The report highlights the merits of EIP-1559 as a tool for creating ETH a deflationary cryptocurrency and potentially better store of value than Bitcoin.
Australian university researchers have questioned Bitcoin’s name because the best store useful network in cryptocurrency, with Ethereum heading in the right direction “to changing into the world’s 1st deflationary currency.”
At Nov. 18 paper by four Australian researchers discusses however the EIP-1559 upgrade makes ETH a probably higher store useful. The analysis comes was coauthored by organic compound 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 some of group action fees and quite a meg ETH has been burned from the 118,583,580 current offer.
At times, the report says, group action fees amounting to more than 50% of the 12,000 fresh minted ETH per day are burned because of EIP-1559. They believe that as demand for Ethereum will increase because of its strong scheme of decentralised finance dApps, a lot of ETH are going to 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 could thus provide a superior long worth storage than Bitcoin.”
There has been growing interest in Bitcoin’s laborious cap of 21 million coins and its quality as an inflation hedge because of rampant cash printing throughout the pandemic and inflation increasing throughout to hit 6.2% in the U.S in October. but the analysis suggests investors might also would like to contemplate Ethereum for this purpose.
Ethereum proponents have begun occupation ETH “ultra sound cash” in response to Bitcoiners touting BTC as "hard money" or "sound money."
(Brian Newar, Cointelegraph, 2021)