Along with Bitcoin, Ethereum is one of the most critical blockchains ever developed. Ethereum has drawn the attention of the cryptocurrency world to its underlying technology, the blockchain. Even so, the blockchain has faced many challenges, but enthusiasts believe that Ethereum (ETH) is considered solid money.
There have been several healthy money models throughout history. The newest was the gold standard. If anything, healthy money was difficult to pin down because of the central banks’ partial reserve policies. These policies have resulted in endemic global inflation. Well-known economist and philosopher FA Hayek said in 1984 that the only solid money was an accepted currency that was free from state control.
Ethereum (ETH) is anything but dead
According to Nick Szabo’s Shelling Out: The Origins of Money, solid money must be a store of value. In addition, it must act as a medium of exchange and retain its value over time. This form of money is hard, scalable, and divisible. Easy Money’s offering can easily be expanded, making it an ineffective store of value. Gold is hard money because of its rarity. However, it is not easily divisible to miss a feature of this ideal form of cash.
Ethereum started as a revolution, the values of which rose from $ 9.50 to $ 1,500 in the ICO era. The next year, the values fell below the $ 80 mark. This monumental slide came about as a start-up that ETH used for its ICOs, sold them for Fiat or Stablecoin and tightened it through the action of the supervisory authorities against fraud projects. With ETH prices falling, startups increasingly sold themselves from ETH.
In 2018, the supply of ETH was at an all-time high and government regulations increased, and the review of the ICOs further reduced demand for the token. Soon a news article began explaining that Ethereum was dead. Nevertheless, the leading dApp blockchain has matured in the meantime.
Ethereum (ETH) is a triple point asset
It has a more regulatory-compliant ICOS that produces viable market projects than those with the great ICO mania of 2017. Ethereum will also switch to Ethereum 2.0 and work with a proof-of-stake system that is energy-efficient and scalable. This revitalized Ethereum will not only reduce energy consumption, it will also be faster, cheaper and more efficient.
The ethers (ETH) are therefore expected to increase in value as developers approach this mission. The value of ETH will serve not only as the reserve currency of a major economic network, but also as a triple point asset. Ryan Sean Adams explains this concept with the words
“When Ether is paid into a participation agreement, it acts as an investment, like USD in a T-Bill. The staked Ether generates an Ether-denominated return that secures the Ethereum economy.”
1 / Ethernomics 101
Beyond the technical, most people don’t know what Ethereum really is or why ether is valuable
One thread …
– Ryan Sean Adams – @ rsa.eth (@RyanSAdams) May 16, 2019
Second, ETH pays for gas in the Ethereum economy, and the utility in it will be attractive and attract demand, which will then drive prices up. As a result, the demand from ETH will increase sharply as the Ethereum economy matures. Third, Adams adds:
“When Ether is tied to a secured loan, or borrowed for interest, or stored in a savings account, Ether acts as money like USD – as the Ethereum economy grows in size and influence, and Ether is increasingly used as money, Ether’s monetary reward increases. “
Much of the ETH is locked into DAOs, DeFi apps, and Maker CDPs collateral. As a result, ETH inflation will decrease. The EIP-1234 upgrade in Constantinople will also lower the block reward from three to two, further lowering inflation at ETH. The offer from ETH must therefore diminish over time, limit the offer and take on the characteristics of solid money.