The world’s largest lender, Industrial and Commercial Bank of China (ICBC), recently published an in-depth analysis highlighting the rapid evolution and growing diversity in digital currencies, where it compared Bitcoin to gold and deemed Ethereum “digital oil.”
The report emphasizes the human capacity for imaginative belief, as noted by historian Yuval Noah Harari, as a driving force behind the exponential growth in digital currency types and applications.
VanEck head of digital assets research Matthew Sigel noted:
“Chinese SOE banks keep writing love letters to Bitcoin and Ethereum.”
The ICBC report outlines the divergent development paths of various digital currencies, each addressing unique needs within the financial ecosystem.
The love letter
According to ICBC’s report, market demand has fueled innovation in the digital currency sector, from the birth of Bitcoin (BTC) to advancements in Ethereum (ETH) and the exploration of central bank digital currencies (CBDCs).
ICBC said that Bitcoin has managed to retain a scarcity similar to gold through its mathematical consensus mechanism. The flagship crypto has resolved issues related to divisibility, authenticity verification, and portability. The report added that despite Bitcoin’s waning monetary attributes, its status as an asset is solidifying.
Meanwhile, Ethereum provides “technical power for the digital future” and is establishing itself as “digital oil” capable of powering myriad applications across the web3 ecosystem.
Ethereum, distinct from Bitcoin, incorporates Turing completeness through its proprietary programming language, Solidity, and its virtual machine, EVM.
This feature allows developers to create and manage complex smart contracts and applications, positioning Ethereum as a critical platform for DeFi and NFTs. The report also acknowledged Ethereum’s potential to extend its influence to decentralized physical infrastructure networks (DePin).
Despite the potential, Ethereum faces…
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