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The Bull Case for Ethereum and How It Relates To Bitcoin (TLDR)

A few people have asked for a summary of the [Bull Case for Ethereum and How It Relates to Bitcoin](https://docs.google.com/document/d/11oCA9iPtv6s-twhW6PdSpiENKCbeW7aJJO9Jv8KEc2g/edit?usp=sharing). These are the main points:

* The Ethereum protocol is much more complex and flexible than Bitcoin‘s, however ether does compete with bitcoin as a monetary asset. Ether is Ethereum‘s native monetary asset simply because it is used as such.
* ETH will become more scarce than BTC. Ether’s net issuance rate is projected to become near 0% as soon as the third quarter of 2021, but not later than the end of 2022. This will be primarily possible due to the switch to PoS and transaction fee burning from EIP-1559.
* Ethereum‘s network “utility” is hosting its own digital economy, and it is using ether as its primary monetary asset. This means that ether’s value as money is not restricted by the supply side scarcity. It is also driven by the demand for it as collateral and a medium of exchange (DeFi and NFTs). Transaction fees are also becoming an important contributor to ETH’s demand (ETH’s daily fee revenue is about three times as much as BTC’s).
* An argument can be made that demand side impact for money as a facilitator of economic activity is perhaps even more important than its properties related to wealth preservation. This is why the global money supply (the total amount of fiat money in the world) is worth about ten times more than gold’s market capitalization (the market price of all the gold in the world).
* Ethereum‘s protocol persistence and permanence will cement it as the #1 monetary network. Ethereum Killers are actually Layer 2+ scaling solutions to Ethereum. They will be much more scalable than Ethereum, but permanence is more important than utility when it comes to monetary networks. Other networks will do well, but they must be valued primarily as a stock for a cloud service company as opposed to a monetary asset.
* Macro factors are lined up for a massive appeal in favor of cryptocurrencies. This will continue to drive the institutional and retail demand for Bitcoin and Ethereum.
* Ether is not just money. It can be valued as:
* Monetized Commodity
* Currency
* Bond
* Growth Tech Stock
* Consumable Resource

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**EDIT 1 (TLDR TLDR):** The bull case for Ethereum suggests it is not stopping at the moon… it is not stopping on Mars… it is going straight out of the Milky Way galaxy in search for alien life, but you should own some BTC just in case the spaceship malfunctions during launch.

**EDIT 2:** If you don’t like the way this sounds, then you should read the thesis and make a counter argument. The full thesis explores each of these points in great detail and debunks just about every shallow criticisms against Ethereum (except that it does have an execution risk).



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18 Comments

  1. I keep reading about all the bull cases for ethereum and why I should be bullish too but lord for a crypto that has so many amazing things lined up this is one time where the hype isn’t moving the price too much. Maybe it’s too premature since we have no guarantees that the timelines will actually unfold how they say they will. Not sure but i’d love to see eth make a move that isn’t related to bitcoin.

  2. Speaking of which, any new word on the rumored “miners’ strike” happening on April 1st?

    Whatever it may be, seems like a good time to keep an attentive eye on the price of ETH, see if it doesn’t do something interesting around the coming turn of the month.

  3. This isn’t a FUD post or case for starting an argument. My main and only concern with ETH is the fact that it was premined and distributed in an ICO with the foundation I believe keeping ~20% (may be wrong there) if I’m looking for the future of money I’m really not interested in a money that started off similarly to a security. That’s just me. That is the one and probably only thing stopping me from accepting ETH as money. It was distributed in a similar fashion as a security and some developers ran off with there bags and started other projects at the expense of the market.

    I can get past everything else but I have yet to see an argument to persuade me otherwise on that point.

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