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Bitcoin and Gold: China’s Largest Bank Stresses Equal Scarcity

by xyonent
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Bitcoin And Ethereum From Adobe Stock.jpg

Digital assets like Bitcoin have fundamentally changed the financial and technological landscape, ushering in a new era for the cryptocurrency industry. Recently, Industrial and Commercial Bank of China (ICBC), the world’s largest bank by total assets, praised the impressive growth and evolution of digital currencies, highlighting their transformative potential in the financial industry. In particular, banks have focused on BitcoinIt is likened to gold because of its limited quantity and inherent scarcity.

Bitcoin’s scarcity rivals that of gold

In a detailed macroeconomic analysis, ICBC Bank praised the importance of digital currencies in the ever-changing financial environment. Matthew Siegel, head of digital assets research at VanEck, said: share A report on the X (formerly Twitter) platform calls it a love letter to Bitcoin and Ethereum.

The analysis highlights that the types and uses of digital currencies are growing exponentially as a result of the power of human imagination. According to the report, the continued evolution of digital currencies is driven by market demand, as evidenced by the beginnings of Bitcoin, the creation of Ethereum, and the ongoing exploration of official digital currencies by various central banks.

Additionally, the bank compared Bitcoin to gold, arguing that the cryptocurrency possesses similar scarcity characteristics to gold. The comparison was made taking into account the mathematical consensus that addresses issues such as Bitcoin being difficult to divide, difficult to authenticate, and cumbersome to carry. “Its currency attributes are gradually weakening, while its asset attributes are constantly strengthening,” the report added.

Highlights from ICBC’s analysis Bitcoin supply limit 21 million coins were minted to reflect the finite nature of gold, which has historically supported its value. With only 21 million coins ever minted, BTC (also known as digital gold) has long been celebrated for its scarcity, and it is this scarcity that has particularly helped the cryptocurrency’s value and popularity soar over time.

This analogy is Bitcoin Bitcoin is quickly becoming the modern-day equivalent of gold as a digital store of value. Furthermore, the fact that one of the world’s most powerful financial institutions has recognized Bitcoin’s scarcity increases the cryptocurrency’s credibility and appeal to both institutional and retail investors.

Ethereum is digital oil

The report also delves into the uniqueness and role of Ethereum in the digital currency industry. Ethereum has been dubbed “digital oil” due to the key role it plays in enabling decentralized apps and smart contracts on its blockchain network. According to ICBC, in contrast to Bitcoin, Ethereum introduces Turing completeness with its own virtual machine (EVM) and programming language (Solidity).

Turing completeness means that ETH can execute any programming instruction, as long as the instruction is correct and there are sufficient resources. Thus, it will enable developers to create and organize a wide range of complex smart contracts and applications, providing strong platform support for blockchain technology.

ETH’s adaptability has been widely recognized in the fields of non-fungible tokens (NFTs) and decentralized finance (DeFi), and it is gradually expanding into physical infrastructure networks (DePin).

BTC is trading at $67,416 on 1D chart | Source: BTCUSDT Trading View

Featured image from Adobe Stock, chart from Tradingview.com

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