Community post
Why Ethereum will always win...
Why after so many bungled ICO launches, sharp price drops, issues of scalability, DAO inspired forks, massive block chain sizes, and lack of confidence from the developers on the future of the project do people still attribute so much monetary value to a Ethereum? How does it bounce back so rapidly from falling so far? Why will it be the dominant cryptocurrency in a few years?
Ethereum was meant to function as an asset that pays for the gas on smart contract transactions, it can never be a stable long term currency because it is abundant and inflationary, and not a good store of value. But bad money drives out good. As long as ether is being treated as money to buy into ICOs, it will win in the battle against the much more stable currency of bitcoin.
Gresham's Law states that any circulating currency consisting of both "good" and "bad" money (both forms required to be accepted at equal value under legal tender law both are traded in major currencies) quickly becomes dominated by the "bad" money. Abundant and inflationary money is the same as shaving down / alloying coins to debase their actual value when both good money and bad money are traded in the same exchange currency.
https://en.wikipedia.org/wiki/Gresham's_law
Long term, as more people view ETH as a currency used to buy into ICOs that quickly recovers after even the slightest hiccup that SHOULD cause the value to drop, it will be hard to reverse this trend without some catastrophic event that brings the ETH blockchain to a halt.
One has to wonder if all of these ICOs are simply trying to gather up as much ETH as possible before the PoS switch....
Replies (5)
I have a number of reservations about ETH. They mostly focus on the increasingly-heavy blockchain storage requirements, and the fact that a "misconfigured" ICO from Status could cripple the network.
Shifting to Proof-of-Stake is a huge risk.
I don't think they have thought it through and are only focusing on what they view as potential savings in energy expenditure compared to Proof-of-Work.
I suppose time will tell, but I'm wary of the future for ETH.
Time will definitely tell, but I think with all of the hype built around it, a failure of the system would cause massive panic throughout the crypto world... Too many people have way too much money invested to let it fail now... Enter trading bots
Congratulations @cryptojeweler! You have completed some achievement on Steemit and have been rewarded with new badge(s) :
Click on any badge to view your own Board of Honnor on SteemitBoard.
For more information about SteemitBoard, click here
If you no longer want to receive notifications, reply to this comment with the word
STOPBy upvoting this notification, you can help all Steemit users. Learn how here!
Congratulations @cryptojeweler! You have received a personal award!
Click on the badge to view your Board of Honor.
Do not miss the last post from @steemitboard!
Participate in the SteemitBoard World Cup Contest!
Collect World Cup badges and win free SBD
Support the Gold Sponsors of the contest: @good-karma and @lukestokes
Congratulations @cryptojeweler! You received a personal award!
You can view your badges on your Steem Board and compare to others on the Steem Ranking
Vote for @Steemitboard as a witness to get one more award and increased upvotes!