Goldman Sachs Group Inc, an American multinational financial services company, has weighed in on the controversy between Bitcoin and Ethereum, emphasizing its support for the latter. Excerpts from the bank’s leaked Global Macro Research paper, posted on Twitter by Santiago Santos, General Partner at ParaFi Capital, showed the bank tackling and analyzing the key arguments that back Ethereum to overtake Bitcoin as the primary store of value in the near future.
Ethereum Has A High Chance Of Overtaking Bitcoin
Bitcoin and cryptocurrencies have crashed over last week, with an electrifying $1.3 trillion wiped from the combined crypto market price.
According to a leaked report from Goldman Sachs, ethereum, the second most powerful cryptocurrency with a market capitalization of about $250 billion, has a good chance of overtaking bitcoin as the “dominant” store of value, dubbed the “Amazon of Information.”
Goldman Sachs noted that the tag of the Ethereum blockchain as a potential store of value draws on its growing use cases as it hosts a large number of DApps and smart contracts.
“Given the importance of real uses in determining the store of value, Ether has high chance of overtaking Bitcoin as a dominant store of value. The Ethereum ecosystem supports smart contracts and provides a way to create new applications on its platform. Most decentralized finance (DeFi) applications are being built on the Ethereum network, and most non-fungible tokens (NFTs) issued are purchased using Ether. The greater number of transactions in Ether versus Bitcoin reflects this dominance,” the report reads.
“Ether beats bitcoin as a store of value. The Ethereum ecosystem…provides developers a way to create new apps. Most of DeFi apps are being built on Ethereum. The greater number of transactions in ether vs bitcoin reflects this dominance” – Goldman Sachs Global Macro Research pic.twitter.com/vNkQ1HlDYM
— Santiago R Santos | #9159 (@santiagoroel) May 22, 2021
The Ethereum blockchain’s utility was also emphasized in terms of the ability to store digital data in exchange for tokens. This creates an increasing market for Non-Fungible Tokens (NFTs), which are rare collectibles or tradable digital objects. Ethereum is home to a variety of NFTs and transactions, which are usually made with the ETH cryptocurrency.
“Unlike bitcoin, ethereum is not just a value token, meaning it actually fuels all use cases built on top of the ETH blockchain,” Kosala Hemachandra, the chief executive of MyEtherWallet, said corroborating the Goldman Sachs position while pointing to “DeFi, NFTs, decentralized applications.”
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Outperforming Bitcoin Is Feasible
Even after the market collapse of the last week, the price of ethereum has outperformed the price of bitcoin in the last 12 months, with ethereum adding around 1,000 percent to the 300 percent price of bitcoin.
Meanwhile, some assume that long-awaited Ethereum updates, which began at the end of last year and are aimed at expanding Ethereum’s scope and lowering transaction costs, would enable the Ether price to hit new highs.
According to Kosala Hemachandra, CEO of MyEtherWallet, unlike Bitcoin, ethereum is more than just a store of value, as all use cases built on the ETH blockchain point to DeFi, NFTs, and decentralized applications.
Despite the fact that Ether remains the most widely used blockchain in the world, it has had issues in the past. It is not sustainable due to the amount of energy required to produce coins.
Ethereum, like Bitcoin, uses “proof of work” to keep the network running. Complex technology calculations necessitate the use of a vast army of machines, each of which consumes a significant amount of energy. Experts estimate that Ethereum is used in Libya at a rate of 45,000 gigawatts.
Related article | Ethereum is at a Pivotal Point; Here are the Key Levels to Watch
Featured image from Unsplash, Charts from TradingView.
