According to ICBC’s report, market demand has been a key driver of innovation in the digital currency sector.
Market Demand Drives Digital Currency Innovation
This includes the inception of Bitcoin, advancements in Ethereum, and exploration of central bank digital currencies (CBDCs)
ICBC emphasizes Bitcoin’s ability to retain scarcity similar to gold through its mathematical consensus mechanism. Despite challenges, such as waning monetary attributes, Bitcoin’s status as an asset is solidifying, resolving issues related to divisibility, authenticity verification, and portability.
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On the other hand, Ethereum is hailed as providing “technical power for the digital future” and is recognized as “digital oil” capable of fueling various applications across the web3 ecosystem.
More About ICBC’s Report
Ethereum’s incorporation of Turing completeness through its programming language, Solidity, and its virtual machine, EVM. This allows developers to create and manage complex smart contracts and applications, positioning it as a critical platform for and NFTs.
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However, Ethereum faces practical challenges, including security vulnerabilities, scalability issues due to high computational demands, and significant energy consumption. Ethereum developers explore solutions like Proof of Stake (POS) and sharding in Ethereum 2.0. This aims to enhance network throughput and sustainability.
Additionally, the report says that ETH Layer 2 solutions such as state channels, side chains, and rollups are being developed to improve scalability.
