"Is Ethereum a currency?" Pomp refutes that only Bitcoin and gold have both currency and value storage characteristics

The crypto industry is full of slogans (or some people say meme)-for example, "long bitcoin, short banker" and "just HODL".

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A popular slogan recently is "Ethereum is money", which is often mentioned by proponents of cryptocurrencies, who believe that ETH meets the three characteristics of "currency" in textbooks (some people think there are two, four or (More), ie accounting units, store of value, medium of exchange.

Although this slogan has quickly spread as a reasonable idea in the Ethereum community, this sentiment has been met with some resistance.

Anthony Pompliano slams "Ethereum is money"

Cryptocurrency fund manager overview Anthony Pompliano, co-founder and partner of Morgan Creek Digital Assets, blasted "ETH is money" in a blog post, saying the argument The logic "is fundamentally flawed."

He went on to say that ETH's monetary policy is based on the irregular issuance of assets because it has no limited supply, making it exactly like the dollar that is constantly injected into the economy, adding that ETH is not a store of value.

"For those who believe Ethereum is a currency, the good news is that every change to the ETH supply plan so far has reduced the new issue rate, but the bad news is that there are always options to increase the new issue rate. This is similar to our current fiat monetary policy, where policymakers can increase or decrease the production of new currencies entering the system. "

why? What is the reason?

Well, as Pompliano puts it bluntly, "Ethereum is no different from fiat currencies", he said, "The problem is that fiat currencies don't have (a) no fixed supply, (b) an inflation supply schedule, and ( c) monetary policy decisions made by a small number of people. "

In fact, there is no upper limit on the circulation of dollars, and banknote printers are politicians and central bankers, and are not directly controlled by the public. As Pompliano explained further:

"[The structure of Ethereum is similar to] our current fiat monetary policy, and policymakers can increase or decrease the production of new currencies entering the system."

Suffice it to say, the industry investor went on to say that Ethereum is "more unstable in history than Bitcoin", and industry research site Delphi Digital gives the following chart.

The similarities between the nature of Ethereum and fiat currencies and their volatility led Pompliano to conclude that Ethereum is not a viable form of currency:

"[Future, decentralized finance] will only use stablecoins or Bitcoin as compatible currencies, instead of relying on Ethereum to replicate many of the deficiencies found in fiat currencies today."

According to Pompliano, only Bitcoin and gold have the characteristics of both currency and value storage. This is because their supply is limited by design. Bitcoin has only 21 million coins to be mined. To date, more than 17 million have been mined and no action can be taken to increase supply. Unlike Ethereum, gold is also fixed in supply because it is non-renewable.

Although he agrees that the DeFi movement is an important part of the cryptocurrency ecosystem, he said that the movement must create a better form of currency compatible with the ETH-based DeFi movement, such as the creation of DAI and the currency policy of Bitcoin The idea of ​​transforming into ERC-20.

Is he wrong?

Although Pompliano's tweet sharing the post on Twitter was accepted by many bitcoin supremacists, it still suffered some rebuttals.

ShapeShift CEO Erik Voorhees considers the statement "Ethereum is no different from fiat money" and explains that the value of cryptocurrencies is determined by open markets and not by national statutes that ensure fiat currencies.

Mythos Capital founder Ryan Sean Adams agrees, suggesting that DAI stablecoin and tBTC (Bitcoin's ERC-20 token) prove that ETH is some form of currency.