ICBC, the world’s biggest lender, recently released an analysis that highlighted the growing variety of digital currencies. It compared Bitcoin with gold and considered Ethereum to be a valuable asset. “digital oil.”
As noted by Yuval Noah, historian, this report highlights that the ability of humans to imagine and believe is what drives the growth in the types of digital currency.
Matthew Sigel, VanEck’s head of research for digital assets:
“Chinese SOE banks keep writing love letters to Bitcoin and Ethereum.”
ICBC’s report highlights the diverse development paths for digital currencies that each address unique needs in the market. financial ecosystem.
Love letter
ICBC’s report shows that the market has been driving innovation since the advent of Bitcoin.BTCEthereum’s (ETHThe exploration of digital currency (CBDCs) by central banks.
ICBC stated that Bitcoin’s mathematical consensus has allowed it to maintain a scarcity comparable to gold. It has also resolved problems related to portability, authentication verification and divisibility. According to the report, despite Bitcoin’s declining monetary characteristics, its position as an asset has been solidifying.
Ethereum offers a number of advantages. “technical power for the digital future” It is now establishing itself “digital oil” It is capable of powering a wide range applications in the Web3 ecosystem.
Ethereum, unlike Bitcoin, implements Turing-completeness in its Solidity proprietary programming languages and EVM virtual machine.
The feature enables developers to manage and create complex smart contracts, thereby positioning Ethereum as an important platform for DeFis and NFTs. This report acknowledged Ethereum’s ability to expand its influence on decentralized physical infrastructure (DePin) networks.
Ethereum has a lot of potential but also faces a number of practical problems, like security issues, high computing demands and energy consumption.
Ethereum developers have explored various ways to overcome these issues. Ethereum 2.0 introduced the Proof of Stake Consensus Mechanism and sharding Technology. upgrade The goal is to improve network performance and sustainability. Developers are also working on Layer 2-solutions such as side chains, state channels and rollups in order to increase scalability.
Stablecoins & CBDCs
Report also highlights the role stablecoins play in closing the gap between digital currencies and real-world currency. Stablecoins are a stable alternative to volatile cryptocurrency markets. They are based on traditional assets such as fiat currency.
ICBC has stated that stablecoins allow for seamless transactions as well as a store of value. They are an indispensable tool in everyday life. financial Activities and a Bridge for Integrating Digital Currency into Global Economy financial system.
CBDCs are also a major innovation for the modern monetary systems. The central bank can enhance the effectiveness and efficiency of the monetary system by digitalizing fiat currencies.
The report states that CBDCs are able to streamline transactions across borders, reduce the reliance on middlemen, and provide greater value. financial Digital inclusion is a way to include everyone. financial Services for non-banked population.
In the report, it was noted that to achieve widespread adoption, CBDC infrastructure must be developed and implemented with careful consideration for privacy, security and regulatory issues.
According to the report, while each digital currency has a different development strategy, they are all aimed at enhancing financial Included, payment security, and efficiency. In order to balance security and efficiency while digital currencies are evolving, policymakers and developers need to keep in mind sustainability.
In this article, we mention a number of things. article
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
“ItsDailyCrypto is not responsible for any activities you perform outside ItsDailyCrypto.”
Source: cryptoslate.com