Australian university researchers have questioned Bitcoin’s reputation as the best store of value network in cryptocurrency, with Ethereum on track “to becoming the world’s first deflationary currency.”
A Nov. 18 paper by four Australian researchers discusses how the EIP-1559 upgrade makes ETH a potentially better store of value. The research comes was coauthored by 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.
Ethereum’s EIP-1559 upgrade in August saw the network burn a portion of transaction fees and more than one million ETH has been burned from the 118,583,580 circulating supply.
At times, the report says, transaction fees amounting to more than 50% of the 12,000 newly minted ETH per day are burned thanks to EIP-1559. They believe that as demand for Ethereum increases due to its robust ecosystem of decentralized finance dApps, more ETH will be burned.
The researchers write that Ethereum is already less inflationary than Bitcoin.
“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 Ether provides “better inflationary hedging properties than Bitcoin, and Ether may therefore offer a superior long-term value storage than Bitcoin.”
There has been growing interest in Bitcoin’s hard cap of 21 million coins and its suitability as an inflation hedge due to rampant money printing during the pandemic and inflation increasing throughout to hit 6.2% in the U.S in October. However the research suggests investors may also wish to consider Ethereum for this purpose.
Ethereum proponents have begun calling ETH “ultra sound money” in response to Bitcoiners touting BTC as “hard money” or “sound money.”
However Bitcoin supporters like MicroStrategy head Michael Saylor favor Bitcoin because they see it as infinitely more secure in terms of hash rate and more dependable given its unchanged supply and infrequently changed protocol. Ethereum has been undergoing a constant evolution and has seen change. Saylor explained why he believes Bitcoin is the best option on Tucker Carlson’s show on Dec. 1, when he said:
“Bitcoin is the highest form of property that the human race has ever invented.” MicroStrategy purchased another $414 million worth of Bitcoin on Nov. 29.Cointelegrapth • crypto news