Why do investors claim that Ethereum will be more valuable than Bitcoin?

Ethereum and Bitcoin

Researchers agree that Ethereum could be much more attractive to hold value than Bitcoin. Those were the conclusions of a study conducted by the University of Sydney and Macquarie University.

The second-largest market capitalization digital currency, it could have the potential to replace Bitcoin as the main digital store of value. That was the conclusion of a study conducted by researchers at the University of Sydney and Macquarie University.

Facing the arrival of Ethereum 2.0, the updates that are taking place in the main network and the deflationary nature with which it currently operates, are two of the keys to talking about its future growth. While Bitcoin is historically considered the best reserve asset for these purposes, the research indicates that the properties that make up the Ethereum network could better fit this principle.

In the Abstract of the research, the authors propose: “Recent innovations in Blockchain network ethereum have shown that it is possible that the cryptocurrencies deflationary become, specifically through the destruction of transaction fees With up to half. network blocks that destroy more Ethereum than is created, the notion that Bitcoin offers the best inflationary hedge among cryptocurrencies is increasingly under threat.”

In that sense, here the study refers to the implementation of EIP-1559 a few months ago, which introduced a commission-burning system precisely to limit the amount of ETH that goes to the market, although this at the time was lent to strong debates because it deteriorated the conditions of the mining community.

According to data published by the Watchtheburn.com website, since EIP-1559 became effective a total of 1,090,879 ETH has been burned and that on the other hand a global total equivalent to 1,599,199 ETH has been produced. By doing a basic subtraction, results in a positive balance equivalent to 508,320 ETH (Circulating Ether) which corresponds to 30% of the ETH originally generated.

“The most important thing to note about this is that the burning of ETH has already exceeded on several occasions the amount of Ether that is generated, thus yielding negative balances that gradually limit the global total of Ethereum in circulation. that there are fewer and fewer units, technically should increase the value of the digital currency amid the growing demand in the market,” says the study.

Among the most important operational changes is the migration from Proof of Work (PoW) to Proof of Stake (PoS). This implies that the network will require less consumption of electrical energy and the participants will be able to help in the processing of the blocks through a system of guarantee funds (Staking) and thus derive passive profits.

This will generate greater scalability for the network, which implies a greater volume of operations in short periods of time, as well as a significant reduction in commissions for operations natively.

On the other hand, second layer solutions (Layer 2) and Rollups, which would help to further streamline the flow of operations in the main network. In addition to this, recently the main developer and co-founder of Ethereum, Vitalik Buterin, presented a new proposal to solve the problems associated with high costs for operations, better known as the EIP-4488, which would also implement an increase in the size of the network blocks.