptocurrency market. According to CNBC, the total market value of cryptocurrencies evaporated by $365 billion that day.

Vitalik acknowledges that the cryptocurrency market is susceptible to such disruptive events until it has accumulated enough time to establish an "immune system." However, these issues are expected to gradually disappear over time.

"Elon Musk's first tweets about cryptocurrency were probably one or two years ago. Market frenzy was foreseeable, but I do believe the market will learn from it, and Elon will not always have this kind of influence."

On the other hand, regarding Elon Musk's strong advocacy for Dogecoin, Vitalik stated that despite being the world's richest person and the operator of Tesla and SpaceX, these things cannot change the fact that Musk simply likes Dogecoin and is just an ordinary person excited about Dogecoin. Vitalik said:

"I don't think Elon Musk has any malicious intent in this regard."

Mining Energy Consumption Issue

In fact, before Musk expressed concerns about Bitcoin's energy consumption, the issue had long been a topic of debate. Vitalik admitted in an interview that it is a reasonable concern to worry about the environmental impact of Bitcoin's proof-of-work (PoW) mechanism. Besides electricity consumption, the hardware equipment needed for mining also consumes a lot of resources:

"Resource consumption is definitely huge, and while it won't destroy the world, it will have significant negative impacts."

Vitalik added that as Bitcoin evolves and adapts to technological advancements, there will be more voices within the Bitcoin community shifting towards proof-of-stake (PoS) or hybrid consensus algorithms. Switching Ethereum to PoS will reduce Ethereum's energy consumption by 1,000 to 10,000 times.

"If Bitcoin continues to insist on its current technology, there is a significant risk of being eliminated."

Confident that Ethereum Transaction Fees Will Decrease

Since last year, the issue of high transaction fees in Ethereum has become increasingly serious, with Gas Prices remaining high at 1000 Gwei during market collapses. Vitalik admitted that Ethereum's on-chain transaction costs are indeed high now, with increasing demand, but the Ethereum blockchain can only process 20 to 50 transactions per second.

However, with the arrival of Ethereum 2.0 upgrade, Vitalik stated that he is very confident that Ethereum's transaction costs will significantly decrease in the future and allow for rapid scaling. Vitalik added that while he cannot be certain, there is a possibility that Ethereum will eventually catch up with and surpass Bitcoin's market value.