Four Australian university researchers questioned Bitcoin’s reputation as the best crypto store of value, putting Ethereum on track to become “the world’s first deflationary currency“.
Research written by them on November 18 shows how the EIP-1559 update makes ETH a potentially better store of value. The research includes co-authors Ester Félez-Viñas 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.
The EIP-1559 update of Ethereum integrated in August led to the burn of part of the transaction fees: to date, of the 118,583,580 circulating units, more than one million ETH have been burned.
According to the report, the transaction fees burned are more than 50% of the 12,000 ETH minted each day. The authors believe the decentralized finance ecosystem of dApps may push demand further, destroying more ETH as a result.
The researchers also report that Ethereum may already now be less inflationary than Bitcoin.
“By annualizing the Ethereum creation rate since the EIP-1559 integration, the expected increase in the total supply of Ethereum is only 0.98%, less than half of the 1.99% increase in supply. of Bitcoin “.
The authors conclude by stating that Ether provides “better inflation hedging properties than Bitcoin, offering longer-term store of value than the first cryptocurrency“.
The pandemic and rising inflation (6.2% in the US in October) have certainly played a decisive role in the growth of interest in Bitcoin’s 21 million hard cap and its suitability as an inflation hedge. Nonetheless, research suggests that investors may also consider Ethereum for this purpose.
For this reason, Ethereum supporters have started calling ETH “ultra sound money”, in response to Bitcoiners who tout BTC as “hard money” or “sound money”.
Related: DeFi and NFTs Push ETH Demand Towards Multi-Year High of ETH / BTC
Despite everything, Bitcoin proponents, such as MicroStrategy CEO Michael Saylor, favor Bitcoin as infinitely more secure in terms of hash-rate, as well as more reliable due to its unchanged offering and rare protocol changes. On the contrary, Ethereum has undergone a continuous evolution, also changing the emissions. During Tucker Carlson’s December 1st show, Saylor once again reiterated his full faith in BTC: “Bitcoin is the highest form of ownership the human race has ever invented”.
On November 29, in support of his words, MicroStrategy bought an additional 7,002 Bitcoins, for a value of 414.4 million dollars.