Pomp is called for comparing Ethereum with the fiat currency

In his recently published blog post, Anthony Pompliano compared the world’s second largest cryptocurrency to the fiat currency and called them “two very identical assets”. Needless to say, it didn’t go down well with the crypto community.

Famous American entrepreneur and co-founder of the venture capital company Morgan Creek Digital, Anthony Pompliano, popularly known as pomp, remains one of the most respected figures when it comes to investing in cryptocurrencies. As a die-hard Bitcoin fan, he even criticized Wall Street veteran Warren Buffett for his orthodox views on Bitcoin. This time, however, it was his turn to face the backlash.

Fiat currency and ETH are one and the same thing, pomp

Pomp said in his last blog post that Ethereum and fiat currency are almost identical. According to Pomp, the fiat currency does not operate on a fixed supply basis, is vulnerable to inflation, and its monetary framework is designed by a set group of individuals, and these aspects, Pomp continues, are also present with Ethereum.

According to Pomp, the Ethereum monetary framework is based on what is commonly referred to as the concept of minimum required emission. This implies that the Ether community does not work with a fixed amount of tokens, but motivates miners and protects the network by using a continuous minimum spending.

According to Pomp, this unique feature is very similar to the fiat currency, where the production of new money varies from time to time based on demand and supply.

After all that, Pomp comes to the conclusion that the fiat currency can find better substitutes than Ethereum and that it is wrong to call the latter a good alternative. There are currently various exciting defi projects on the market that have the potential to radically change the way people deal with financial services. They’re mostly based on bitcoin and other stable coins, just not ether, argued Pomp.

Voorhees takes on pomp with more arguments

Soon after, Pomp’s comments on Ethereum met with heavy criticism. Erik Voorhees, the founder of ShapeShift instant digital asset exchange, responded to the blog by stating that Ethereum and government-backed currencies are actually two very different concepts.

The value of the fiat currency is determined by the decree of the state. However, cryptocurrencies like Bitcoin and Ethereum, as well as speculative assets like gold, are traded in open markets. People decide their worth. So it doesn’t come close to being referred to as a Fiat, Voorhees explained.

Voorhees also pointed out that the fiat currency is a legal claim and the restriction on the delivery of tokens does not allow Ether to qualify as fiat money. Unlike Fiat, its value is not decided by the government.

Voorhees called out the acclaimed Bitcoin bull for citing false facts in his post. Per Voorhees, although Ethereum’s inflation pattern is very different from Bitcoin’s, it is not similar to that of USD. Indeed, fiat money is traded. However, it is not susceptible to market demands like the ETH, he concluded.

Selected image from Pixabay

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