Published
5 days ago on
June 12, 2024
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The world’s largest bank, the Industrial and Commercial Bank of China (ICBC), has showered praise on Bitcoin and Ethereum, calling them “digital gold” and “digital oil,” respectively.
ICBC had high praise for Ethereum, stating that it had established itself as “digital oil” capable of powering an array of applications across the Web3 ecosystem.
Praise For Bitcoin And Ethereum
The comments were made in an in-depth analysis of the cryptocurrency ecosystem that highlighted the growing diversity and rapid evolution of cryptocurrencies. The report also stated there was an increasing demand in the market for digital assets, which in turn was fueling innovation in the sector. According to the ICBC, Bitcoin had retained a scarcity similar to that of gold, thanks to its mathematical consensus mechanism. Bitcoin has overcome several portability, divisibility, and authenticity verification issues. It also added that despite Bitcoin’s waning monetary attributes, its status as a valuable asset was solidifying.
“Bitcoin retains the scarcity similar to gold through mathematical consensus while solving its problem of being difficult to divide, difficult to identify authenticity, and inconvenient to carry. Its monetary attributes are gradually weakening, while its asset attributes are constantly strengthening.”
It is also called Ethereum “digital oil” and provides the technical power for a digital future and drives an array of applications across the larger web3 ecosystem. Ethereum incorporates Turing completeness through Solidity, its programming language, and the Ethereum Virtual Machine. This feature allows developers on the platform to create and manage highly complex smart contracts and applications, helping position Ethereum as a crucial platform for the DeFi ecosystem and NFTs. ICBC also highlighted Ethereum’s potential to influence decentralized physical infrastructure networks (DePin).
Challenges For Ethereum
Despite the praise, the ICBC acknowledged that Ethereum faced several challenges, such as scalability issues, security vulnerabilities, energy consumption, and high computational demand. Ethereum developers are working to address these issues. The transition to Proof-of-Stake and the introduction of sharding technology have helped enhance network throughput, scalability, and sustainability.
“Ethereum has been continuously upgrading its technology in terms of security, scalability, and sustainability, providing technical power for the digital future. Ethereum introduces Turing completeness with its exclusive programming language (Solidity) and virtual machine (EVM), allowing developers to write and arrange for a variety of complex smart contracts and applications, providing a strong platform support for blockchain technology. Its flexibility has been widely recognized in the fields of decentralized finance (DeFi) and non-fungible tokens (NFT) and is gradually extending to the physical infrastructure network (DePin). Looking ahead, Ethereum developers will continue to work on finding the Pareto optimum between sustainability, security, and efficiency.”
The Importance Of Stablecoins And CBDCs
The ICBC report also highlighted the role played by stablecoins and CBDCs in bridging the divide between digital currencies and the real world. According to the report, stablecoins help facilitate seamless transactions and provide holders with a reliable store of value. This property makes them a vital part of integrating digital currencies and the global financial system. The report also states that CBDCs can streamline cross-border transactions and reduce the over-dependence on intermediaries. They can also offer greater financial inclusion by allowing unbanked individuals to access financial services.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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