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Odin-free. eth shared: Ethereum is now harder money than Bitcoin. The inflation rate of eth continues to fall and will even become negative in the next 6 months. Ethereum is becoming the hardest money in the world.
Community Response: Not hard money if developers can change supply.
Do you know Bitcoin Devs can change the supply too? All a matter of consensus just like with ETH. Let’s see what happens if after more halvings block reward is too little to pay miners and transaction fees will skyrocket.
That would be a fork.
Yeah, and which one will you choose the one without security or the one with security, but perpetual inflation? You’ll hope for the former but be left with the latter.
Every Bitcoin fork so far failed obviously but just wait until the block reward diminishes after the next few halvings. Miners need to get paid. So either massive transaction fees or a change in the protocol.
Can you explain this in a flat simple language for noobs? Appreciate.
Hard money shouldn’t be deflationary. The soundest money is slightly inflationary so people still have an incentive to spend it rather than holding it. I love eth, but I think people have the wrong idea thinking about it as sound money.
Wrong. Money should neither be inflationary nor deflationary, it should be a constant. Do you see what the fed does today to the markets? That’s what ETHs monetary policy is.
Fixed supply currencies are deflationary.
No, they aren’t. That’s like saying because I’m growing in height, it means measurement rulers are deflationary. Measurement rulers are constant, they don’t increase or decrease.
Growing populations and expanding economies are not served by fixed supply currencies. If my currency has increased buying power tomorrow (more goods and services bought by the same unit) I am not incentivized to spend or lend it.
Fallacious economic reasoning. Needs will always trump wants so I won’t wait for food prices to become cheap tomorrow before I consume today. Let me ask you a question, how do we as a nation or people know that we are productive?
Of course, the purchase of certain necessities cannot be delayed. But how about the financing of exploratory and innovative projects? The strongest argument for fixed supply currency is that it will have to be used eventually because the world and its resources are finite.
You don’t increase funding of those projects by inflationary pressures just as no one should force you onto a plane to skydive even though you don’t want to. You end up mis-allocating capital or killing someone just because you want them to be more adventurous.
Why would you exchange ETH (a potentially rapidly appreciating asset) for an asset that will depreciate (a car) or use it to fund a risky project that has the potential for complete failure?
Let’s say ETH is sound money. Of course, I won’t do that because very few people in the world have balances in ETH so the upside is still very large. If everyone does then ETH won’t appreciate as fast or at all, it’s then I’ll gladly do that exchange.
I very much get it. You don’t. You don’t exchange a monetary asset that’s going through its monetization phase for something that isn’t. Do you think gold went through an SoV stage or not?
ETH is inherently flawed as money. With proof of stake, a small group (or individual) could acquire 51% of the circulating supply then deny consensus to transactions they don’t like or increase circulating supply.
Not so with BTC’s proof of work & 95% consensus requirement for program updates.
In fact, with proof of stake, inevitably, a small group of powerful speakers will eventually acquire enough share to change the protocol and ledger to their benefit.
