So everybody wants to know.
What's better? Bitcoin or Ethereum?
For a long time, Bitcoin was the greatest store of value known to man.
But will this change now with Ethereum 2.0?
Are you actually better off investing in Ethereum as a store of value?
Today, we're going to be looking at some tokenomics
that may point you in that direction.
Bitcoin maxis, eat your heart out.
Let's get it!
Welcome to BitBoy Crypto!
My name is Ben.
Today, we're going to be looking at Bitcoin versus Ethereum as a store of value.
Which one has superior tokenomics?
So, obviously, let's start with Bitcoin.
They're pretty cut and dry.
Bitcoin's tokenomics have helped it become the No. 1 coin
and the No. 1 store of value across the entire space.
In fact, nothing's ever really even challenged it in this way.
We know Bitcoin is digital gold because these numbers are so great.
New Bitcoin makes its way to the market through Bitcoin mining.
This is done through processing blocks and the miners earning block rewards.
Well, we know that every four years, approximately 210,000 blocks,
these rewards are cut literally in half in an event called the Bitcoin halving.
The next one will occur in about March or April of 2024.
The last one was in May of 2020.
To put that into perspective,
as of today, there's about 900 Bitcoin being mined per day.
In 2024, once the halving occurs,
that number will drop all the way down to about 450.
But in total, the max supply of Bitcoin ever is only 21 million coins.
And after all those go on the market,
well, Bitcoin network would have to be secured just through transaction fees.
But not so fast.
You know, literally not so fast
because it's going to take almost 120 years for the rest of the Bitcoin to be mined.
We all are going to be dead.
But nonetheless, in 2140, they're going to be dealing with that problem.
But let's look at Ethereum
because Ethereum now with Ethereum 2.0 is really going to challenge the tokenomics of Bitcoin.
Unlike Bitcoin though, Ethereum's never had a total capped supply.
It still doesn't.
New Ethereum regularly comes into the market after being mined.
Or it did at least until the Merge.
But now we're on to the world of proof-of-stake, and there's stakers on the network, not miners.
So stakers actually require less rewards.
So less Ether is going to get issued under proof-of-stake.
So under proof-of-stake,
the actual inflation rate is going to depend on how many coins
or how much Ethereum is staked on the network.
We've seen reports that the network should see a decrease of 95% in inflation.
However, as of right now, with the amount of Ethereum that's staked,
ethereum.org puts that number at 88%.
It's an 88% drop in inflation for Ethereum.
And these figures are shocking.
Under proof-of-work,
roughly 13,000 Ethereum was issued to miners every single day.
With proof-of-stake now,
it's only an average of 1,700 Ethereum per day.
There are several other factors that compound this reduction in inflation.
The first and most obvious one is that the stakers now securing the network are forced HODLers,
the exact opposite of what we see with miners, where we see forced sellers.
Forced sellers in the mining industry mean they've got to dump coins
in order to pay for their electricity costs and their equipment,
you know, to keep mining.
But it doesn't end there.
This is where things get even more interesting.
Last year, we saw the introduction of EIP-1559 onto the Ethereum network.
This improved the entire fee structure of Ethereum.
And as a part of that upgrade,
a portion of every transaction is burned and taken out of the supply forever.
So Etherians have actually used the term the "triple halving"
as what we just went through with the Ethereum Merge.
This refers to the reduction of Ether's issuance to forced HODLing, or holding, of stakers
and, of course, all the coins that are burned due to EIP-1559.
These numbers actually fluctuate a bit.
But what we're seeing now is are actually times on the Ethereum network
when Ethereum goes deflationary.
And these are actually the times when Ethereum's being used the most
and has the highest congestion,
days where the network is busy and gets a lot of interaction.
And you can fast forward to the next bull run and see,
when do we usually see that?
At the peak of the market.
The Ethereum network goes insane with transactions.
And during these times,
at the peak of excitement about Ethereum,
the supply is going to be going deflationary.
It's mind-blowing when you think about it.
And over time,
this is going to result in a significant decrease in the issuance of Ethereum.
You can actually track these Ethereum supply metrics on ultrasound.money.
And you can always compare what the network would look like
if we continued on with proof-of-work, or mining.
But if we had continued under proof-of-work,
we would have already seen over half a million new Ethereum enter the market.
There's little doubt in the next bull run these factors are going to cause Ethereum to moon.
Absolutely skyrocket.
Because, once again,
the increased market activity will increase the amount of ETH that's being burned
at a time when there's already a supply crunch with no forced sellers.
I don't know about you, but this is getting me more bullish on Ethereum than ever,
even as just a store of value.
In my opinion, the Ethereum tokenomics are now superior to Bitcoin's.
There's no capped supply.
There's no max supply. I get it.
But the fact is the inflation rate is going to be lower than Bitcoin's
for probably the rest of my lifetime.
I don't know about yours.
Maybe you're a young whippersnapper.
Probably, you're not going to see Bitcoin inflation ever drop lower than Ethereum's.
So drop your comments down below.
Let me know, do you think that the tokenomics of Bitcoin are superior?
Or those of Ethereum?
I'd love to hear your thoughts.
That's all I got.
Be blessed.
BitBoy out.