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Ethereum Foundation Researcher: ETH will become an ultra-stable currency, while Bitcoin will ultimately be hindered by its supply limit

Ethereum Foundation Researcher: ETH will become an ultra-stable currency, while Bitcoin will ultimately be hindered by its supply limit

Bitget2025/02/10 06:09

According to Cointelegraph, Ethereum Foundation researcher Justin Drake believes that as the issuance of ETH decreases, it will "soon" become an "ultra sound" currency, while Bitcoin will be "eliminated" as it approaches its supply cap of 21 million. This statement has sparked debate between the two communities.

Drake recently posted on X stating that in order for ETH to become ultra sound again, either the issuance must decrease or the burn rate must increase. He believes both will happen. The issuance of Ethereum became deflationary after merging in 2022 but began increasing in April 2024 after the Dencun upgrade because this upgrade reduced L2 network fees and total burns. However, Drake compared ETH's issuance with Bitcoin's and found that since the Dencun upgrade, Bitcoin's supply increased by 655,000 coins while Ethereum's network added only 462,000 ETH during the same period. Calculated at current prices, former is worth about $63.5 billion while latter is worth just $1.25 billion. Drake said: “Today BTC’s supply grows by 0.83% per year which is faster than ETH by 66%.”

He also pointed out that Bitcoin blockchain’s supply cap of 21 million could lead to long-term security risks because miners' income mainly comes from block rewards (about 99% over past week with only about one percent coming from network fees). He added that due to relatively low cost of attacking network; bitcoin can easily be affected by security risks.

However analyst James Check stated critics who question sustainability of bitcoin fail to consider factors such as energy advancements mining efficiency and economic incentives he said if bitcoin reaches reserve status high costs are inevitable similar to what institutions pay for secure storage gold

He further noted over time network fees would cover operating costs subsidies have already covered capital expenditures Check also believed advances in energy particularly nuclear power waste energy utilization would reduce mining costs.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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