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The researchers conclude that Ether provides “better inflationary hedging properties than Bitcoin, and Ether may therefore offer a superior long-term value storage than Bitcoin.”
While there are no current threats to the tag of Bitcoin (BTC) as digital gold, there is however a growing threat to its status as a store of value when compared with Ethereum (ETH). A group of four Australian academic researchers has discovered that a simple tweak to a blockchain code can turn a cryptocurrency into a deflationary one, thus increasing its chances of serving as a good asset store.
The researchers including Ester Félez-Viñas from the University of Technology Sydney, Sean Foley from Macquarie University, Jonathan Karlsen from the University of Western Australia, and Jiri Svec from the University of Sydney said the recent upgrade in the Ethereum blockchain – EIP 1559 – is potentially pushing it way ahead of the Bitcoin blockchain in the race as a store of value.
Through the upgrade, a portion of the Ethereum transaction fees is now being burned, sometimes at a faster rate than is being created. Despite Bitcoin coming off with a capped supply, the deflationary nature of Ethereum is a deal-breaker in potential growth prowess over time.
“Annualizing the rate of Ethereum creation since EIP-1559, the expected increase in the total Ethereum supply is only 0.98%, being less than half the 1.99% increase in Bitcoin supply which is almost certain in the same period.”
The researchers conclude that Ether provides “better inflationary hedging properties than Bitcoin, and Ether may therefore offer a superior long-term value storage than Bitcoin.”
According to data from Etherchain, Ethereum has witnessed a total of 1097440.6 ETH coins burnt since the EIP 1559 upgrade went live back in August. This value is currently worth over $5 billion and represents a part of the 118,583,580 circulating supply. Further depletion of the digital currency through this model is billed to have a lasting and great impact on the price of the digital asset over time.
BTC and Ethereum Price Outlook
The prices of both digital currencies were in the positive zone over the past week, thanks to a new price resurgence that was ushered in a day ago. Bitcoin is changing hands at $56,873.76, up 0.65% in the past 24 hours. The premier digital currency is trading at a gain of 5.01% in the trailing 7-days according to data from CoinMarketCap.
Ethereum has a higher rate of gain compared to the BTC as it is currently trading at a gain of 1.17% at the time of writing to price at $$4,393.07. Over the past week, Ethereum is up 13.51% showing it has a more bullish rate of gain when compared to the bigger cryptocurrency.
The Ethereum blockchain is being tipped for more bullish growth as several factors are joining together to push the coin to higher heights. Amongst its positive outlooks includes its growing ecosystem usage and the potential migration to a more scalable Proof-of-Stake blockchain starting from next year.