Researchers at an Australian university have questioned Bitcoin (BTC)’s reputation as the best store of value, saying that Ether (ETH) is on track to “become the world’s first deflationary currency”.
An article published on November 18 by four Australian researchers discusses how the Ethereum Improvement Proposal (EIP) 1559 Update makes ETH a better repository of assets. The study was co-authored by Esther Feles-Vinyas of the University of Technology Sydney, Sean Foley of Macquarie University, Jonathan Carlsen of the University of Western Australia, and Jerry Sfk of the University of Sydney.
As a result of the August EIP-1559 update, the network burned some transaction fees, with over 1 million ETH burning out of the 118,583,580 circulating resources.
Sometimes, the report says, transaction fees in excess of 50% of the 12,000 newly printed ETH are burned daily thanks to EIP-1559. The researchers believe that as the demand for Ether grows due to its robust ecosystem of decentralized financial applications, more ETH will be burned.
The researchers wrote that Ether is already less inflated than Bitcoin.
“On a year-over-year basis, the Ethereum creation rate since EIP-1559, the expected increase in the total Ethereum supply is only 0.98%, which is less than half of the 1.99% increase in Bitcoin supply that will almost certainly occur over the same period.”
The researchers concluded that ether provides “better inflation protection than bitcoin, and thus may provide better long-term storage of value than bitcoin.”
There is growing interest in the hard ownership of Bitcoin at 21 million coins and its suitability as an inflation hedge due to the widespread printing of money during the pandemic, and inflation in the US rose to 6.2% in October. However, research suggests that investors may also want to consider using ether for this purpose.
Ethereum proponents have begun calling Ethereum “ultrasonic money” in response to what Bitcoin customers call “hard money” or “safe money.”
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However, Bitcoin proponents like MicroStrategy CEO Michael Saylor prefer Bitcoin because they consider it more secure in terms of hashing speed and more reliable due to its unchanging offerings and rarely changing protocols. Ether is constantly evolving and subject to changes in version. Sailor explained why Bitcoin is the top choice on Wednesday’s Tucker Carlson Show, saying, “Bitcoin is the highest form of real estate ever invented by mankind.”
MicroStrategy bought another $414 million in Bitcoin on Monday.