Ether has a 'high chance' of eclipsing bitcoin as crypto's dominant store of value, Goldman Sachs says
Etherhas a "high chance" of supplanting bitcoinas the dominant digital store of value, Goldman Sachs said on Friday.
- The bank notes that
Ethereum2.0 is expected to increase transactions per second to 3,000, compared to just seven for bitcoin.
- "As cryptocurrency use in DeFi and NFTs becomes more widespread, ether will build its own first-mover advantage in applied
cryptotechnology," Goldman said.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
The bank said ether has a "high chance" of eclipsing bitcoin as the dominant digital store of value, given the importance of real uses in determining what the store of value is.
That view was echoed by economist Nouriel Roubini last week, who said that while assets have cash flow or utility that can be used to determine their fundamental value, bitcoin has neither.
Meanwhile, ether is the preferred medium of exchange in the NFTs and DeFi space, and it has a much higher transactions per second capacity than bitcoin, according to the note.
"As cryptocurrency use in DeFi and NFTs become more widespread, ether will build its own first-mover advantage in applied crypto technology," Goldman said.
Ethereum 2.0 is expected to increase its transactions per second capacity to 3,000, whereas bitcoin's transactions per second is just seven. Visa has the capacity to process up to 65,000 tps, but typically executes around 2,000 tps.
Besides ethereum's gaining popularity as a medium of digital exchange, the platform "has the potential to become a large market for trusted information," Goldman said, given that information can be stored securely on a decentralized ledger via ethereum. That information could then become tokenized and traded.
"This is a tiny peek at [ether's] actual practical uses," Goldman admitted, before offering its view that Ethereum could become an integral platform of safely storing medical data and being able to sell it to pharmaceutical research companies.
"Ethereum has the benefit of running on a decentralized global server base rather than a centralized one like Amazon or Microsoft, possibly providing a solution to concerns about sharing personal data," the bank explained.
But ether still has a long way to go before it eclipses bitcoin in market value, according to data from CoinMarketCap. As of Tuesday afternoon, ether has a total value of $298 billion, compared to bitcoin's total value of $707 billion.
- Meet the Indian-origin women CEOs who are leading the way for major global companies
- SuperRare NFT sells for more than $2 million — a 20,000-fold increase in value over three years
- Microsoft to skill 1 lakh Indians in cybersecurity by 2022
- Love procrastinating? It can help you earn Rs 1 lakh by applying for Chief Excuse Officer at Cultbike.fit
- Google and Microsoft hiring interns in India — Check out eligibility, job descriptions and other details