Bitcoin vs Ethereum » Supply cap and deflationary model?
Bitcoin advocates have argued that Ethereum’s monetary policy has changed at least 11 times in its seven-year existence, while BTC has seen no changes.
bitcoins and Ethereumthe two main ones cryptocurrencies by market capitalization, they have always opposed it. As the new year began, the first discussion emerged comparing the limited supply of 21 million BTC to the deflationary supply of ETH, with disagreements over which of the two was considered a truly hard currency.
One Twitter user compared the supply issuance of the two cryptocurrencies and suggested that “while BTC’s limited supply is solid, ETH’s dwindling supply is ultra-solid.”
The comparison between the two did not please bitcoin advocates, who were quick to point out that strength comes from the credibility of monetary policy, not ever-changing politics. Dan Held, a famous Bitcoin proponent, highlighted the flaw in the argument and noted that an ever-changing argument has less credibility. He said:
“Time builds trust with humans, it’s not just about code. By your logic, if we ran another cryptocurrency with more deflation, it would be “firmer”.
Another Bitcoin advocate questioned the credibility of Ethereum’s monetary policy, recalling that monetary policy itself has “changed at least 11 times in its seven-year existence.” In contrast, Bitcoin hasn’t changed its monetary policy once.
Predicted historic emission rate for ether
Ether it went deflationary in August 2021 with the introduction of the Ethereum Improvement Proposal-1559 (EIP-1559). The upgrade introduced a burn mechanism that automatically burns a portion of transaction fees, reducing the overall supply of ETH in circulation.
In response to Alex Gladstein’s argument that the “administrators” can arbitrarily change Ethereum’s monetary policy, independent Ethereum educator Anthony Sassano said that every change on the Ethereum network has been approved by the thousands of community members.
Leo Glisic, the founder of the Maitri network, She said that ETH had become a hard currency now, but BTC won’t peak until 2140.
Bitcoin has faced similar currency changes and source code adjustments in the past.
The most notable came in 2017, when there was a growing demand for increasing the Bitcoin block size to accommodate more transactions per block and make it more scalable.
Most of the Bitcoin community remained against any changes to Satoshi Nakamoto’s original code. As a result, the Bitcoin network underwent a hard fork in 2017, resulting in the formation of Bitcoin Cash (BC extension), a cryptocurrency with a block size of 8MB compared to 1MB for BTC.
However, today BCH has had very limited on-chain development and is currently trading at a 97% price drop from its all-time high.
By Prashant Jha, Cointelegraph
Prashant Jha is a crypto journalist focused on the US and UK markets. His interests lie in blockchain technology and the adoption of cryptocurrencies in emerging economies.
The views expressed herein are those of the author only and do not necessarily reflect the views of Forex Quebec. Every investing and trading move carries risk, you should do your research when making your decision.
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