Academic research claims ETH is a ‘superior’ store of value to Bitcoin
The benefits of EIP-1559 as a mechanism for making ETH a deflationary cryptocurrency and perhaps a greater store of value than Bitcoin are highlighted in the paper.
University experts in Australia have cast doubt on Bitcoin’s (BTC) status as the finest store of value, suggesting that Ether (ETH) is on its way to becoming “the world’s first deflationary currency.”
Four Australian researchers published a study on Nov. 18 that explains how the Ethereum Improvement Proposal (EIP) 1559 update makes ETH a potentially superior store of wealth. Ester Félez-Vias of the University of Technology Sydney, Sean Foley of Macquarie University, Jonathan Karlsen of the University of Western Australia, and Jiri Svec of the University of Sydney collaborated on the study.
The EIP-1559 update in August saw the network burn a percentage of transaction fees, burning almost 1 million ETH from the circulating supply of 118,583,580.
Transaction fees equivalent to more than half of the 12,000 freshly generated ETH each day are burnt at times, according to the research, owing to EIP-1559. More ETH will be burnt, according to the experts, as demand for Ether grows because of its powerful ecosystem of decentralized finance apps.
Ether is already less inflationary than Bitcoin, according to academics.
“When you annualize the pace of Ethereum creation since EIP-1559, the predicted rise in total Ethereum supply is just 0.98 percent, which is less than half of the 1.99 percent increase in Bitcoin supply that is practically guaranteed during the same period.”
Ether has “greater inflationary hedging qualities than Bitcoin, and Ether may thus offer a stronger long-term value storage than Bitcoin,” according to the experts.
Due to uncontrolled money creation during the epidemic and inflation rising throughout the country to 6.2 percent in October, there has been significant interest in Bitcoin’s hard ceiling of 21 million coins and its appropriateness as an inflation hedge. However, according to the research, investors may want to explore Ether for this reason.
Bitcoin enthusiasts, such as MicroStrategy CEO Michael Saylor, believe Bitcoin is immensely more secure in terms of hash rate and more trustworthy due to its constant supply and seldom altered protocol. Ether has gone through a lot of changes in terms of its issuance. On Tucker Carlson’s show on Wednesday, Saylor outlined why he thinks Bitcoin is the greatest alternative, adding, “Bitcoin is the highest form of property that the human race has ever developed.”